Revenue Recovery Challenges: How to Prepare & Overcome

Quality healthcare is critical to a hospital’s success, but it isn’t the only piece of the puzzle. A healthy revenue cycle drives a better patient experience, satisfied staff, and an optimal financial position for the organization. 

Hospitals must work to create a culture that emphasizes the importance of revenue cycle management in all departments. Revenue cycle managers must optimize financial outcomes and recover revenue, even when up against obstacles.

Common Revenue Recovery Challenges

Challenges exist at every stage of the patient’s journey. They're present from initial engagement and access through billing and claims until the account is settled or has moved to collections. The following encompasses some of the more common challenges providers regularly face.

Uncompensated Care 

According to the American Hospital Association (AHA), providers in the U.S. accumulated nearly $745 billion in uncompensated care between 2000 and 2022. This number includes providers of all types and sizes. AHA also specifies that community hospitals alone spent $42.6 billion on uncompensated care costs in 2020. 

Expecting payment for care without receiving it is an enormous source of revenue leakage that can spiral out of control if not properly managed. The burden of uncompensated care and revenue recovery challenges extend beyond financial implications, affecting patient experience, hospital staff satisfaction, and overall quality of care. 

Billing Errors & Claim Denials

Claims denials occur when insurance companies reject submitted claims. Reasons for denials include, but are not limited to, coding errors, authorization issues, and eligibility issues. Coding errors happen when a patient’s information is inaccurate, coding is incorrect, or services and charges are mismatched.

Denials can lead to a seemingly endless loop of submitting claims, receiving the denial, correcting the claim, and waiting for a response. This cycle drags down the revenue cycle by extending the time between billing and receiving payment. Claims denials are also on the rise. One MGMA survey found that 69% of healthcare leaders said the number of denials they received increased in 2021. 

Lack of Patient Access & Engagement

In today’s digital age, patients expect seamless online experiences everywhere, including in the healthcare industry. Patients look online to choose providers, schedule appointments, manage their care, fill out forms, verify insurance, and make payments.

A lack of digital tools can make or break how patients engage — or if they engage at all. Experian Health found that 77% of patients surveyed who did not currently have access to any online healthcare tools would switch to a provider that offered a patient portal.

Adequate patient engagement is in the best interest of the revenue cycle. Financial services teams don’t have to look for payment if it’s received quickly online. Digital tools also reduce human error, improve registration accuracy, and streamline processes.

Mismanagement of Self-Pay Patients

Self-pay patients, or patients who do not provide a source of insurance coverage, present challenges unlike any other category. Payment via insurance coverage is not guaranteed, and providers must take extra steps to settle the account. 

Settling usually involves multiple steps within a workflow where patients can easily slip through the cracks, human errors abound, eligibility claims can be denied, and revenue is lost. The process is precarious in comparison to insured accounts. 

Regulatory Changes and Compliance Issues

If you work in the healthcare space, you know new regulations are constantly coming down the pike at the federal, state, and even local levels. For example, the No Surprise Billing Act worked to limit unexpected medical bills, mainly from emergency services, and stipulated good-faith estimates for uninsured patients or patients not using insurance. It required swift action from billing departments to comply when it went into effect in 2022. 

Falling behind on regulations can fuel claims denials, payment delays, administrative backlog, and staff turnover. Compliance requires vigilance. It can help to put a staffer in charge of monitoring new legislation and implementing systems for quick organizational change to keep up. However, some hospitals lack the resources to lend to this cause, making it a big challenge, especially for smaller providers.

Inefficient Management of Revenue Cycle

Revenue cycle management is one of the best ways to optimize hospital finances. If a hospital’s revenue cycle is disorganized, it may have poorly kept patient records, high occurrences of human error, and sky-high denials. These hospitals often delay patient billing, claims submissions, and payment posting. These delays only serve to extend the revenue cycle. 

Outdated or manual processes contribute to the chaos until it seems overwhelming to dig the hospital’s way out of this damaging management cycle. However, it’s possible to turn around performance and take advantage of revenue recovery opportunities. Facilities can do so by making small changes that add up.

How to Prepare & Overcome for Revenue Recovery Challenges

Every challenge mentioned above can significantly impact an organization’s bottom line and hinder hospitals from providing quality care. While there are many challenges, there are also several robust strategies that work well in overcoming them. 

Patient-Centered Approach to Healthcare

Around half of patients surveyed say their choice of providers is influenced by whether or not that provider gives clear information regarding healthcare costs and services. All processes, from start to finish, should be easy for patients to navigate and understand. Satisfied, loyal patients are more likely to return, recommend services to friends and family, and pay bills on time to support revenue recovery in 2024. 

Hospitals can start small before the patient walks through the doors by optimizing their online presence, starting with a website. Ensure your site looks nice and prioritizes user experience. Include easy navigation to helpful links and resources. Once your website is running, consider implementing software to support a patient-first culture, like a patient portal or screening and enrollment platform. 

Improved Revenue Recovery Process

A mismanaged revenue cycle leads to problems throughout the entire patient journey. Genuine improvements can only happen when everyone is on board — from the care team to the front desk and billing staff. Hospitals must foster a culture of commitment to revenue recovery goals.

Success requires a multifaceted approach. Revenue cycle managers can dissect patterns, identify root causes, and take corrective action. Rather than fix every problem, it’s usually best to identify one issue at a time. This may entail:

• Focus on coding and billing accuracy
• Improve the patient intake process
• Quickly address claims denials
• Upgrade patient outreach and engagement

However, insurance discovery is one of the fastest and easiest ways to improve revenue recovery. It provides an automated, exhaustive check of government and commercial payors in search of patient account coverage. It’s a simple action that can weed out many accounts that otherwise may wind up in collections. Insurance discovery can even be performed on insured patient accounts to search for secondary and tertiary forms of coverage. It’s an easy first step to take control of your revenue cycle.

Enhance the Payment Collection Process

There are many ways to improve collections, so start with one or more tips from this list that make the most sense for your organization:

• Maintain open and transparent communication, providing information and resources on insurance options, pricing information, and hospital policies. 
• Let patients know their financial responsibilities as soon as possible.
• Send clear and concise billing statements. 
• Ask for payment before service or at the point of service. A little over half of healthcare facilities do not have point-of-service collections. However, patients who leave without paying require more time and resources to collect and settle accounts later. 
• Provide the option to submit patient data and insurance information before appointments. 
• Offer flexible payment options, including online (Apple Pay, eChecks, credit card portals), via phone, in person, or via mail. (Make sure to put a system in place for mail-in checks so they are processed quickly and don’t sit in envelopes for weeks!)
• Be flexible with payment plans for larger balances. Every patient’s situation is different, and everyone appreciates a little empathy. Be willing to make adjustments. 
• Ensure a staff member is always available via phone, email, online chat, or an in-person office to help patients navigate complex processes and submit payments.

Up-to-Date Training for Your Staff

One employee’s mistake can break down the whole process and extend the revenue cycle. Providing adequate training across departments can reduce inconsistencies and uneven patient experiences. Better-trained staff also tend to stick around longer, reducing turnover and saving time and money.

Train staff on internal systems and policies while keeping them updated on new regulations, trends, and coding guidelines to support a culture of proactivity. Offer scripting, coaching, observation, and roleplaying, especially for staff communicating with patients. 

Leveraging Technology and Automation

It's time to replace legacy software that’s outdated and unreliable. Upgraded software can:

• Replace manual processes and reduce human errors that lead to billing errors. Some software even reviews for inaccurate coding before submission.
• Generate reports so you know if you’re genuinely improving with data-driven insights.
• Provide an electronic patient portal for direct messaging with patients where they can respond, schedule, pay, and take an active role in their own care. 
• Implement workflows to help staff manage patient accounts by automating administrative tasks. 
• Integrate multiple systems to share patient data with the appropriate parties.

It’s essential to get all staff onto one system to avoid shuffling patient data back and forth. Start by explaining the reason for the change, why it’s needed, and how it will improve work for each department. By showing staff what’s in it for them, the switch from outdated software starts with a higher likelihood of cooperation.

How Office Ally Can Help with Revenue Recovery Through Insurance Discovery 

Insurance discovery may be the easiest to implement out of every solution mentioned here today. With one exhaustive check, insurance discovery can easily take an account from past due to settled, consequently improving patient experience and shortening the revenue cycle.

To prove this tool's usefulness, Office Ally offers a free trial of our insurance discovery solution. Setup does not require a heavy lift from IT, and charges are only incurred if the solution recovers revenue for your team.

If your existing processes or vendors are underperforming, you have nothing to lose. Click here to learn more about your free assessment.