< + > The Challenges and Opportunities of Evolving Revenue Cycle Management Practices to Align with New Payment Models

The world of healthcare is constantly shifting and evolving in order to best serve our staff and our patients. However, in this constant shift and change, it is important that we stay vigilant to not only how this could help but also how this could hinder our efforts and our organization. One such area that is currently undergoing some evolution is Revenue Cycle Management. This shift to be more aligned with the new payment models is a great step in our work to build up value-based care, but what challenges and opportunities do we need to keep an eye on?

To help answer this question, we reached out to our insightful Healthcare IT Today Community. We asked them – in the context of value-based care, how are revenue cycle management practices evolving to align with new payment models and what challenges and opportunities does this shift present for healthcare organizations? The following are their answers.

Andy Adams, Managing Director, Performance Improvement and Advisory Services at Nordic Consulting
The transition to value-based care (VBC) requires a fundamental shift in RCM practices to align with new payment models that prioritize patient outcomes and quality over volume. Unlike traditional fee-for-service models, VBC models reward providers for the quality and efficiency of care delivered. This shift necessitates a more integrated approach to RCM, combining data from clinical, operational, and financial domains for a holistic view of performance.

One significant challenge is the need for advanced data analytics capabilities to measure and report on patient outcomes and the cost of care accurately. Organizations must invest in technologies that can aggregate and analyze data across the care continuum. Developing new workflows and processes to support care coordination and population health management is also essential.

John Squeo, Senior Vice President & Market Head, Healthcare Providers at CitiusTech
Value-Based Care (VBC) is a misnomer. A VBC reimbursement model is paying for the proof of conformity to clinical guidelines using various measures. Some bonuses accumulate for improving health outcomes that are computed at an aggregate level for a specific population and not for an individual patient.

Proving quality conformance via measures and documentation is complex and cumbersome, and spotting key trends while managing the claims value chain is critical to mitigating issues proactively that, if undetected or detected late, can cause significant negative financial impact. The integration of data analytics and business intelligence (BI) tools is transforming revenue cycle management (RCM) from reactive to proactive. Here’s how:

1. Unmasking Hidden Trends: Data analytics can analyze vast amounts of RCM data to identify trends and patterns invisible to the naked eye. This allows Healthcare organizations to anticipate potential issues before they arise. For example, analytics can reveal a rise in specific claim denials for a particular Provider or Payer. This insight allows for targeted interventions, like coding education for the Provider or negotiations with the Payer.
2. Predictive Power for Informed Decisions: BI tools can leverage historical data to predict future performance. This enables proactive resource allocation and staffing adjustments based on anticipated claim volumes or reimbursement trends. Predictive analytics can also forecast potential denials based on claim characteristics, allowing for pre-emptive review and correction and minimizing reimbursement delays.
3. Real-Time Performance Monitoring: BI dashboards provide real-time insights into key performance indicators (KPIs) like claim submission rates, denial rates, and collection times. This allows for immediate course correction if metrics fall outside desired ranges. For instance, a spike in claim rejections could indicate a systemic coding error that needs urgent attention.

Ritesh Ramesh, CEO at MDaudit
RCM practices need to be more strategic vs. transactional in the context of value-based care. Since most of the reimbursement models in value-based care are most holistic when it comes to outcomes related to patient health and experience, RCM practices should embed more cross-functional talent from other teams like clinicians, coders, and compliance to understand how claims are coded, billed, and submitted. Instead of just focusing on a claim or a set of claims and ensuring timely payment, they need to understand the root causes of critical RCM issues strategically with a data-driven approach so that they can architect sustainable solutions.

Thomas Thatapudi, CIO at AGS Health
Both payers and providers have a strong incentive to reduce the cost of care, and revenue cycle management (RCM) plays a crucial role in demonstrating the value of value-based care. For example, hierarchical Condition Category (HCC) coding supports the transition to value-based care by helping provide a complete picture of the health status of a patient to enable physicians and health plans to better predict the resources required to manage and treat the patient.

There are various ways to measure value-based care, such as the number of patient days admitted, occurrences of secondary infections, and readmissions. However, it is essential to determine if these measures have actually resulted in a decrease in the cost of care while maintaining or improving the quality of patient care. RCM is the critical piece to actually solve the puzzle of determining the effectiveness of a value-based care arrangement between the two parties. By connecting back to the decision-making tools and analyzing metrics such as readmissions and cost of care, it becomes possible to assess if the targets have been met and confirm that the right amount of money has been collected.

It is important for both the payer and provider to connect patient care with financial metrics in order to validate the concept of value-based care. Without this connection, it’s impossible to judge the effectiveness of value-based care. The answer to the question of whether value-based care makes sense will come from RCM because RCM provides insights into the cost of collection, patient collections, and the overall cost of care. RCM practices are key in the context of value-based care, and it is important they are given the required importance they deserve.

John Garcia, Chief Product Officer at Janus Health
While not my primary area of expertise, it’s clear that the shift to value-based care emphasizes quality over quantity. This transition is likely to spur the development of solutions that enhance care coordination and risk monitoring. Over the next few years, we can expect more tools and technologies designed to support these needs – overall it is an exciting time given the intersection of revenue cycle management and innovative technology solutions. Health systems that develop strong AI and automation plans will benefit in the long run as solutions advance in their capabilities and workforces adapt to their usage.

So many good insights here! Huge thank you to Andy Adams, Managing Director, Performance Improvement and Advisory Services at Nordic Consulting, John Squeo, Senior Vice President & Market Head, Healthcare Providers at CitiusTech, Ritesh Ramesh, CEO at MDaudit, Thomas Thatapudi, CIO at AGS Health, and John Garcia, Chief Product Officer at Janus Health for taking the time out of your day to submit a quote for us! And thank you to all of you for taking the time out of your day to read this article! We could not do this without all of your support.

In the context of value-based care, how do you think revenue cycle management practices are evolving to align with new payment models? What challenges and opportunities do you think this shift presents for healthcare organizations? Let us know either in the comments down below or over on social media. We’d love to hear from all of you!