The healthcare industry is one of the most essential industries in the world for preserving the population’s health and well-being. We understand the importance of the efforts made by medical professionals to deliver superior patient care and improve satisfaction levels. However, we often neglect the importance of revenue cycle management and how financial challenges leave a lasting impact on healthcare providers.
According to a 2019 survey, healthcare organizations lose an estimated $262 billion just through claim denials. Furthermore, reworking rejected claims is another resource drain that increases financial instability, particularly for smaller healthcare practices.
Although it is impossible to avoid challenges, you can lessen their impact on your revenue by taking precautions and learning to resolve them. This blog will examine the main financial challenges, how they affect the healthcare system, and advice on how to prevent them.
Financial Impacts of Challenges
Medical billing is vital for healthcare practices, helping them get paid for the services. However, it faces common financial strains that include ineffective revenue cycle management, rising operational costs, costs associated with ensuring regulatory compliance, and budgetary restrictions.
They can significantly impact the sustainability and stability of healthcare practices in the long run if the practice does not address them prudently. Hence, providers must understand these issues and implement practical solutions.
Operational Costs
Rising operational costs (such as salaries, medical supplies, and facility maintenance) are a vital financial challenge for healthcare providers.
These costs increase due to manual entry errors, which delay payment processing and require additional resources for reimbursement collection. Furthermore, manual procedures limit clinic employees’ ability to concentrate on patient care by requiring them to spend more time doing billing-related duties.
Solution:
Maintaining financial stability requires balancing these costs within spending limits. Finding and cutting out extra spending is a key component of effective cost management. You must review your expenses regularly and search for points and places to cut costs without sacrificing the standard of care. You can use cost-cutting techniques, including negotiating lower prices with suppliers, cutting waste, and utilizing available resources.
Payment Issues
One of the major financial issues that the healthcare industry is facing is managing the revenue cycle. A practice’s accounts receivable and revenue cycle management (RCM) are both impacted by late patient payments. Practices lack the funds to contribute to their revenue cycle when payers and providers exchange claims for months or when patients postpone payments for various reasons. It can be a challenge for practices to have a precise picture of their cash flow and income when payments are made at different stages of the collection process.
Solution:
Ineffective billing and collection practices might result in cash flow problems and late payments. Accurate and timely billing is crucial to address these issues. Even though collecting patient payments can be complicated, practices can use technology and tools to streamline the process and increase efficiency for everyone involved. By overcoming these challenges, a practice can improve patient satisfaction and streamline its finances, resulting in a more accurate view of accounts receivable and a more efficient RCM.
Technological Advancements
Medical technological breakthroughs provide advantages, but they often come with higher costs. It can be difficult and expensive to integrate new technologies into current systems. The price may vary depending on the infrastructure and technology offered by the medical billing company. Price increases may result from advanced reporting features, data security protocols, electronic health record (EHR) integration, and billing software.
Solution:
Yes, we understand that implementing the latest technology is costly. Using financial management software in your billing processes is a great tactic to avoid other costs. Automated accounting and billing reduce errors and denial costs by providing real-time financial insights. These technologies facilitate cash flow monitoring, spending management, and future financial forecasting.
Revenue Cycle Management
Managing the revenue cycle is another financial challenge in medical billing. Ineffective billing and collection practices result in cash flow problems and late payments. Furthermore, claim denials also significantly impact the revenue cycle. It takes more time and money to resolve these issues, submit new claims, and guarantee payment.
Solution:
You must employ certified coders and conduct internal audits to improve the revenue cycle and minimize claim errors. The best approaches include confirming eligibility, accurately registering patients, and providing financial counseling to boost collections.
Outsource Medical Billing
The best way to combat these challenges is to outsource medical billing services. A healthcare organization can not effectively operate without having an expert in charge. Billing companies can help you maintain a strong cash flow to invest in expansion projects, resist economic downturns, and prevent service interruptions. The most significant advantage practice can obtain is fewer billing errors, fewer denials, and a more stable revenue cycle. Furthermore, they offer customized billing according to your practice’s specialty.
Example:
Let’s consider cardiology billing; cardiology procedures require more attention because the process covers a wide range of techniques, diagnostic tests, and therapies. Moreover, knowledge of specialized coding using the International Classification of Diseases (ICD-10) codes, Current Procedural Terminology (CPT), and the Healthcare Common Procedure Coding System (HCPCS) is required. These intricacies affect the coding and billing procedure, resulting in claim denials or non-reimbursement.
The administrative side of running a cardiology practice is complex and time-consuming, taking away from the valuable time doctors could spend with patients. Herein lies the role of medical billing companies specializing in cardiology billing services. They maintain a strong cash flow to increase the financial stability of the practice.
Similarly, these services are tailored to the specializations of practitioners. There are particular billers and coders for each medical specialty, whether you deal with cardiology, mental health, or orthopedics.
Conclusion
We are confident that enlisting experts to manage your medical billing requirements will significantly improve every aspect of your healthcare practice. Every organization needs to rely on the expertise of a top medical billing company because they prioritize the education and training of their financial professionals, like accountants and CFOs. Moreover, they utilize financial management software to maximize your reimbursements.
