Addressing the Staffing Shortage: Technology to Overcome the Greatest Hindrance to Effective RCM

Revenue cycle management (RCM) has never been more important to the success of healthcare providers across the care spectrum, but the industry faces myriad challenges. A continuing labor shortage and lack of skilled workers threaten revenues at a time when hospital operating margins hover near zero.

While highly skilled professionals are still needed, RCM teams can work smarter and not harder by using technology to automate manual processes and deploy advanced analytics to identify the cause of denials. Further, as private insurers follow Medicare’s lead by increasing third-party audits, providers need to understand their claims and auditing process at a foundational level to support their billing practices and maximize legitimate revenue.

RCM Teams Face Significant Headwinds

After operating in the red for the previous 12 months, U.S. hospitals broke even in April, according to research from Kaufman Hall. However, the financial impacts have yet to be seen from the end of public health emergency’s Medicaid continuous coverage requirement. Supply and labor costs also continue to increase, with the latter rising by 22% between 2021 and 2022.

The financial impact of staffing shortages can be significant. In addition to potential lost revenue while new RCM employees get up to speed, other direct costs include recruitment, onboarding, training, overtime pay, retention strategies, and temporary employees that may be needed to prevent backlogs.  

Cost and margin pressures are causing the C-suite to carefully examine RCM strategies. Recent interviews with 40 healthcare executives showed that 63% of providers faced RCM staff shortages, and most execs were focused on hiring to staunch workforce losses.

A survey of CFOs and revenue cycle vice presidents from large health systems and physician groups revealed that 48 percent categorized their labor shortages as severe, with an additional 34 percent reporting moderate shortages. At least four in 10 organizations reported their RCM/billing departments had vacancy rates between 51-75 percent. To cope with fundamental losses of talent, 56 percent said they are adopting automation technologies in the revenue cycle and billing departments.

Medicare Integrity Program activities, including medical review, return $8 in ROI for every $1 spent on audit activities, and such activities are picking up. For fiscal year 2023, federal authorities have budgeted $2.5 billion in mandatory and discretionary investments in the Healthcare Fraud and Abuse Control and Medicare Integrity Programs. Advancements in predictive modeling and artificial intelligence allow the Centers for Medicare & Medicaid Services (CMS) to enhance audit efforts. The agency is also exploring machine learning to accelerate chart reviews for improved payment accuracy on the front end.

Federal and private payer audits are expected to pick up following the end of the public health emergency, placing additional burdens on RCM teams. A survey conducted before the pandemic found that 24 percent of hospitals respond to 500 to 2,000+ external audit-related requests each month.

Automating Workflows Increase Efficiencies

Continuing staffing challenges, razor-thin margins, delayed reimbursements, and the specter of additional external audits place extreme pressures on RCM teams. Leaders face calls to trim costs and streamline operations, which can lead to layoffs or not filling vacant positions. Those pressures extend to the RCM team, resulting in errors, burnout, and turnover.

In a 2022 survey, 76 percent of healthcare workers, including RCM teams, said they are experiencing burnout due to a combination of heavy workloads, inefficient manual processes, long hours, work/life balance challenges, and insufficient compensation for the expected workload.

RCM teams are highly trained, but they need the right processes and technologies to maximize their effectiveness at collecting and retaining revenue. Nearly 80 percent of respondents to a recent survey named denials management as the task that required the most RCM expertise, followed by coding (50 percent) and prior authorization (50 percent).

More than one-half of providers planned to add or enhance digital payment options, which can alleviate the burden on staff to collect payments from patients, while 34 percent were exploring options for patients to pay high balances, and 32 percent sought an increase in self-pay options such as online and text-to-pay. Other ways to ease the pressure on RCM teams include expanding or making permanent remote work opportunities and increasing training to build expertise from within.

A growing number of healthcare organizations are turning to automated workflows to help address RCM and billing department labor shortages. In a survey from the Healthcare Financial Management Association (HFMA), 78 percent of respondents reported either using RCM automation or planning to do so, an 18 percent increase over a previous survey.

Technology Can Enable Audit Processes

Healthcare organizations that automate workflows and deploy analytics tools and denial management software can increase both efficiency and revenues by employing a hybrid audit strategy made up of prospective and retrospective audits. Doing so is one of the catalysts behind an uptick in internal audits; MDaudit research shows that risk-based audits increased by 28 percent in 2022 while prospective audits increased by 32percent.

Performing internal audits can catch and correct errors earlier in the claims cycle, helping hospitals retain as much as 25 percent of their total revenue. Streamlined audit workflows can help staff optimize their time, quickly identifying anomalies that could impact revenue and training and retraining staff on proper and ever-changing billing and coding procedures.

Because of manual, paper-based processes, a large multispecialty group practice in the Midwest was unable to achieve its organizational goal of auditing each of its 3,500 physicians yearly. However, by deploying technology to automate its audit workflows, the practice was able to focus on solving the most serious denial-related issues.

Using technology to prepare the audit records allows the practice’s RCM staff to conduct two audits a day. Previously, each audit could take weeks to compile the necessary data and complete the review of 10 charts. Besides workflow efficiencies, audit staff have returned significant revenue to the practice. Out of $14 million in claims and audits of 16,590 cases, it realized $1.9 million in additional revenue, $1.4 million in potential claw backs, and $7.8 million in agreed findings.

Technologies that use augmented intelligence and RCM best practices can help organizations increase efficiency, retain more revenue, and lower compliance risk. Revenue integrity is critical for healthcare organizations of all sizes, and no single solution will solve every challenge.

By creating fulfilling opportunities for RCM professionals, reducing manual workflows, and deploying innovative technology that helps staff increase efficiencies, organizations can turn today’s challenges into tomorrow’s opportunities.