What is the importance of revenue cycle management companies for U.S. hospitals? For one of the biggest public hospitals in the country, they would have been instrumental in preventing financial losses from human error.
The Cook County Health and Hospitals System in Illinois said that it incurred around $165 million in revenue losses in the last three years, mostly because of billing and clerical errors.
Cook County Commissioner Sean Morrison cited lack of proper training as one reason for the incurred losses since 2015. A county inspector general report also attributed the incident to registration clerks, coders, and billers who have no previous background on their jobs.
Confusion over insurance claims also formed part of the problem since the Affordable Care Act (ACA). While more insured patients have been admitted to the hospital in the last three years, many have been denied their claims due to hospital schedulers that used a different “financial identification number.” Whether employee mistakes serve as the reason for hospitals’ lower profits, the trend is not just exclusive to the Cook County Health and Hospitals System.
Moody’s Investors Service’s analysis of 160 non-profit and public hospitals in the country showed that their median operating cash flow margin fell 8.1% in 2017. Part of the reason behind the decline involved more patients that seek healthcare in non-hospital facilities.
An increasing rate of enrollment in Medicare also affects their bottom-line, since it provides hospitals with a lower reimbursement than commercial insurance firms. Add the growing expense from a tight employment market, and revenue situation only becomes more difficult, according to Moody’s.
U.S. hospitals should consider efficient revenue cycle management services to keep them afloat in the coming years, especially after the government has repealed the individual insurance requirement of the ACA.