Providers to Payers: Show Us The Money

A provider study highlights 2024 revenue cycle challenges and opportunities and payers are in the cross hairs. 

Their mind’s on their money and their money’s on their mind — a/k/a physician practices and their revenue. In a recent survey, practices reported they spend 41% of their time, nearly half of every day, thinking about revenue cycle management (RCM).

Other than the obvious reason of getting paid: Why? The same survey spotlights the challenges and opportunities: from “shifting payer requirements” and a “fragmented claims management process” on both sides to the need for streamlined automation powered by, you guessed it, AI.

The survey in question —The State of Payer Reimbursement in 2024: It’s Time to Stop Living in Denials — was commissioned by Encoda, a claims and denial software vendor, and conducted by healthcare consultancy Sage Growth Partners. The survey included 84 practice leaders and administrators from single- and multi-specialty practices ranging from 10 to 200+ physicians.

Level setting: The state of revenue cycle in 2024

The Encoda-Sage survey notes that providers are meeting financial and workforce shortages by “going back to basics” and doubling down on RCM. It’s apparently a good time to refocus. Among practice personnel:

• Only 25% are “confident they’re receiving every dollar they’ve earned from payers through their medical billing process”
• Only 31% “feel strongly that they have the data insights needed to identify patterns in claim denials
• Some 25% think they spend too much time on RCM issues

“With shifting payer requirements and other challenges impacting returns, it’s no wonder leaders are looking for ways to optimize their financial operations,” said Lisa Taylor, CEO of Encoda, in the survey report press release.

But how to optimize? How much money is left on the table from unpaid/underpaid claims and inefficient claims management? And are health plans the only reason why?

The best it can be? Attitudes toward current reimbursement processes

Survey respondents repeatedly state that payer rules present the greatest challenge to managing revenue and that it’s increasing.

“Changing payer rules (62%) and difficult payer relationships (45%) were far and away the top two challenges that respondents named when it comes to managing revenue. Furthermore, for the 44% of respondents who said their ability to manage and collect revenue over the past three years has gotten harder.”

When payer rules change, practices must update their practice management systems and workflows to maintain automation and efficiency.

Other reimbursement challenges that impact automation and efficiency include data deficiencies and claims denial mismanagement — on both the payer and practice side.

Yes, providers cite payer rules and relationships as well as a lack of payer data transparency. But the report’s top reasons for claim denials aren’t limited to health plans.

The root of the issue: Unpacking claims and denials

In the survey, practices identified the top five reasons for denials:

1. Duplicate claims (30%)
2. Lack of coverage (28%)
3. Missing data (27%)
4. Coordination of benefits (23%)
5. Timely filings (22%)
    

Providers may be frustrated with payer denials but most of the top five reasons track back to practice management.

Once a claim is denied, however, reversing the denial and securing reimbursement is challenging for survey respondents:

• 55% claim that > 75% of their denied claims are followed up on, but . . .
• 73% said that 75% or less are paid when resubmitted with . . .
• 25-50% of resubmitted claims “going nowhere.”

Time’s up: What’s next for RCM and practice management

Practices are looking at multiple solutions to address claims errors, denials and impacted reimbursement and revenue.

The Encoda report notes that current claims submission methods leave dollars on the table because claims and denial processes — and the tools and workflows to support them — are lacking. The report adds: “Solutions that employ automation and AI will be critical to updating today’s RCM processes to help ensure practices get paid more efficiently and accurately from the payers.”

Some 51% of survey respondents were comfortable exploring AI to increase efficiency and automation in the claims and denial process and thus revenue recognition. Specific focus areas included:

• Using scrubbers to validate claims pre-submission and prevent/reduce problematic claims
• Focusing billers on problematic claims only increase efficiency and speed payment
• Having a practice management system with multiple capabilities — ranging from denial, revenue cycle and claims management to data extraction, analytics and reporting
• Having a system “with a single interface to be able to work all claims in one work queue”

From these findings, Encoda concludes: “It’s clear—current solutions for maximizing payer

reimbursement are falling short . . . However, today’s new technologies have been proven to streamline billers’ work and increase automation and transparency, while allowing practices to accomplish more with less.”

“In other words, practices that don’t settle for the current fragmented set of tools will be able to cost-effectively collect the most revenue in the shortest time possible.”