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Sustainable RCM Solutions
for Rural Hospitals

Roughly 60 million people or nearly one in five Americans, live in rural areas and depend on their local hospitals for care. Changes in the healthcare industry continue placing increased pressure on vital rural hospitals.

155 rural hospitals closed between Jan. 1, 2010, and Aug. 21, 2019, but 18 rural hospitals closed in 2019, making this year a record year for rural closures.

Flat or declining patient volumes, flat revenues, bad debt and labor costs are the top revenue concerns in many  midwest hospitals; As a result, pre-tax margins are nearly 3.7% lower.

Across the U.S., more than 600 rural hospitals are at risk, according to an estimate from iVantage Health Analytics. A variety of issues have put them in a precarious position according to the American Hospital Association.

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1. Low patient volume & a shift from inpatient to outpatient care Hospitals experienced EBITDA margin declines of - 9.4% due to softening patient volumes (August 2019).

2. Heavy reliance on government payers However, government programs only pay hospitals about 87 cents for every dollar of their costs.

3. High cost of drugs Resulted in roughly $1.8 million in new spending for the average hospital. (January 2019).

4. Lack of Medicaid expansion Over the last 10 years, states that have refused to expand Medicaid experienced the most rural hospital closures (75% of the total).

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CONTINUED REVENUE CYCLE CHALLENGES

1. Commercial payer denials

  • The quantity of proofs of medical necessity has increased

  • Clinical validation denials are more difficult to appeal

  • Payers who issue substantially more denials than other payers


2. Difficulty finding qualified revenue cycle staff

  • Scheduling

  • Registration

  • Case management

  • Billing and A/R

  • Coding

  • Denial management
     

3. Lack of funding for new technology

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GENERAL SUGGESTIONS

1. Understand the underlying causes of any revenue leakage.
Are they unique to my organization or are they the result of external factors?

2. Review financial costs for revenue leakage (due to changes in labor, drug and vendor costs).

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SPECIFIC SUGGESTIONS

A hospital’s financial health depends on claims being submitted correctly, quickly and processed and paid as soon as possible. Adopt the following to accelerate the revenue cycle:

1. Track claims through the entire revenue cycle

  • Minimize billing mistakes

  • Implement Point of Service Collections program to facilitate collections of patient responsibility.

  • Troubleshoot issues through constant revenue cycle monitoring: establishing goals, targets and baselines to drive the process.


2. Identify missed revenue

  • Admissions errors

  • Billing errors

  • Coding accuracy

  • Under-reimbursed claims

  • Drug reimbursement - explore participation in 340(B) programs


3. Be proactive rather than reactive.

  • Partner with outside companies who can assist with data aggregation and analysis

  • Identify questions to investigate through data analysis process

  • Formulate possible solutions and follow through with implementation

SPECIFIC SUGGESTIONS

A hospital’s financial health depends on claims being submitted correctly, quickly and processed and paid as soon as possible. Adopt the following to accelerate the revenue cycle:

1. Track claims through the entire revenue cycle

  • Minimize billing mistakes

  • Implement Point of Service Collections program to facilitate collections of patient responsibility.

  • Troubleshoot issues through constant revenue cycle monitoring: establishing goals, targets and baselines to drive the process.


2. Identify missed revenue

  • Admissions errors

  • Billing errors

  • Coding accuracy

  • Under-reimbursed claims

  • Drug reimbursement - explore participation in 340(B) programs


3. Be proactive rather than reactive.

  • Partner with outside companies who can assist with data aggregation and analysis

  • Identify questions to investigate through data analysis process

  • Formulate possible solutions and follow through with implementation

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WHERE TO TURN FOR ASSISTANCE?

Consider short-term outsourcing as a solution. In a 2019 survey, 87% of  hospital CEOs said they were considering outsourcing A/R. They determined
the right partner could provide expertise and cutting-edge technology that was difficult and prohibitively expensive to obtain.

1. Outsource strategic portions of revenue cycle

  • Targeted, short-term outsourcing

  • Leverage knowledge and technology for specific problem areas

  • Can enable success long after the relationship ends or can become permanent


2. Short term outsourcing typically lasts two years or less.

  • It may deal with specific challenges, backlogs, staff shortages, etc.


3. A good partner can:

  • Analyze operations to identify root causes of problems

  • Assist in improving processes in the long-term

  • Assist with the process of returning services in-house

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“Take care of the basics, if you don’t, you probably won't be in the game.
A lot of organizations have talk about it, but a lot don't do a great job at it.”

 

 

 

 

 

We welcome your comments and questions

contact Donald Tapella at Medical Recovery Services

Email: dtapella@mrsa1.net

Phone: (816) 229-4887, ext.112

Fax: (816) 229-4787

visit our website at http://www.mrsa1.net/