In today's competitive and evolving healthcare revenue cycle management environment, RCM business leaders must make strategic decisions that generate growth and increase efficiency in a cost-conscious manner amidst a complicated, fluid labor market – not exactly the easiest job description in the world. Sometimes, hard jobs lead to selecting ‘easy’ solutions.
When it comes to managing revenue cycle and data sourcing, choosing a single-source RCM data provider may seem like a convenient, cost-effective decision. However, in my 35 years of experience sitting in your seat, I’ve found that relying solely on one source puts all the proverbial eggs in one basket. Sure, there may be gains – simplicity, 3rd party management, and on-premises staffing efficiencies. But how do they compare to the potential risks? Here are six things to consider.
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1. Healthcare Vendor Market Contraction = Fewer Choices
Integration, acquisition, consolidation – call it what you want. At the end of the day, we’re in a market where few dominant players in the industry are in hot pursuit of smaller competitors, or at the very least, tilting the scales of business in their favor. In such a situation, hospitals may find themselves with limited options for data sources or revenue cycle management platforms. Selecting a single-source option leaves little room for negotiation, innovation, or competitive advantages. You also may find yourself paying the same vendor to correct an issue they caused or should have resolved earlier.
2. Regional Expertise > National Volume
Operating across multiple markets requires access to accurate and reliable data from various regions. A single-source data provider might have a massive pool of information on a national scale, but not the necessary regional expertise or payor coverage by geography, leading to gaps in information and potential inaccuracies. This can significantly hinder decision-making processes and may lead to errors when dealing with diverse markets.
3. One Data Source = The Same View Over (and Over).
If you keep looking in the same place for data, you’re likely to keep finding the same things. But, data changes. Workers change jobs; employers change health plans; people move; deductibles readily change. Nothing ever stays the same, and the same can be true when you keep looking at the same data sets. And that’s a risk: Relying solely on one data source limits a hospital’s ability to capture all potential revenue streams, especially if they’re not multi-threaded. Different sources and data providers might offer unique insights, which can lead to discovering untapped revenue opportunities. By depending on a single source, businesses miss out on valuable information and may leave money on the table. No one can afford to leave a penny unturned in today's market. The more data at your disposal creates the greatest opportunity to recover all revenue due to you.
Additionally, some health systems still use basic eligibility checks or insurance verification with no detail. Relying on a single-source data provider or revenue cycle management platform might mean missing out on vital information, as the market is fraught with antiquated tools which don’t solve today’s challenges. Some of the country’s largest clearinghouses have reported that coordination of benefits-related denials accounts for over 35% of total denials. Did you know you could resolve about 90% of the point of registration? Well, you can’t if you have a single solution provider that doesn’t have that capability, then you’re stuck paying for transactions up front, then again to correct them later. I call this lacking perimeter defense.
4. One Clearinghouse? One Big Problem Away from Downtime!
When software glitches, power outages, or natural disasters occur, business - and revenue – can go down, too. No system or platform is entirely immune to problems or downtime as they rely on multiple entities doing their jobs. By relying on a single-source data provider or revenue cycle management vendor, businesses become highly vulnerable to potential disruptions. For example, if the chosen provider experiences technical issues or downtime, critical processes like eligibility verification, notice of admission, and prior authorization can be affected, leading to delayed revenue cycles and decreased cash flow. This can significantly affect patient satisfaction, data integrity, and process flow built around patient information.
5. Know Thy Source, Know Thy Patient
More options are always better. Cross-referencing data from multiple sources is crucial to ensure accuracy and reliability, whether done by a human or advanced technology. Different data providers may have distinct data collection methods, leading to occasional discrepancies. However, by using multiple sources, businesses can identify and resolve these discrepancies, ensuring they have a comprehensive and accurate understanding of the information at hand.
6. Old technology + Old Tools = outdated claims denial results.
Was your RCM vendor’s infrastructure built before your last automobile purchase? If that’s the case, it’s probably outdated. Sticking with an outdated or inadequate technology solution is a recipe for poor results. Old technology might lack essential features or fail to keep pace with industry advancements (and there have been a lot in the last couple of years), resulting in subpar performance and an inability to handle emerging challenges effectively. When did your provider last update its toolkit or modernize its technology? Isn’t it time you asked?
While a single-source data provider or revenue cycle management platform might initially seem like a convenient option, it is essential to recognize the potential risks and drawbacks associated with this approach. Market contraction, regional data limitations, missed revenue opportunities, vulnerability to problems, discrepancies, outdated technology, and changes in data availability are significant concerns that can impact a health system’s ability to maximize its claims – and meet its budgets.
To mitigate these risks and ensure a robust data strategy, RCM leaders should consider diversifying their data sources and exploring multiple Revenue Cycle Management (RCM) data sets. By adopting a more comprehensive and flexible approach, companies can make informed decisions, capitalize on opportunities, and position themselves for long-term success in an ever-changing healthcare revenue cycle landscape.
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Brent Grimes is Wave’s new GM of Hospital, Physician, and Indigenous Health. He has served in multiple executive roles in healthcare RCM throughout his 35-year career. He possesses a unique finance and operational skill set in government payer programs, denial management, physician relations, ICD-10, management, and managed care, having served most recently as executive vice president of Morgan Financial Group and previously as VP of Clearinghouse at OliveAI and President at clearinghouse at Healthcare IP, after more than a decade as a revenue cycle leader at INTEGRIS Health.
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