What is Good Revenue Cycle Management and its Impact on NC Hospitals?

North Carolina is yet another state that may have no choice but to cut its hospital reimbursement rates in the near future. According to Betty Taylor, contributor to the Winston-Salem Journal, the state’s General Assembly proposes to slash off about $33.1 million in its budget for hospitals in order to meet other expenses, like teacher compensation benefits. Unsurprisingly, this proposal was met with dismay from healthcare groups and health providers in the state:

“This budget adds more than $45 million on top of cuts to hospitals last year (of $164 million), bringing the total reduction to more than $200, more than a 15 percent reduction over the biennium,” Hugh Tilson, executive vice president of the N.C. Hospital Association, said in a statement.

“This budget again disproportionately targets hospitals for Medicaid cuts and will require hospitals to reprioritize spending mid-year, potentially eliminating even more services and jobs in our communities,” Tilson said.

Perhaps now’s the best time for NC hospitals, or those in other states with the same circumstances, to ask, “What is good revenue cycle management in this period of yet another healthcare budget cut?” This is important because there may be little that medical and healthcare groups can do to appeal the General Assembly’s budget proposal. Streamlining their claims processes, instead, is likely the most they can do, especially since about 19.3 percent of medical claims processed in the U.S. are inaccurate, resulting in tremendous backlog and a lot of money going down the drain.

budget proposal reduces hospital reimbursement rates
Good revenue cycle management can be achieved in a lot of ways, but they all begin with hospitals properly reviewing their healthcare data. It’s important for them to identify denied claims from their database early on because these can significantly affect their revenue cycle. In fact, denials can cause a hospital to miss about 90 percent of its revenue opportunities because they lead to plenty of missed collections and a long time for accounts receivables to just sit there, waiting to be paid.

Working with healthcare eligibility specialists like those from DECO Recovery Management can help NC hospitals optimize revenue by making absolutely sure that their patients are eligible for benefits in the first place, and in cases that they’re not, find the workaround for patients’ eligibility. Eligibility experts add value to what revenue cycle management companies do by mainly ensuring the recovery of revenue from accounts receivables. As of August 2014, North Carolina is yet to expand its Medicaid programs, which means that NC residents would still not qualify even with the minimum income required of $16,105/year for one person or $32,913/year for a family of four recognized in other states. Hospitals just can’t afford to lose any revenue now that their budget is likely to be cut.

(Source: Budget proposal reduces hospital reimbursement rates, Winston-Salem Journal, August 01, 2014)

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