What is Revenue Cycle Management Transparency’s Role in Keeping Healthcare Facilities Afloat?

While it’s true that patients are the lifeblood of any healthcare provider, it’s the accounts receivables that keep the proverbial chimneys burning. After all, if billings are not collected on time, your clinic or hospital may very well find itself short on cashflow. This, in turn, can have catastrophic effects on both your bottom line and your ability to service the infirm.

The Possible Problems

Of course, there many reasons why medical facilities can’t bill accounts receivables in a timely manner. The first and most common reason is that patients simply do not have the financial capacity to pay their medical bills. Such a problem can be alleviated by engaging the services of an eligibility expert, which can help your patients identify what government-sponsored programs they qualify under so that the government—and not third-party payers—will reimburse you.

Is Lack of Transparency with Denials Costing Your Hospital Money?

However, one of the most common causes of plummeting bottom lines is claims rejection. According to the American Academy of Family Physicians (AAFP), the average claim denial rate is between 5-10%, which represents a lot of money on the table for many healthcare institutions.

Further compounding this problem is the fact that payers are not exactly forthcoming about the reasons for their rejections. When you don’t know why they reject a certain claim, a treatment or service rendered to a patient has a higher chance of turning into an unpaid bill.

Why the Process Is Not More Transparent

There are many reasons why this lack of transparency prevails. The first and most common one is fear of competition. More specifically, they tend to keep information under wraps because if they divulge all their myriad reasons for denying a claim, a healthcare organization might simply opt to transfer to another service that has a lower denial rate.

Second, there’s is no uniform strategy or protocol for either payers or providers to analyze and present claim denial rates. Instead, each payer develops their own rules for denying claims and communicating them to clients. Hence, the reasons and transparency levels can vary widely from one payer to another.

Results So Far

Now that it’s clear what is revenue cycle management transparency’s role in keeping healthcare facilities financially sound, what can confounded providers do? Some healthcare facilities have installed a system that simulates the claims and rejection process. The system looks at the hospital’s data and adds to its “rulebook” instances where a claim was rejected.

If a facility enters a claim with similar parameters, it will immediately get flagged, preventing it from being sent to the payer and inevitably being rejected. By simulating the process, healthcare providers have a chance to review a case—and make a stronger case for its approval.


Real-Time Data for Denials Management Aids Practice’s Lagging A/R, revcycleintelligence.com
Top 4 Claims Denial Management Challenges Impacting Revenue, revcycleintelligence.com

Pete Ash

Pete is the Vice President of Sales & Client Services at DECO Recovery Management. He covers the Mid Atlantic region and specializes in Medicaid related topics. It is DECO’s Mission to maximize reimbursement to our clients by leveraging innovative technology, processes and compassionate advocates to provide exemplary service.

Categories: Hospital Revenue Cycle Management

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