Revenue Cycle Management
Healthcare Blog

Statistics have it that hospitals actually collect only 30% of patients’ balances with some even collecting less than that.

If you are in charge of your hospital finances you need to know why this is happening and how to fix it.

Hospitals are single-handedly the most difficult to manage institutions in any economy because of their complex organization and the fact health professionals are not expected to be business oriented. Health care professionals in finance and general accounts personnel face various challenges in revenue cycle management and often have to outsource third party medical billing services to cater to their needs. Patient collections after insurance claims have been paid is especially tasking because of the poor strategies geared towards collecting the funds.

What is this fiscal cliff that is being perceived by many as some financial Armageddon that is threatening the American economy by the beginning of 2013? 

Among others, the culprit is a combination of expiring tax cuts and mandated Federal spending cuts that is sure to run havoc to American industries. The sectors that are at most risk are defense and the health care industry.

Beginning on October 1, 2012 several healthcare reform measures will kick in. 

One reform measure hospitals have been preparing for is value-based purchasing, which is where hospitals will receive Medicare-reimbursement scores based on the level of care they deliver (patient satisfaction). This means that if a hospital receives low patient satisfaction scores, there will be reductions in Medicare reimbursements.

What’s one of the best ways to improve your organization’s cash flow? Accelerating and maximizing collection of accounts receivable, of course! In most organizations, increase in the amount of capital to fund investments in technology, people, and training depends on accounts receivable collections.

Healthcare reform impacts

On March 23, 2010, the President signed into law what is known as Patient Protection as well as Affordable Care Act of 2010. In addition the Health Care and Education Reconciliation Act was signed into law a week later on March 30th 2010. Both acts are referred to collectively as “PPACA”. Although most of these legislative changes are not going to take effect until 2014 or even much later, a number of provisions are self-implementing and as a matter of fact took effect immediately.