By Chris Klitgaard, Founder and CEO, revology
LinkedIn: Chris Klitgaard
LinkedIn: revology
Roughly 4.1 million Americans will turn 65 every year through 2027. This is the largest number of those reaching retirement ever, and Boomers are leading the way. The so-called “silver tsunami” is also coming as the healthcare industry prepares to lose 2 million workers by 2029. As they go, the formidable skills and knowledge they’ve developed will leave with them, and there will be little chance of finding people capable of filling their shoes.
This generational skills gap impacts all areas of healthcare. But when it comes to insurance claims, the loss of experienced workers who can navigate this complex terrain is particularly tough, especially for health systems in smaller and middle-tier markets with shallower talent pools. This combination of stalled claims, limited resources, and escalating costs is straining hospitals that are already operating under razor-thin margins.
A never-ending claim cycle
For decades, healthcare has been stuck in a repeating insurance claim cycle that delays and prevents them from receiving all the reimbursements they’re owed from payers. Here is a typical example: A provider submits a claim, and the insurer (payer) pays some of it, but denies some, too. It’s then on the provider to rework and submit the claim by a deadline set by the insurer. If not completed in that window of time, those funds may never be recovered.
Insurers deny provider claims for many reasons, ranging from missing patient information to a lack of prior authorization. But hurdles set by payers that cause deadlines to be missed create a vicious cycle. In a poll of acute care hospitals by healthcare company Premier, results showed:
- 15% of claims submitted were at first not covered though many already had pre-approval.
- Roughly $10.6 billion was lost fighting claims that ought to have been settled upon submission; and
- Over half of claims denied by private payers were overturned on appeals that cost providers roughly $20 billion a year.
Denials are profitable because insurers hold onto money, so they’re in no rush to change. Some insurers have invested in new technology – machine learning (ML) and natural language processing (NLP) – to speed and improve the accuracy of claim reviews. Still, provider employees have not felt the impact yet of these technologies, and so they must remain steps ahead in the claims process, despite being bogged down by huge workloads to insure appropriate payment for their services.
Solving a skills crisis
This cycle needs to change and there is emerging technology in provider-side healthcare revenue cycle management (RCM) that offers potential. It can fill in generational talent gaps while curtailing the time, effort, and human power that goes into trying to collect what is too little money. The ideal scenario is that humans, powered with the right technology, will collect the right amount of money. These funds, in addition to the significant savings that come with greater efficiency, can then be used to deliver a better quality of care.
For example, let’s say you’re a 180-bed hospital with a 40-person revenue cycle staff. If 20 of the most experienced enter retirement over the next three years, it would be highly unlikely you’d find the talent to replace them in a smaller tier market and talent pool. This is where emerging RCM technology can streamline workflows, drive collections, and help lift a health system’s financial stability by emphasizing high-value claims.
RCM tools can make the claim process intuitive, remove guesswork, and plug generational skill holes. It does so by handling functions from insurance processing to data analytics, billing to collections, payer contracting to patient enrollment, and more. It can prevent inaccurate patient information, produce greater operational efficiencies, increase cash flow and revenue capture, and even support regulatory compliance. This, in turn, improves a health system’s financial standing and resiliency, adding ease that will help providers succeed.
Bridging gaps with technology
Analysts from Research and Markets anticipate the RCM market will reach nearly $240 billion by 2030. There are many solutions available, and you can expect to see a lot more vendors rushing in to take advantage of the expanding market. You’re trying to change a claims cycle that’s culturally embedded in the industry, so work with experienced technologists.
If you’re considering an RCM solution, be sure whoever you go is committed to acting as an extension of your team. You’ll need this to handle the complexities, and they should provide ongoing work strategies and best practices. The time to act is now. Boomers are leaving in record numbers and the volume is only going to increase. Be sure you’ve got the right mix of people and technology in place to change the claims cycle and rise above the challenge.