What is Healthcare Revenue Cycle Management (RCM)?

April 1, 2022

Jon Giuliani
Vice President of Operations

How to Stop Leakage Along the Revenue Cycle Journey

An end-to-end reset of revenue cycle management (RCM) practices can help hospitals and health systems optimize collections and reduce denials as they work to overcome unrelenting margin pressure in today’s fast-changing operational environment.

What is revenue cycle management?

The revenue cycle is the financial engine that powers a healthcare organization. Complex, interlocking subsystems must mesh perfectly to ensure patient service revenues are consistently and accurately captured and collected. Shortcomings in any one of several key areas—clinical coding, claims submission and payment processing—can result in chronic underperformance and lost revenue.

How have hospitals been doing?

According to a report by Kaufman Hall, median hospital operating margins fell 71% from December 2021 to January 2022 to a minus-3.68%; operating room minutes fell by 16%, length-of-stay increased by 9%, and labor cost per adjusted discharge jumped by 15%.1

These impacts further undermined organizations that had already been struggling to improve cash flow and margins before 2020-2021. Facing rising costs and declining revenue, organizations are now starting to address fundamental but often-overlooked weaknesses in their traditional RCM practices. These problems can include:

  • Mismatched or inappropriate pricing
  • Registration inaccuracies and inefficiencies
  • Porous charge capture
  • Cumbersome pre-certification and case management
  • Coding errors
  • Ineffective claims editing
  • Inadequate denial management and growing write-offs
  • Deficient patient collections and limited or non-existent bad debt review

How can hospitals strengthen their RCM?

To stop revenue leakage, hospital must adopt a systematic approach that focuses on optimizing each phase of the revenue cycle. The following eight areas are critical to improved RCM performance:

1. Pricing Integrity

Facing new requirements to provide greater pricing transparency to consumers, hospitals have been pushing to develop and implement solutions that collect, organize and post enterprise pricing. But before this information can be shared publicly, healthcare organizations must be sure their prices make economic sense and are justifiable and competitive when compared to their peers. To accomplish this, providers need to create rational pricing models assembled around cost, reimbursement and peer pricing data.

The process starts with a review of existing pricing information across all hospital revenue streams, including emergency visits, room rates, diagnostic and therapeutic procedures, operating room, anesthesia, PACU, pharmacy and medical supplies. With this baseline established, comparisons can be made to a designated group of peer entities.

These comparisons allow hospitals to see exactly how their pricing stacks up against specific competitors and also against averages for the entire group. Quantifying the extent to which prices may deviate from group averages enables hospitals to quickly spot opportunities for increasing prices while still remaining competitive. Conversely, pricing models also enable the correction of higher prices that represent over-market outliers.

Equipped with solid pricing, hospitals now have the data required to comply with federal transparency rules. Making the hospital’s array of standard charges and prices for 300 specific shoppable healthcare services easily accessible online is a vital step toward improved patient engagement and satisfaction. It can also provide a competitive advantage, providing the numbers have been optimized before posting.

2. Pre-Registration

Providers are critically dependent on front-end registration staff for insurance coverage verification. Most registration personnel have access to real-time insurance eligibility software that uses the patient’s insurance number to confirm whether coverage is in place. But even though these systems are from 75-90% accurate, staff frequently fail to use the applications properly or even bother to use them at all. Reasons vary: They may not trust the system’s results; they may face productivity quotas and time pressure, or they may assume verification will be done later.

It’s true that the daily flow of patients can be relentless and registration personnel are frequently pushed to the limit. But that’s all the more reason for hospitals and physician offices to implement comprehensive processes that systematically flag coverage rejections and provide staff with an opportunity to resolve them, either before the patient arrives or before service is provided. They simply can’t afford not to: Unresolved claims due to insurance coverage issues can make up as much as one-quarter of all claim denials.2

3. Charge Capture

Charge capture involves accurately documenting medical services provided to patients so medical coders can attach the appropriate code to the service. Coders, as well as coding software, should be able to determine if the clinical documentation is complete. If it is not, an automated request system should be in place to quickly and accurately obtain the information required.

Incomplete or inaccurate documentation puts medical practices and hospitals at risk for both under-coding and over-coding. Under-coding results in money legitimately owned to the provider being left on the table. Over-coding can trigger expensive claw-backs, non-compliance penalties and even potential fraud charges.

Unfortunately, because codes continue to expand in number and also change frequently, under-coding and over-coding remain common problems. Capturing the correct information is therefore essential for correct claims processing. Having a system that can easily identify which staff members are consistently having documentation problems enables RCM managers to point these issues out and provide assistance to strengthen the charge capture process.

4. Pre-Certification and Case Management

Pre-certification is the review and approval process that payers, including commercial insurers, Medicare and Medicaid, mandate for some treatments and procedures. Beyond potentially disrupting or preventing required medical care, pre-authorizations can have a major impact on collections. An estimated 25% of claim denials result from utilization issues, which can include medical necessity, pre-authorization, DRG downgrades and experimental treatments.3

Mitigating utilization denials requires that hospitals be fully versed in payers’ clinical policy bulletins. These frequently changing documents describe what the payer will and won’t cover, how they define medical necessity and the treatments they consider to be experimental. Hospitals also must be ready to construct cogent and detailed appeal narratives that can make a strong medical case for the treatment provided.

Denials relating to authorizations can also be triggered by something as simple as a missing or misplaced authorization code. By reviewing claims information using intelligent automation capabilities, these kinds of mistakes can be quickly identified and addressed before submission.

5. Coding

Medical coding is how medical services are documented for billing purposes. Coding and billing mistakes are responsible for about 15% of all denied charges. One of the most common problems is the failure to implement automated solutions and edits that can provide safeguards against a range of coding errors. These capabilities can greatly reduce errors triggered by inappropriate CPT and HCPCS code usage, payment bundling and crosswalk mistakes, registration and demographic omissions or mistakes, as well as filing errors, including the failure to designate the patient responsibility portion of the claim.

Regular charge master reviews can identify invalid HCPCS/CPT® codes, help ensure line-item charge compliance and modifiers, confirm valid coding assignment, and match pricing alignment with fee schedules. These safeguards provide a critical baseline for coding accuracy and revenue cycle optimization.

6. Claim Submission

Claim submission entails the preparation and transmission of patient service claims to clearinghouses and on to payers for reimbursement. This phase of the revenue cycle represents providers’ final line of defense to ensure claim accuracy and resultant prompt payment. Critical to submission success are appropriate edits, or automated rules, that can flag deficient claims.

Failure to develop a robust and flexible editing system can create a domino effect of costly problems. These can include increasing denials and rising error rates, non-compliance penalties, and fraud and litigation expense.4 An estimated 9% of $3 trillion in hospital charges were initially denied in 2016, with the administrative cost of rework to overturn denials estimated at $118 per claim, or $8.6 billion nationwide.5

It is therefore important to incorporate into the revenue cycle automated, intelligent claims review edits that will quickly flag charge capture issues, coding and compliance errors, billing mistakes and documentation omissions or errors.

7. Insurance Follow-up and Root Cause Identification

Insurance follow-up (commercial, Medicare and Medicaid) includes any payer-provider communications or interactions aimed at resolving unpaid, delayed or denial claims. Root cause identification is part of a denial management process focused on working back from the denial to identify and rectify the underlying reason for the unpaid claim.

While some providers continue to task internal billing staff with working all denial follow-ups, others increasingly are opting for a hybrid approach that incorporates external resources and organizes claims by size and age. This strategy is particularly important in the face of growing shortages of qualified billing personnel. A recent survey of healthcare leaders found that 92% of respondents were facing challenges attracting and retaining support staff.6

A hybrid denial remediation approach typically incorporates three phases:

  1. Internal staff works commercial accounts up to 60 days from billing date
  2. A primary AR vendor works accounts for the next 120 days from day 60 to 180
  3. A pre write-off vendor, also known as a secondary AR management firm, focuses on highly aged claims of 180 billing days or greater

This triage strategy helps ensure all partial, late, or denied payments are systematically worked to resolution, regardless of size or age. As part of the process, rule-based denial mapping can be applied to identify how, why, and where denials are occurring. Typically, causes fall into one of seven categories: utilization, coverage, contractual, coding and billing, submission/ re-billing, cash posting and process delays. From detailed root-cause reports, providers can isolate and eliminate denial origins.

8. Patient Collections and Bad Debt/Zero Balance Review

One of the most effective ways to stabilize the revenue cycle is to develop comprehensive methods for improving patient collections before or at the time of service. A patient payment process should include providing accurate estimates through price transparency and multiple payment platforms. By taking lessons from the retail industry, providers can enhance the digital patient experience to maximize collections.

At the other end of the revenue cycle spectrum, specialized, forensic audits of written-off or zero balance claims provide an opportunity to ensure all available dollars are collected from payers. Zero-balance recoveries involve comparing payments received to anticipated revenue based on episode-of-care specifics, coding best-practices and payer-provider contractual terms. Any underpaid claims identified are resubmitted, per the payer’s terms, for reimbursement.

Recovered underpayments from zero-balance reviews can total 1% of write-off net placements, an amount that may be significant for large hospitals and health systems that typically write off tens of millions of dollars annually.

Developing a healthy revenue cycle

Now more than ever, providers can ill-afford to continue relying on outdated and inefficient RCM practices. Even though the pandemic is receding, organizations undoubtedly will face rising costs and downward pricing pressure in the years ahead. It is therefore critical that they assess and reengineer each phase of the revenue cycle to achieve incremental performance gains. Taken together, these improvements will accumulate to produce significant found revenue.

ParaRev can help

ParaRev, a leader in healthcare revenue cycle management, works side-by-side with you as a virtual extension of your hospital central billing office. We help you improve operating margins and collect more of your revenue through a seamless and collaborative partnership with your internal team.

Let ParaRev help your organization supplement any staffing shortages, stay on top of accounts receivable inventory, identify where and how to maximize revenue and, if not completed yet, implement a price transparency program.

Contact us today to learn how you can begin the process of transforming your revenue cycle.

  1. National Hospital Flash Report: February 2022, Kaufman Hall, Feb. 28, 2022.
  2. ParaRev internal data.
  3. Ibid
  4. Six Best Practices for Claims Editing, Optum Insight, 2012.
  5. Philip Betbeze, Claims Appeals Cost Hospitals Up to $8.6B Annually, HealthLeaders, June 26, 2017.
  6. Jacqueline LaPointe, Hospital Revenue Cycle Transformation Needed to Boost Performance, Rev Cycle Intelligence, Oct. 19, 2021.
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The Top 10 Revenue Cycle Issues Facing Hospitals in 2022

February 16, 2022

Jon Giuliani
Vice President of Operations

  1. PRICE TRANSPARENCY.The back-end work is complex. The data requirements are enormous. And making a user-friendly and informative portal is daunting. Hospitals will require expert technical assistance. There will be a cost, but the cost of non-compliance outweighs the initial investment.
  2. LAB PAMA REPORTING.Medicare extended the deadline for certain hospitals and clinics which meet the description of an “Applicable Laboratory” to report private payer lab rates to the first quarter of 2023. It’s a reprieve–for now. But knowing if you’re one of those certain hospitals or clinics may require expert help.
  3. NO SURPRISES ACT.While providers and medical associations are voicing their disappointment in the NSA arbitration process, they are generally supportive of the NSA. That being said, implementing the requirement will continue to be a priority for hospitals.
  4. APPROPRIATE USE CRITERIA.Medicare moved the deadline for OPPS hospitals and interpreting radiologists to comply with reporting requirements to January 1, 2023. But that doesn’t mean hospitals can rest. Work throughout 2022 will be required to comply with these requirements.
  5. STAFFING CHALLENGES.The inability to adequately achieve a full cadre of qualified revenue cycle employees directly impacts a hospital’s cash flow and financial performance. This, in turn places immense pressure on capital and operational needs.
  6. ADMINISTRATIVE COSTS.Keeping the doors open will continue to drain resources and reserves as hospitals face rapidly rising administrative costs. The challenge for hospitals will be in finding ways to stem the tide of rising costs and potential red ink.
  7. AR RECOVERY & RESOLUTION.Exacerbated by staffing shortages, pursuing aging, small-balance claims will gain better success by using a dedicated, specialized team ensure quicker cash conversion and a reduction of bad debt reserves.
  8. CLAIM DENIAL MANAGEMENT.Hospitals will need to increase their reliance on intelligent automation and staff specialization to efficiently process all claims, regardless of size or age, for hospitals. This will contribute to cash flow and improved operational management.
  9. INVOICE & PAYMENT PROCESSING.Medical practices–whether hospital-owned or independent–cite patient collections as a top revenue cycle struggle. Providers are now challenged to create invoicing and payment systems that are easy for patients to use and that offer a variety of payment options. Providers are also required to follow strict guidelines to protect patient information, making it even more difficult to create a patient-friendly portal that encourages users to pay in a timely manner.
  10. IMPROVING THE PATIENT EXPERIENCE.Healthcare organizations face tough competition in attracting and retaining patients who demand an experience that matches the level of customer service they expect from other consumer experiences. For organizations offering a variety of services in different locations, it becomes even more challenging to provide accurate and up-to-date information from one centralized database. Here is where the patient portal becomes either most valuable, or most challenging.

ParaRev offers a full spectrum of healthcare revenue cycle management services, from front-end charge master analysis and contract management to end-of-cycle zero-balance denial recovery. We’re committed to working seamlessly with your hospital financial and billing staff to minimize denials and bad debt, improve collections and boost revenues.

ParaRev has three operational divisions focusing on the core pillars of the healthcare revenue cycle:

  • RevCap, the revenue capture services division, supports primary and secondary AR recovery resolution, targeted denial resolution and zero-balance underpayment recovery. 
  • RevTeg, revenue integrity services division, provides contract analysis, coding and compliance services and market-based pricing analysis. 
  • RevTek, the revenue technology services group, offers ParaPath, our revolutionary denial decision software, and ParaRev Data Editor, a robust web-based single source solution for pricing, coding, reimbursement, and compliance, along with price transparency, contract management and payer scorecard tools.

ParaRev’s comprehensive capabilities, when aligned with hospital internal teams, can help hospitals improve operating margins and collect additional revenue. Contact ParaRev for help in overcoming the top 10 issues facing hospitals and health systems in 2022!

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Take Steps to Stay Abreast of Evolving Telehealth Reimbursement

September 3, 2020

Jon Giuliani
Vice President of Operations

As the use of telehealth skyrockets due to the COVID-19 pandemic, financially hard-hit providers must consider new revenue cycle management protocols to ensure the best chance for full reimbursement.

In March 2020, telehealth utilization exploded 4,300% from a year earlier as patients and providers sought alternatives to office visits for routine care. Yet long-term uncertainty about Medicare reimbursement and wide disparities in the way commercial payers and Medicaid programs reimburse for telehealth mean providers must be extra-vigilant to limit denials and underpayments.[1]

Key steps like ensuring complete documentation of services, including the audio and/or visual functionality used to deliver the care, as well as close scrutiny of telehealth claims, are essential to maximize reimbursement, revenue cycle experts with Healthcare Financial Resources (HFRI) say.

“With telehealth services accounting for an ever-larger percentage of care, making sure you’re collecting every telehealth dollar you’re entitled to will be critical to sustaining cash flow in the months and years to come, particularly amid the lingering downturn triggered by COVID-19,” said Dan Low, HFRI’s director of operations.

As defined by the American Medical Association, telehealth services generally fall into one of four modalities:

  • Real-time, audio-visual communications that link physicians and patients
  • Store-and-forward technologies that collect images and data to be transmitted and interpreted later
  • Remote patient-monitoring tools such as wearable devices, blood pressure monitors and other devices that record and communicate biometric data
  • Verbal and text virtual check-ins made through patient portals and messaging apps.[2]

Telehealth can be administered by a range of clinicians, including physicians, nurse practitioners, physician assistants, clinical nurse specialists and psychologists.

Economic pressure mounting

Physician offices and hospitals have been slammed economically by sharp drops in office visits and elective procedures as a result of the pandemic. Although volume has begun to recover, the American Hospital Association is predicting hospitals and health systems could still lose $120.5 billion between July 2020 and the end of the year, or about $20 billion a month.[3] Primary care doctors, meanwhile, may lose approximately $15 billion in 2020.[4]

Permanent changes sought

At the outset of the pandemic, statutes preventing expanded access to telehealth for Medicare beneficiaries were waived by Congress as part of the declaration of a public health emergency. The temporary move allowed a wider range of providers to deliver more telehealth services with a greater variety of technology and without geographic or originating site limitations. This flexibility helped accelerate the expansion of telehealth across the care continuum, with over nine million Medicare beneficiaries participating from mid-March through mid-June, according to internal Centers for Medicare and Medicaid Services (CMS) analysis.[5]

Although the initial telehealth waivers were initially set to expire on July 25, 2020, the U.S. Department of Health and Human Services (HHS) extended the federal public health emergency on July 24 through October 23, 2020, thus ensuring continued telehealth coverage through the ongoing public emergency. This waiver must be renewed every 90 days.[6]

Separately, the CMS 2021 Physician Fee Schedule Draft has proposed nine new telehealth CPT codes. The agency also has developed a new Category 3 for codes that will be covered during the COVID-19 emergency only. This category contains approximately 50 codes created during the COVID-19 pandemic, as well as 13 new codes and other changes.[7] Several telehealth bills likewise have been introduced to help expand the service and ensure telehealth regulations remain intact beyond the pandemic.[8]

Commercial, Medicaid payer confusion

The increased statutory flexibility has made it easier to be reimbursed for Medicare telehealth services. But at least for now, inconsistent and conflicting policies across the commercial landscape have created major payment hurtles for some providers. Although many insurance companies have asserted that, like Medicare, they will reimbursement at 100% of the in-person rate for a range of virtual visits, the reality is far less straightforward.

Clinicians say some insurance companies are unable to provide updated information about telehealth payment policies and much uncertainty exists about what companies will pay for and what they won’t. Medicaid reimbursement, meanwhile, varies from state to state, with telehealth payment policies clearly defined in some states but not in others.

Revenue Cycle safeguards

Regardless of the payer, providers should make a point to include all pertinent information on telehealth claims to limit the risk of denials. Specifically, claims should incorporate:

  • Date, time and location of service
  • Appropriate use of GT (telehealth) modifiers
  • Emergency room or outpatient consultation
  • Recommendations and scheduled follow-ups
  • Type of technology used
  • Proof of patient consent with systems that are not privacy protected (e.g. Skype)

Providers also should conduct ongoing audits to be sure telehealth claims are being coded, documented and filed accurately. Close monitoring of, and communications with, payers of all types likewise are important to maintain an up-to-date understanding of telehealth policies.

“Consistent monitoring of telehealth CARC AND RARC reason codes from the insurance carrier will help you to identify what rejections the payers are applying to your telehealth services,” Low said.

The new normal

Most observers expect the waivers granted for Medicare telehealth will be made permanent and that commercial payment policies eventually will become more coherent and consistent. Assuming providers remain vigilant about reimbursement policies, the telehealth wave unleashed by COVID-19 ultimately could support a new paradigm for providing health-quality, cost-efficient care, not only for outpatient services but inpatient and remote patient monitoring as well.

ParaRev can help

Staying abreast of the latest coding directives regarding telehealth reimbursement and denials can be a challenge. This is especially true when coverage varies between government and commercial payers and from state to state. ParaRev has a large footprint across the U.S. Our experts have a thorough knowledge of each state’s requirements and can help you with comprehensive revenue cycle services to support accurate coding, clean claims and timely and appropriate reimbursement. Contact us today to learn more about the many ways we can help your organization.

  1. Heather Landi, “More than 300 organization, physician groups push Congress to take action on telehealth policies,” Fierce Healthcare, June, 30, 2020.
  2. AMA Telehealth quick guide,” American Medical Association, updated July 6, 2020.
  3. Robert King, “AHA: Hospitals could lose $20B a month for the rest of 2020 due to COVID-19 impact,” Fierce Healthcare, June 30, 2020.
  4. Robert King, “Study: Primary care practices could lose $15B in 2020 due to COVID-19,” Fierce Healthcare, June 26, 2020.
  5. Seema Verma, “Early Impact of CMS Expansion of Medicare Telehealth During COVID-19,” Health Affairs, July 15, 2020.
  6. Renewal of Determination that a Public Health Emergency Exists,” Kaiser Family Foundation, July 1, 2017.
  7. Eric Wicklund, “How CMS Changes, Trump’s Executive Order Affect Telehealth Coverage,” mHEALTH INTELLIGENCE, August 6, 2020.
  8. Eric Wicklund, “The COVID-19 Telehealth Expansion Bills Are Starting to Pile Up,,” mHEALTH INTELLIGENCE, July 31, 2020.

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3 Strategies for Reducing Non-clinical Healthcare Spending Waste

November 20, 2019

Jon Giuliani
Vice President of Operations

Waste in the U.S. healthcare system has decreased slightly over the past eight years, but it still remains an enormous problem that consumes 25% of all healthcare dollars, a new study has found.[1]

Published in the Journal of the American Medical Association (JAMA) in October, the study estimated the full amount of healthcare waste at between $760 billion and $935 billion annually, or roughly one-quarter of all healthcare expenditures.[2] The JAMA report was produced from analysis of peer-reviewed publications, government reports and unpublished or non-commercial reports.

Six domains

While the annual percentage of waste has fallen from an estimated 30% in 2011, unnecessary spending continues to occur in a wide variety of areas. The JAMA study estimated the range of wasted expenditures across six domains:[3]

DomainWasted Expenditures
Pricing failure$230.7 – $240.5 billion
Fraud and abuse$58.5 – $83.9 billion
Administrative complexity$265.6 billion
Failure of care delivery$102.4 – $165.7 billion
Failure of care coordination$27.2 – $78.2 billion
Overtreatment or low-value care$75.7 – $101.2 billion

Zeroing in on non-clinical waste

Within each domain, waste can manifest in a variety of ways, according to the JAMA article. Among the three non-clinical areas identified in the study:

  • Pricing failure can result when prices substantially deviate from ranges expected in a well-function marketplace wherein prices reflect the costs of production plus a fair profit. As an example, the study noted U.S. prices for diagnostic procedures such as MRI and CT scans are several times more than identical procedures in other countries due to a lack of transparency and the absence of competitive markets. The study incorporated research that focused on four areas of pricing: medication pricing, payer-based health services pricing, laboratory-based pricing and ambulatory pricing. The estimated total savings from interventions that address pricing failure range from $81.4 billion to $91.2 billion.[4]
  • Fraud and abuse determinations were focused primarily on Medicare services. Despite the scope of the problem, the Medicare Fee-for-Service Recovery Audit Program has made significant progress in reducing fraud, waste and abuse since the initiative was launched in 2009. According to the Centers for Medicare and Medicaid Services (CMS), more than $10 billion has been recouped for Medicare over the life of the program.[5] The study estimated that $22.8 billion – $30.8 billion could be saved in this category.[6]
  • Administrative complexity waste stems in part from the fragmented nature of healthcare and result from inefficient or misguided rules established by government agencies, accreditation organizations, payers and others. These requirements can include payer rules that consume limited physician time in needlessly complex billing procedures. In addition, responding to lengthy Medicare Recovery Audit Contractor (RAC) audits can require significant provider resources.

Third-party partnerships

Healthcare organizations can enlist external expertise to help reduce waste associated with pricing, fraud and abuse monitoring, and administrative complexity. ParaRev understands the convergence of forces at work in today’s market and the tools providers need to respond effectively. That’s why we’ve assembled a sophisticated array of services and technologies that collectively deliver the capabilities your organization needs to cut waste and flourish in the current marketplace.

  • Rational pricing

For hospitals and health systems, a solid financial footing requires the development of a comprehensive, market-based pricing strategy built around cost, reimbursement and peer pricing data. To help you create a new pricing model, ParaRev will review your current transaction data across all revenue streams to develop a complete market position summary.

Next, we’ll assess rates charged for equivalent services by each member of your designated provider peer group. From these comparisons, you’ll be able to see exactly how your pricing lines up with specific competitors to quickly identify opportunities for increasing prices while remaining within group norms. You’ll also be able to flag any instances in which your organization is the high-priced outlier.

The net result of this effort is improved profitability through the creation of a detailed and empirically based pricing model. The model ensures you’re aligned with peer group averages while positioning you to capitalize on opportunities for optimized returns on below-market-priced items and services.

  • Strengthening revenue integrity to reduce waste

Although rational pricing is essential for competitive positioning and waste reduction, a similarly refined approach to revenue cycle management is necessary to ensure an organization’s financial foundation is sound.

HFRI’s revenue integrity program is a comprehensive service that complements our pricing suite by helping ensure critical elements of the revenue cycle – coding, charge capture and claims management – are executed correctly and consistently. The objective is to reduce the administrative complexity of coding and billing, along with attendant waste, while ensuring optimal collections.

The process involves a detailed chargemaster review, onsite audits, retrospective claims analysis and automated claim audit tools to identify compliance and charge capture problems. We can also help you effectively manage RAC audits and other regulatory actions to help ensure you aren’t compelled to commit inordinate amounts of resources to the task.

  • Decreasing administrative complexity through AR recovery and resolution

Although 90%[7] of denials are preventable, 65%[8] of are never corrected or resubmitted for payment. This is largely due to the labor-intensive complexity associated with working denials. ParaRev can help you reduce this burden and collect more revenue with scalable, client-specific accounts receivable (AR) resolution and recovery solutions. These services allow hospitals to systematically address problem claims across the full AR spectrum to cut compliance risk and optimize collections. Through our proprietary, intelligent automation and powerful process engineering, we’re also able to resolve all claims, regardless of size or age. Denial management is handled through the identification and categorization of toot causes, with causes ranging from contractual, registration and clinical issues to coding, coverage and utilization denial triggers. Working from category-specific, prioritized work queues, our remediation specialists expedite rework and secure resolution for both low- and high-value claims much more quickly. Our process also helps identify reoccurring problem areas to prevent denials from occurring in the first place.

A comprehensive solution

Cutting systematic waste in the areas of pricing and administrative complexity while reducing the risk of costly fraud, waste and abuse audits requires an approach grounded in empirical evidence and supported by a capable staff and advanced technologies.

ParaRev’s suite of services can help you significantly refine your pricing, coding, AR recovery and resolution, and denial management processes. The result is improved revenue capture, less waste, reduced compliance risk and better margins. Contact us today to learn more about how we can help your organization cut waste across a range of areas.

  1. Waste in the US Health Care System Estimated Costs and Potential for Savings,” William H., MD Shrank, MD, MSHS; Teresa L. Rogstad, MPH; Natasha Parekh, MD, MS. JAMA. Oct. 2019.
  2. Ibid
  3. Ibid
  4. Ibid
  5. Recovery Audits: Improvements to Protect Taxpayer Dollars and put Patients over Paperwork,” Seema Verma, Administrator, Centers for Medicare & Medicaid Services. May 2, 2019.
  6. Ibid
  7. Morgan Haines, “An ounce of prevention pays off: 90% of denials are preventable,” Advisory Board. Dec. 11, 2014.
  8. Optimizing the Revenue Cycle Requires a Financially Integrated Network,” HFMA. July 7, 2015.

Overcome the challenges of hospital pricing and revenue cycle management for improved revenue capture and better margins. Download our whitepaper to discover 3 ways to accelerate your financial transformation!

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EHRs Underperforming on RCM

November 5, 2019

Jon Giuliani
Vice President of Operations

With the majority of hospitals and health systems struggling to achieve the full potential of their electronic health systems (EHR), many organizations are turning to outsource companies and other vendors to improve revenue cycle performance, a new survey shows.

More than 60% of healthcare executives believe the challenges associated with EHR revenue cycle management (RCM) outweighed the benefits,[1] according to analysis conducted by Navigant based on a survey done by the Healthcare Financial Management Association (HFMA). A total of 108 hospital and health system chief financial officers and revenue cycle executives responded to the survey.[2]

Unmet expectations

The survey underscores providers’ ongoing disappointment with EHR performance and the actions they’re taking to overcome those shortcomings. Historically, EHR solutions have frequently failed to deliver key RCM capabilities.

For example, most systems typically do not integrate with practice management systems to facilitate effective charge capture.[3] Ineffective charge capture can result in a significant amount of money being left on the table due to under-coding, or an increased compliance risk because of over-coding.

“It was anticipated that EHRs would be the main driver of broad performance improvement, but that has not occurred in many cases,” said Timothy Kinney, managing director of Navigant.[4]

“Instead, providers are now taking other steps, including looking outside their organizations to collaborate with external entities and leveraging advanced technology solutions, and they’re seeing successes.”

According to the survey, 46% of respondents said they were collaborating with external organizations, including outsourcing and vendor partnerships, to decrease revenue cycle costs and increase economies of scale.[5] At the same time, the survey also found that spending for staff training, business intelligence/analytics and coding all declined in 2019.

So, what does this mean for providers?

With less money being spent for training and analytics, providers must look to establish new alliances with partners that can deliver the cost-effective expertise needed to supplement a health system’s revenue cycle management resources.

Areas where outside partners can provide additional value include:

  • Creation of a market-based pricing strategy
    For hospitals and health systems, a solid financial footing begins with the development of a comprehensive, market-based pricing strategy built around cost, reimbursement and peer pricing data. Most hospitals don’t have the resources to conduct in-depth competitive pricing analysis. ParaRev has the expertise to create a detailed and empirically based pricing model to ensure you’re aligned with peer group averages and simultaneously positioned to capitalize on opportunities for maximizing returns on below-market-priced items and services.
  • Implementation of a revenue integrity program
    It’s vital that hospitals and healthcare systems ensure critical elements of the revenue cycle – coding, charge capture and claims management – are executed correctly and consistently. Charge master reviews can uncover where you may be either losing reimbursement or be at risk for compliance issues. On-site audits by an external partner can help spot opportunities for increased reimbursement, improved charge accuracy, more effective compliance and denial reductions. A retrospective claims analysis will compare the claim against the supporting documentation and target inconsistencies that can lead to reduced reimbursement.
  • Accounts Receivable (AR) recovery and resolution
    Hospitals often don’t have the resources to work aged and/or small balance claims to recover everything they are owed from insurance claims that otherwise would have been written off. While the administrative costs of reworking denials approach $9 billion annually,[6] only about 35% of payer rejections are ever reworked and resubmitted.[7] Partnering with a qualified third-party vendor that possesses the technology and expertise required to help hospitals isolate, identify and remediate issues that result in unresolved claims can drastically improve margins and increase cash.
  • Robotic Process automation (RPA)
    Significantly, the HFMA survey found that 15% of health system executives said their organizations are now targeting RPA to improve revenue cycle management. That’s up from zero in 2018.[8] “New technologies leveraging RPA, artificial intelligence, and machine learning have unlocked significant opportunities to reach previously unattainable levels of revenue cycle performance,” said Kent Ritter, director with Navigant.[9]Vendors that have already implemented RPA as well as intelligent automation can provide a more robust and powerful process for quickly and more effectively handing outstanding AR.

ParaRev can help

Armed with this data, ParaRev pricing experts work alongside the hospital’s financial management team to establish specific pricing targets and timelines based on the opportunities presented. These calculations will also take into account contractual reimbursement rates to ensure the new prices are consistent with payer policies.

Likewise, ParaRev can help develop effective strategies for areas or services that require pricing sensitivity. For example, an organization may want to keep prices at, near or even below cost for some services to remain competitive with independent, free-standing facilities.

Importantly, the pricing developed through ParaRev’s rational pricing model is competitive with peer pricing and therefore both defensible and supportive of an effective consumer-facing transparency strategy.

A comprehensive solution

ParaRev understands the pressures hospitals face today and the tools providers need to respond effectively. That’s why we’ve assembled a sophisticated array of services and technologies, including robotic process automation (RPA), that collectively deliver the capabilities your revenue cycle needs to flourish in the current marketplace.

From optimized pricing through peer analysis to comprehensive revenue cycle performance audits and technology-driven denial management and recovery, ParaRev’s services – whether accessed ala carte or as a single solution – give you the ability to perfect pricing strategies while ensuring the highest level of revenue cycle performance.

For example, ParaRev’s scalable, client-specific accounts receivable resolution and recovery solutions allow hospitals to systematically address problem claims across the full AR spectrum. Through our proprietary, intelligent automation and powerful process engineering, we’re able to resolve all claims, regardless of size or age.

Utilization of our software, the PARA Data Editor (PDE) will also provide an automated claim audit tool to identify charge capture problems, such as observation cases billed without evaluation and management (E&M) codes or chemotherapy administration charges that don’t include chemotherapy drugs on the same claim.

Meeting the challenges of hospital pricing and revenue cycle management requires systematic approaches grounded in empirical evidence and a capable staff implementing proven solutions.

ParaRev’s suite of services can help you significantly refine your pricing, coding, AR recovery and resolution, and denial management processes. The result is improved revenue capture and better margins. Contact us today to learn more about how we can help your organization accelerate its financial transformation.

  1. EHRs, Consumer Self-Pay Remain Providers’ Top Revenue Cycle Challenges,” 2019 Navigant/HFMA Revenue Cycle Trends Survey, Sept. 25, 2019.
  2. Ibid
  3. Jacqueline LaPointe, “Hospitals Looking Beyond EHR to Improve Revenue Cycle Performance,” RevCycle Intelligence, Sept. 25, 2019.
  4. Revenue Cycle Technology Trends,” Navigant/HFMA, September 2019.
  5. Ibid.
  6. Philip Betbeze, “Claims Appeals Cost Hospitals Up to $8.6B Annually,” HealthLeaders, June 26, 2017.
  7. Chris Wyatt, “Optimizing the Revenue Cycle Requires a Financially Integrated Network,” HFMA, July 7, 2015.
  8. EHRs, Consumer Self-Pay Remain Providers’ Top Revenue Cycle Challenges,” 019 Navigant/HFMA Revenue Cycle Trends Survey, Sept. 25, 2019.
  9. Revenue Cycle Technology Trends,” Navigant/HFMA, September 2019.

Overcome the challenges of hospital pricing and revenue cycle management for improved revenue capture and better margins. Download our whitepaper to discover 3 ways to accelerate your financial transformation!

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Reducing Financial Risk Associated with Major EHR and Software Implementations

April 25, 2019

Jon Giuliani
Vice President of Operations

Like costly home improvement projects gone awry, electronic health record (EHR) and revenue cycle management software implementations don’t always pan out as intended for hospitals and health systems. But with the right tools and proper planning, potential issues can be minimized.

Several troubled EHR or revenue cycle software installations have recently underscored the enormous financial risks hospitals face when deploying information systems that generate mission-critical claims and billing data.

The costly missteps highlight the importance of adopting a two-prong approach for handling accounts receivable (AR) during and after a system conversion. By assigning internal staff with just new system billing activities, provider organizations allow in-house personnel to more quickly develop the skills required to submit claims in an accurate and timely manner.

Legacy accounts, meanwhile, can be outsourced to a qualified, third-party AR recovery and resolution vendor that specializes in AR conversion projects. This approach not only reduces the burden on internal staff, but also helps ensure aging denials will be worked thoroughly and consistently to resolution.

AR Financial Issues

Hospitals can easily encounter financial challenges if major problems surround the implementation of systems that collect not only clinical information but billing and financial data as well. Consider these recent situations:

  • Glen Falls Hospital, in Glen Falls, New York, lost $38 million in 2017 as the direct result of problems surrounding an EHR deployed in August 2016. The new system replaced several legacy EHR platforms.[1]
  • The former management company of Tulare Regional Medical Center in Tulare, California, cited problems with the hospital’s EHR implementation as partly responsible for ongoing cashflow problems that led the medical center to file for bankruptcy in 2017.[2]
  • An EHR implemented at Western Missouri Medical Center in Warrensburg, Missouri, in 2016 “created a multitude of issues,” including the inability to bill patients in a timely manner. The hospital hired a third-party firm to help overcome its billing problems in 2018 and said it would likely write off several hundred thousand dollars in aging, unsubmitted patient bills.[3]
  • In Tennessee, Vanderbilt University Medical Center said an EHR implementation “put pressure on clinical volumes in the post-live period” that contributed to a $66 million reduction in operating income in fiscal 2018.[4]
  • Agnesian Healthcare Inc. in Wisconsin sued an EHR vendor in 2017, alleging the company’s scheduling, billing and claims software was responsible for “pervasive errors” that led to more than $16 million in losses.[5]

Reducing risk

The success of a major IT implementation obviously is contingent on a multitude of factors, some of which may be beyond the control of the hospital. Nonetheless, hospitals can take steps to reduce their exposure by tasking a third-party with legacy AR accounts ahead of the deployment.

ParaRev specializes in legacy AR recovery and resolution. HFRI, a leader in accounts receivable recovery and resolution, works as a virtual extension of your hospital central billing office to help you resolve and collect more of your insurance accounts receivable faster and improves operating margins through a seamless and collaborative partnership with your internal team.

ParaRev utilizes proprietary intelligent automation and staff specialization to efficiently process all claims regardless of size or age. Clients can gain a 25% improvement in resolution cycle time and cash recovery rates that often exceed 75% on problematic AR claims — double the performance of most legacy AR management vendors.

In addition to our resolution capabilities, ParaRev also can provide denial management assistance by conducting root cause analysis and recommending process improvements to help decrease aged and denied claims going forward. Importantly, ParaRev is HITRUST CSF-certified to help ensure the highest levels of protected health information (PHI) security and compliance.

Hospitals and health systems need to do whatever is necessary to reduce financial risk ahead of major EHR or revenue cycle system implementation projects. By partnering with ParaRev for AR conversion projects, you’ll be able to focus on the new deployment, confident in the fact that legacy AR accounts will be resolved fully and effectively.

  1. Kate Monica, “Billing Problems Caused By Cerner EHR Costs NY Hospital $38M,” EHR Intelligence, March 18, 2019.
  2. Kate Monica, “Cerner EHR Partly Blamed for Hospital Billing Issues, Bankruptcy,,” EHR Intelligence, April 20, 2018.
  3. Kate Monica, “Cerner Implementation at MO Hospital Causing Billing Problems,,” EHR Intelligence, Feb. 28, 2018.
  4. Jacqueline LaPointe, “VUMC Sees Operating Income Decrease After EHR Implementation, RevCycle Intelligence, May 30, 2018.
  5. Kate Monica, “WI Health System Suing Cerner for $16M for Faulty Software,” EHR Intelligence, Sept. 25, 2017.

Protect your cash flow and reduce AR risk throughout your EHR transition. Learn how by downloading our whitepaper.

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