The casual observer can be excused for believing that a single government web site represents the extent of healthcare technology. But behind the scenes, the following major technology trends will have a significant impact on the healthcare industry in 2014 and on revenue cycle management (RCM).
- Affordable Care Act (ACA): The blockbuster, politically divisive law, aka Obamacare, potentially could provide healthcare coverage to 30 million Americans, increasing the overall volume in claims and associated payments and remittances. The payment infrastructure is lagging per recent reports, but ACA, through CAQH CORE, has payment benefits addressing standards for reassociating electronic remittance advices (ERAs) and electronic funds transfers (EFTs). With ERAs and EFTs coming via different paths, there is no automated bridge between the ACH data set and the ERA data set. The process becomes even more complex if the healthcare provider receives high volumes of payments; in many cases, reconciliation doesn’t get completed. This will create opportunities for financial institutions and other third-parties to provide reassociation services to providers who don’t have the resources or inclination to perform the task themselves.
- ICD-10 Conversion: October 1, 2014 is the deadline that CMS has set for replacing the ICD-9 code set with the new ICD-10 code sets. This is a major change as the new code set has 68,000 diagnostic codes, compared to over 14,000 in ICD-9. The challenge for healthcare providers is that expanded procedure codes means that legacy coding and billing applications are unable to convert old ICD-9 codes directly into ICD-10 codes. This will necessitate system replacement or major upgrades. Even with new systems in place, anything short of the flawless reconciliation of claims and EOB documents will lead to more rejected claims. With rejected or incorrectly processed claims already consuming an estimated 15 percent of the average provider’s revenues, ICD-10 conversion will likely be a major topic in RCM. This could be a real Y2K for healthcare providers.
- Healthcare Insurance Portability and Accountability Act (HIPAA): The Health Information Technology for Economic and Clinical Health (HITECH) Act directly affects today’s financial institutions and their services for the healthcare sector by modifying and amplifying the existing data privacy and security rules for protected healthcare information under HIPAA. Importantly, the Office for Civil Rights (OCR) will be enforcing the Privacy and Security Rules through voluntary compliance activities, as well as with civil money penalties that far exceed those of the recent past. All of this puts greater pressure on financial institutions and other companies to create their own policies and procedures and demonstrate compliance to manage their potential liability.
- Staff Shortages: It has been well-documented that an aging physician population, combined with the implementation of the ACA, is creating a shortage of physicians. But 67 percent of hospitals are facing a shortage of healthcare IT staff, as well – at a time when they must meet initiatives such as ICD-10 conversion and electronic health records. Staff shortages also extend to RCM. Seventy-seven percent of hospitals have not begun a strategic plan for transforming RCM solutions for known deadlines because of lack of internal experts to do so, according to Black Book. Additionally, 80 percent of CIOs say they do not have the IT staff in-house to transform RCM end-to-end. These staff shortages will drive more providers to explore outsourced RCM services from financial institutions and other third-parties.
- Mobile: Mobile healthcare applications have seen up to a seven-fold increase in adoption in the past year alone. This will certainly increase as healthcare providers continue to electronify their patient medical records and payments and RCM data.
Many of these trends add incremental cost to the processes for healthcare providers. The good news is that RCM efficiencies can streamline payment processing, reduce revenue leakage and keep staffing under budget.