Top 4 Drivers Boosting the Adoption of Revenue Cycle Management (RCM) Solutions

While larger healthcare systems, small practices, and hospitals are known for treating patients and saving lives, every healthcare institution requires successful policies and processes for staying financially strong. When you visit a doctor’s clinic, it seems rather simple. You show up, register your name, describe your issues, leave, and get a bill on average 10 to 15 days later. But what you don’t see is the complex process taking place behind the scenes. This is where revenue cycle management (RCM) or medical billing comes in! It encompasses the collection, management, and identification of patient service revenue. Without this process, healthcare organizations will be incapable of keeping their doors open to treat patients.

As per a recently published report by Fortune Business Insights™, the global market size of revenue cycle management is projected to reach USD 258.1 billion by the end of 2027, with a CAGR of 13%. In 2019, North America held more than 50% share on account of the increasing doctor visits in the U.S. According to a survey by Forbes, an American visits the doctor four times a year, on average. Besides, the rising launch of unique RCM software solutions by renowned companies will also contribute to the regional growth. In January 2020, R1 RCM, for instance, introduced R1 Professional, its latest physician RCM solution to help hospital-owned medical groups and large independent practices in the U.S.

COVID-19 Pandemic: Evolution of Market and Payor Dynamics to Favor Growth

The healthcare sector is gradually realizing the significance of RCM solutions because of the surging revenue losses that occurred amid the COVID-19 pandemic worldwide. That’s why, the urgency and pressure to optimize financial performances has increased exponentially. RCM providers are showcasing high demand due to the rapid evolution of payor and market dynamics, as well as the need to sustain financial strength.

The Council for Affordable Quality Healthcare, Inc. (CAQH), for instance, declared in its February 2021 report that the dental and healthcare industry successfully avoided USD 122 billion in terms of cost by streamlining various administrative processes, such as receiving payments electronically, submitting supplemental information and claims, and obtaining prior authorizations. However, a study conducted by Cognizant mentioned that from March 1 to June 30, 2020, hospitals lost more than USD 50 billion per month because of the pandemic.

Fortune Business Insights™ Presents Top 4 Drivers of the Market for Revenue Cycle Management (RCM):

1. Rising Burden of Claims and Need to Generate More Profit

The process of profit generation becomes very challenging for medical professionals as they spend hefty amounts in billing and collecting than any other industry. RCM solutions help to recover payment efficiently and hence are exhibiting high demand from small healthcare facilities. Several developed and emerging economies are nowadays increasingly adopting these software solutions as they need to eliminate the preventable financial losses associated with reimbursement and claims processing.

Apart from that, payers often deny any surges in claims submitted by patients, thereby creating a tough situation for both the provider and patient. According to a survey by Cognizant, hospitals wrote off 90% more denials in 2017 than in 2011. To manage such complicated situations, RCM solutions are considered to be the necessary operational modules.

2. Rapid Inclination towards Automated Operational Procedures

By digitizing and automating several processes, RCM solutions are aiding in replacing the conventional financial work that was to be done manually. The emergence of robotic process automation, commonly known as machine learning, has resulted in the acceleration of the turn-around time and reduction of human errors. Therefore, a large number of firms across the globe are persistently developing technologically advanced solutions. In January 2020, OnQ, for instance, unveiled its innovative robotic process automation products. They can simplify processes, create efficiencies, and enhance quality of medical billing.

Furthermore, the rising incorporation of artificial intelligence (AI) in RCM solutions would deliver a state-of-the-art business intelligence module. It would contain multiple platforms developed for versatile reports and performance indicators exhibiting a 360-degree view of the process. MedEvolve, Inc., for instance, introduced MedEvolve RCM Workflow, its new solution to help providers optimize and automate cash collection in June 2019. The solution can also reduce cost and increase accountability & staff productivity.

3. Outsourcing of Supplementary Operational Services

Various operations of RCM software solutions are highly resource and time-consuming. Thus, clinicians are focusing more on providing care to their patients by decreasing the bandwidth of resources. To make it easier, some of the intricate financial services, such as claims processing, collection, and billing are being outsourced by healthcare organizations. Outsourcing can lower the need to maintain and hire office infrastructure and adequate internal staff, respectively.

In addition to that, it would eliminate the requirement of billing procedures and office spaces. But, it would aid in receiving timely payments, which is one of the priorities of providers. For instance, the Healthcare Innovation Group published that more than 80% of hospitals in the U.S. considered outsourcing RCM in 2018.

4. Increasing Focus of Healthcare Professionals on Patient Satisfaction

Nowadays, vendors are coming up with novel and comprehensive approaches for deploying enterprise-level integrated platforms. Services, namely, financial coverage, cost management, and appointment management are being integrated into a single platform for increasing efficiency in clinics and hospitals. These RCM solutions are assisting patients to get benefits from personalized payment options and make informed financial decisions.

In March 2021, for instance, VitalAxis and EmeritusDX joined hands to improve patient care. EmeritusDX will manage clinical data through the laboratory workflow of report distribution, structured diagnosis, and electronic orders. The company is also planning to implement the former’s RCM software solution to reduce the financial burden on patients and healthcare systems.

Will Electronic Health Records Transform the RCM Industry in Future?

The introduction of electronic health records (EHR) is expected to revolutionize healthcare organizations in terms of reporting, analyzing, and gathering patient data. Also, the rising number of patient admissions in clinics and hospitals globally is expected to surge the adoption of RCM solutions to reduce complexity. As per a survey by CDC, every year, over 130 million emergency room visits take place in the U.S. However, small clinics and physicians’ offices lack the interface infrastructure required for RCM installation owing to budget constraints. It may hinder growth in the near future.