As legacy revenue cycle systems struggle to keep up with constant regulatory changes, many hospitals are turning to next generation revenue cycle systems out of necessity, but experts caution to think before jumping.
Reform and regulatory changes have had a dramatic impact on healthcare providers and revenue cycles, said Elaine Remmlinger, senior partner at management consulting firm Kurt Salmon, during a revenue cycle presentation at HIMSS14 in February. HIMSS is the parent company of Healthcare Finance News.
“Fundamental shifts in healthcare delivery and payment (are) dramatically affecting how organizations do business and the revenue cycle environment must adapt to the shift from fee-for-service to value-based payment models,” said Remmlinger. “Shrinking reimbursement, narrowing margins, changes in service demand are all requiring providers to be more efficient and demands for data (are) soaring.”
John Boland, managing director at Navigant, agreed with Remmlinger’s assessment, and went one further, predicting further scrutiny of allowable reimbursements.
“I think in the revenue cycle what’s going to happen is the reimbursement of services is likely going to be an area where it’s going to either be capped at a certain level or there might even be further declines in reimbursement of services and doctors and hospitals,” said Boland.
Given the reimbursement pressures and other challenges, it may be tempting for organizations to snap up whatever new technology they can find, but those organizations should not make decisions out of panic.
First off, organizations need to do a self-assessment to determine their readiness for a next generation revenue cycle system, said Sandra Wolfskill, healthcare finance policy director for revenue cycle at the Healthcare Financial Management Association. Often, she said, an organization’s readiness for a next generation revenue cycle system depends on how advanced the organization is. Those that have already made heavy investments in technology, for instance, may be better positioned to move into a next generation system than those who have not.
And before organizations attempt a transition to a new system, they must establish a common vision for how they want to serve patients (clinically and operationally) in the future, said Craig Kappel, partner, healthcare advisory services, Ernst & Young.
“It’s naive to believe that the simple purchase of new sophisticated state-of-the-art technology will lead any organization to where they want to go,” said Kappel.