View from the C-suite: AI, automation key to getting, staying ahead of RCM issues

Healthcare executives have big plans for technology in their revenue cycle management operations. Over the next 12 months, AI, machine learning and other RCM automation solutions are a top investment priority. 

The findings are from a survey conducted by the Healthcare Financial Management Association (HFMA) and analyzed by Guidehouse. The researchers received completed questionnaires from 134 hospital CFOs, VPs and other executive-level leaders. 

The respondent pool showed “payer challenges” to be the overall most vexing area of concern affecting RCM. Some 41% said they’re experiencing claims denial rates above 3.1%. Meanwhile staffing shortages continue to thwart operations, including RCM, although 71% are happy with vendor outsourcing as a fix. 

Guidehouse analysts offer a number of observations from the project. Among the most edifying are these five: 

1. Providers are planning to heavily invest in automation, AI and machine learning to address staffing shortages while streamlining operations, improving efficiency and filling gaps.

Research shows AI adoption alone has led to accelerated payment cycles, the report authors write, with payments processed within 40 days versus the standard 90. More: 

‘This trend aligns with broader industry movements, as noted in Guidehouse’s 2023 Digital and Technology Report, which found that providers have increased their digital and IT budgets over the past few years.’

2. As the need continues to grow for effective EHR integration, revenue cycle automation and modernization, provider technology systems have become prime targets for cybercriminals.

Laying the groundwork for a strong cybersecurity posture and risk mitigation program is imperative in today’s healthcare environment, Guidehouse comments. More: 

‘Testing incident response programs by implementing executive security simulations for revenue cycle management and clinical operations in the face of any level of cyber risk is critical to avoid detrimental financial and operational disruptions.’

3. Higher-than-average denial rates indicate internal process breakdowns, documentation issues and payer delay tactics such as requesting additional information. 

Plus, the time and effort needed to research and collect documentation to appeal fatal denials has become unsustainable. More: 

‘The goal should be to achieve a final denial rate of 1% or less; however, staffing shortages impact an organization’s ability to counter the increased level of activity.’

4. Both providers and payers continue to face workforce shortages. 

For providers, being understaffed and experiencing increases in denials is a disastrous mix, the authors point out. “To overcome these compounded complexities, providers need the staff necessary to bullishly manage the entire process—from front-end staff handling patient access to back-end processing and collection.” More: 

‘The struggle to recruit and retain qualified staff members—and the resulting high turnover—is costing organizations in more ways than one: Providers invest significant time and money in training, onboarding and benefits for new employees who often don’t stay long enough for employers to realize a return on investment.’

5. Healthcare organizations seeking to optimize results from RCM automation, AI and machine learning capabilities should take four steps: 

• Assess data and technology governance, cybersecurity and quality.
• Determine whether the application is appropriate for each user’s use case and patient population. 
• Identify metrics for validation, testing, measuring impact and managing expectations. 
• Never lose sight of the human element. 

The full report is available in exchange for contact info.