Major Challenges in Hospital Revenue Management

Collecting payments before services are received is a major part of the revenue cycle and the one where issues can happen quite often. The tricky part of this stage is that many patients can't afford or are not willing to pay the whole amount in advance, which creates a need to manage debts.

Fremont, CA: Finance management that is consistent and organized is critical for any hospital or medical organization. Incoming payments, claims processing and reimbursement, margins, and other transactions are all part of the daily operations of a hospital, and executives are constantly looking for ways to improve this process. Revenue cycle management is a complicated but manageable process that can be improved with benchmarking and automation.

What are the key hospital revenue cycle management challenges?

Payment Collection and Billing

Collecting payments before services are received is a major part of the revenue cycle and the one where issues can happen quite often. The tricky part of this stage is that many patients can't afford or are not willing to pay the whole amount in advance, which creates a need to manage debts.

In fact, around 48 percent of patients are not able to pay their entire medical bill upfront. At the same time, clinicians try not to press patients to pay upfront, which could cause them to migrate to another health provider.

One way to address the issue of patients' inability to pay upfront is to provide them with price estimates. Furthermore, 38 percent of patients said that having a payment plan option would improve their chances of paying bills on time.

Lack of Staff Training and Education

The never-ending disparity between the front-end and back-end parts of the cycle is one of the most difficult challenges in hospital revenue cycle management. The patient and, in some cases, medical staff are involved in the front-end process, which involves collecting patient data and receiving payment.

The issue is that the people in charge of the initial stages of the revenue cycle do not have a comprehensive understanding of what the process looks like later on, on the back end when the payment needs to be converted into an insurance claim.