Billing and Collections
Revenue cycle automation helps health systems regain financial footing during COVID-19 and beyond
September 2, 2022
4:10 pm
Healthcare organizations are learning to embrace revenue cycle automation in order to better navigate staffing challenges and try to reduce administrative costs.
“There’s a clear case for why you should be automating,” said Jamie Davis, executive director of revenue cycle management at Banner Health in Phoenix. “The more you react to change with human resources, the more you’re going to be hamstrung when you experience volatility in your volume and other disruptions.”
Banner Health began its automation journey many years ago because it needed a way to consolidate medical records into a single EHR as the system grew. Davis said she knew opportunities to automate the revenue cycle also existed, but it wasn’t until 2020 that the ROI became clear.
“When we started testing for COVID-19 and providing vaccines, the sheer volumes we experienced were so overwhelming,” she said. “We were doing testing before CPT codes were available. We had tens of thousands of backlogged claims by the time the medical codes were announced.”
There simply weren’t enough staff to dig through this backlog. As a result, Banner Health’s revenue cycle-specific IT team designed a bot to automatically find the unbilled visits, assign the appropriate CPT and ICD-10-CM codes and bill them to the payer.
Today, Banner Health uses 25 bots that help manage 90 million records. These bots complete multiple tasks, including entering and updating insurance information, running insurance eligibility and capturing charges.
More moves into automation are expected. Fifty percent of U.S. healthcare providers will invest in robotic process automation (RPA) in the next three years, according to a recent survey conducted by Gartner, Inc. The primary reason? To optimize costs and scarce resources.
Revenue cycle automation continues to gain traction as healthcare organizations struggle to do more with less, said Prashant Karamchandani, revenue cycle director at The Chartis Group.
“The days of going to your boss and saying, ‘I need 15 more people to work these accounts’ are over,” he said. “I don’t know where you’re going to find 15 more people.”
Big savings
Over the past three years, RPA has saved Banner about 1.73 million hours of total work, equating to almost 800 full-time employees, Davis said.
The majority of Banner Health’s automation strategy centers on tasks for which staff simply don’t have time, she said. For example, Banner Health uses machine learning to monitor whether payers pay claims correctly after contract renegotiations.
“We watched our variance balances week over week to see how they were reacting to the bot,” Davis said. “In two months, we saw a $9 million decrease in erroneous adjustments and debit balances on the acute care side.”
For examples of robotics in action, read about how Allina Health, Henry Ford Health, Main Line Health and Sanford Health are using automation.
Automation also helps mitigate productivity loss when staff turnover occurs or when people are out sick.
“Our bots absolutely help offset those staff shortages,” Davis said.
Using RPA has also helped shift human resources to higher complexity work, according to Davis.
“Instead of entering insurance information, staff can handle technical-based denials,” Davis said. “Moving those employees from a low- or no-return function to a net-return function yields a soft revenue pick up.”
An auspicious outlook
Karamchandani doesn’t see any negatives to adopting RPA.
“I do not think there are downsides to automation if it is done both strategically and in the context of building a program and infrastructure around it,” Karamchandani said. “If you prematurely turn to automation without the proper setup and, most importantly, some level of process optimization, you risk automating a bad process or task which will have a negative effect. Taking the extra time, which does not need to be long, to properly strategize, plan and execute the deployment will go a long way.”
Steve Lutfy, senior managing director at FTI Consulting, agrees that using more automation seems inevitable.
“Automation is the wave of the future,” Lutfy said. “In the next few years, all hospitals will be using revenue cycle automation. We can’t just keep hiring people. That’s not the answer.”
Healthcare leaders share lessons learned and look to the future
When asked if they had new insights on revenue cycle automation, healthcare finance professionals provided these tips.
Choose wisely in terms of where to begin. “We thought we had standardized processes, but the automation showed that wasn’t the case,” said Jamie Davis, executive director of revenue cycle management for Banner Health. “Our IT team is leveraging process mining in health plan data, and we hope that will, in turn, help our revenue cycle find out where to automate based on process insight versus our gut instinct.”
Banner Health also uses an intake and governance process for all automation requests. It uses a hierarchy to determine prioritization with compliance-driven processes receiving precedence.
Decide whether to buy or build. “We always ask ourselves, ‘Are we trying to create an automation product, or are we just building something internally to improve our processes?’ A lot of times, you can’t build it as quickly and manage it as efficiently as a third part from a cost perspective,” Davis said.
If the health system is going to partner with an external vendor, make sure both parties agree on how you’ll determine ROI, said Prashant Karamchandani, revenue cycle director at The Chartis Group.
“Make sure you truly understand the staffing impacts,” he said. For example, will it replace existing staff or prevent you from having to rehire when staff leave? Will it improve efficiency and quality?
Also understand the true cost of implementation, said Steve Lutfy, senior managing director with FTI Consulting. For example, if you’re automating claim status, will the vendor charge you per query? If so, how often will you query? Ideally, health systems should try to negotiate a fixed cost per month for unlimited queries, he said.
Don’t overlook change management. “If you talk about your vision and strategy — and why automation is needed — it will help you ease peoples’ anxiety,” Karamchandani said. “Have this conversation upfront. Let them know their jobs are secure. Instead of hiring more people, we’re going to leverage technology to do things differently, better and faster.”
The outlook for using automation
Given the expected growth in robotic process automation, health system executives look at what could be coming next.
Allina Health
The health system’s five-year plan is to become fully automated. “This doesn’t mean no people,” said Motti Edelstein, vice president of revenue cycle. “It means you can never take your foot off the pedal. You must be on a path of continuous improvement.” Continuous improvement means automating tasks like correcting errors and resubmitting claims to the payer, checking patient demographics, validating medical necessity and identifying errors in charity care applications.
Banner Health
The health system hopes to automate payer data consumption, exchange, and interpretation. A lot of insurance information comes out in narrative policy bulletins, and the system aims to include this information in its contract management system.
Henry Ford Health
The health system hopes to use payer data more effectively to create specialized work queues, said Steve Hathaway, chief revenue officer at Henry Ford. For example, if a payer denies a claim, automation can ingest information from the payer and route the claim to someone who is well versed on how to address that specific denial. “It’s enormously complicated work that pays very rich dividends,” he said.
