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Health system leaders plan to invest in artificial intelligence, automation and managed services to improve revenue cycle performance over the next year, according to a new analysis from Guidehouse.
The results were published in his 2024 Revenue Cycle Management Reportwhich is based on a survey of 134 supplier executives – the majority of them CFOs – by the Health Care Financial Management Association to understand revenue cycle pain points, solutions and investments.
WHAT IS THE IMPACT
The results show that nearly half of healthcare executives reported a net collection performance of 93% or less, representing a significant opportunity to improve performance. Payer challenges represent the largest area of stress, with 41% of executives experiencing denial rates greater than 3.1%. And more than half of executives reported prior authorization as the second-highest area of stress.
Labor shortages in the revenue cycle were cited as the third most significant area of stress, with 90% of executives saying labor issues are further exacerbating operationsExecutives cited consulting and outsourcing as top strategies for overcoming revenue cycle staffing challenges.
Nearly 80% of executives reported using some form of revenue cycle outsourcing, and the majority (71%) are satisfied with their partnerships. Additionally, executives cited automation as the second most important strategy for addressing revenue cycle staffing challenges.
Executives indicated that their top priority for revenue cycle investment over the next 12 months was technology, such as AI, automation and machine learning. Yet nearly 25% of respondents said cybersecurity was a major issue, which is particularly notable given that a wave of ransomware attacks has plagued the healthcare industry in recent months.
Patient access was cited as the second highest investment priority, followed by revenue and clinical integrity, with targeted investments in utilization management/review and denial management.
THE MOST GENERAL TREND
There is $9.8 billion in potential savings through AI-powered automation in the revenue cycle, according to statistics provided by TruBridge, an IT consultant and services provider, at the HFMA Annual Conference in Nashville in June 2023. Nine percent of all claims are denied in error or due to prior authorization denials; 23.9% of denials are due to eligibility issues.
Seventy-five percent of hospitals are working on an AI strategy to address revenue cycle challenges, said Patrick Murphy, CEO of TruBridge and former CFO of a health system in Alabama.
In March, the Congressional Budget Office looked at AI and machine learning in health care, determining that Evidence of the technology’s usefulness is mixedespecially with regard to costs.
The practical application of these technologies is still inconsistent at this nascent stage, CBO He said he would need more empirical evidence before determining the overall effect on things like health care spending.
Jeff Lagasse is editor-in-chief of Healthcare Finance News.
E-mail: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.