Finance leaders are battling the rising denial headwinds that threaten to derail the progress healthcare organizations have made toward stabilizing revenues after years of operating in the red. For many, the solution is an optimization of financial clearance and other patient access processes. Doing so, however, is often hampered by staffing and outdated technology limitations that impede efficiencies and increase front-end authorization errors – errors responsible for more than half of all claim denials.
However, as artificial intelligence (AI) and automation embed more deeply into healthcare revenue cycle management (RCM), a new subset of tools has emerged that can accelerate and streamline prior authorization, eligibility and benefits determination, and other back-end financial clearance workflows. Early adopters are reporting numerous benefits, most notably:
- 70%-85% faster eligibility and benefit determination
- 85%-90% improvement in authorization determination time
- 65%-80% less time on authorization initiation
- 85% shorter authorization follow up times.
- 80% faster price estimating.
All of which contribute to increased revenue growth and employee retention, as well as improved overall patient financial experience.
Issues with Financial Clearance
According to one recent survey, more than half of CFOs and financial leaders at U.S. health systems and hospitals reported an increase in claim denials in 2023 due to patient access/registration errors, including eligibility or missing prior authorization, due in large part to staffing, technology, and operational limitations. These front-end RCM issues also contribute to higher net revenue leakage via avoidable write-offs.
Issues with financial clearance processes can also negatively impact patient experience scores, with one survey finding that 93% of patients base provider loyalty on their financial experience. Forty-one percent also indicated dissatisfaction with their overall medical billing experience, most often due to a lack of pricing transparency or certainty.
Part of the problem lies with the chronic shortage of RCM professionals, which has reached critical levels for many healthcare organizations. More than 60% of providers face RCM staff shortages, and nearly half of CFOs and revenue cycle vice presidents from large health systems and physician groups say their labor shortages are severe, with nearly half reporting vacancy rates between 51%-75%.
To address these challenges by eliminating error-prone manual processes from financial clearance, nearly 80% of healthcare organizations responding to one survey were turning to AI and automation. Thanks to its redundant and time-consuming tasks, financial clearance is a prime candidate for automation, particularly in terms of eligibility checks and prior authorizations.
AI-enhanced authorization solutions are quickly becoming an important aspect of RCM for their ability to streamline and expedite steps within the financial clearance process. In particular, these tools can significantly enhance productivity, improve operational efficiencies, and reduce costs while avoiding prior authorization-related denials. Additionally, process improvements can enhance the patient experience by expediting access to necessary services.
Financial clearance processes that are best suited for automation include:
- Real-time verification of eligibility and benefits by simplifying the navigation of payer systems, eliminating inconsistent data, and reducing call volumes.
- Prior authorization determination workflows are streamlined, which minimizes denials and accelerates and optimizes the revenue cycle.
- Prior authorization initiation up to the point of clinical questionnaires accelerates workflows and reduces or eliminates errors and missed steps.
- Retrieval of authorization status updates and reporting allows financial clearance teams to stay current on the status of all authorization requests.
- Good faith cost estimates in support of No Surprises Act compliance reduce administrative burdens while increasing patient satisfaction.
One of the challenges confronting healthcare organizations seeking to automate key aspects of their financial clearance processes is the fragmented front-end automation market. To determine the best technology fit, the evaluation process should include identifying solutions that are scalable based on the organization’s needs, which specialties the solution will support, and which financial clearance processes are best suited for automation. It’s important to also determine how non-automated processes will be managed.
A consultative vendor can support organizations as they work through these considerations, helping them understand existing processes and workflows and providing a technologically agnostic approach to solution design. They can also help identify outsourced service solutions for processes that are not ideal for automation.
Early adopters are reporting measurable ROI from the adoption of front-end automation, with some organizations reporting that daily production volumes have doubled. For one outpatient imaging provider, that meant daily cases processed for its 150 locations increased from 60 to 120 per representative while authorizations were extended from an average of three days out to as many as nine days, contributing to improved care access and reduced volume of rescheduled appointments.
Other providers have credited front-end automation with growing and expanding business without having to increase staff. Further, enhanced scheduling flexibility, such as allowing staff to offer cancellation slots to patients whose later appointments have already been approved. This eliminates wasted time, improves billable time, and grants earlier access to care for patients.
Eliminating Pain Point
The ability of artificial intelligence to address staffing and denial pain points as well as improve overall revenue health has made automation of RCM a priority among healthcare finance leaders. Intelligent automation of financial clearance processes as part of AI/automation strategies has returned high value and rapid ROI, including more accurate financial data, prompt authorization, flexible financial advocacy, and improved price transparency.
Thoughtfully deployed AI-enabled authorization delivers both an optimal patient financial experience and improved overall financial health by accelerating and maximizing the revenue cycle.