Executive Summary
With rising health care costs, increasing patient volumes, and updated process, revenue cycle management is becoming increasingly important to hospitals trying to maximize reimbursements. However, improving revenue cycle management is challenging for organizations due to numerous industry complexities. These complexities include ever changing governmental policies and socioeconomic changes in the population. The most current policy changing hospitals payment system is the Affordable Health Care Act in an attempt to control health care spending. Before strategies can be developed to improve revenue cycle management, one must understand the background of the industry. While improvements to the revenue cycle are certain
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Demographic variants of the health care population include an aging population, declining birthrates, population migration and immigration, and epidemics. In 2010 life expectancy was 78.7 years, an increase of 11% since 1970 (Kaiser 2014). Furthermore the volume of chronic illnesses has increased in the United States. The leading chronic diseases and conditions include heart disease, stroke, cancer, diabetes, and obesity. The rate of obesity fueled by unhealthy diets and inadequate physical activity has rippled through the population leading to secondary chronic diseases. Chronic obesity has more than doubled in the adult population over past twenty years and more than tripled in children between ages of 12 and 19. According to the Centers for Disease Control and Prevention, approximately 86 percent of United States health care spending was for treatment of chronic diseases. The socioeconomic fluctuations and the recent political rulings only increase the health care …show more content…
Of the almost three trillion spent in health care annually, $400 billion goes towards processing claims process or bad debt write offs partially because of outdated or inefficient processes (McKinsey). Health care organizations can fail to realize as much as 3 to 5 percent in net revenue due to a lack of effective internal controls and failure to migrate financial, regulatory, and operational risks (Berger 2008). As we now know, hospitals struggle to improve these deficiencies given the constantly fluctuating health policies and demographics of the population, on top of contractual barriers, and regulations. Performance of the process has become increasingly paramount task and most organizations are currently evaluating three process improvement categories. Popular options or investments include, workflow restructuring, enhanced business intelligence, or simply outsourcing. Nonetheless, amongst the revolution in the health care industry, revenue cycle management performance improvements are necessary for hospitals to maintain positive financial welfare. Revenue cycle management is the administrative process of generating a bill and eventually receiving payment for goods and services. While all industries utilize some type of revenue cycle management, the process is vastly more complex in the health care
Chapter 6 describes revenue determination. Write a 3-4 page paper to include: List and discuss the three payment-determination bases. Explain the difference between a “specific services” payment unit compared to a “bundled services” payment unit. Describe the three major ways that health care providers can control their revenue function. I expect at least 5 secondary sources properly cited and referenced for this paper.
The purpose of financial measurement in healthcare is to provide the community with the services it needs, at a clinically acceptable level of quality, at a publicly responsive level of amenity, at the least possible cost. This is done by providing healthcare finance managers with accounting and finance information to help accomplish the purpose of the organization (Nowicki, 2015). When making accounting decisions about budgeting and inventory control, an understanding of economics, statistics, and operations research is needed. Major Financial Measures
The revenue of the healthcare industry unlike any other depends on the inpatient occupancy or ALOS(average length of stay), the volume of outpatient visits and procedures, the services ordered for the inpatients and outpatient. For CHS the majority of its revenue comes from Managed care and other insurers ( apart from govt. insurance) with 54.5%, after which comes the gover...
In recent times, healthcare organization across the nation are facing unprecedented challenges as they strive to improve the overall quality of care provided to their patient’s population, while improving their organization’s financial performance. Furthermore, uncertainty of new reimbursement models, diminishing reimbursement, and complicated compliance regulations are playing the role of a catalyst for streamlining the Chargemaster process in majority of healthcare organizations.
Revenue cycle is a multidisciplinary approach to reducing the amount in accounts receivable by effectively managing the production payment cycles. The production cycle includes patient seeks care, pre-care, care, and care completed. Then the payment cycle occurs when the medical record is complete.
It would be an awesome day in history if the healthcare industry could mimic restaurant chains business practice of combining quality control, cost control, and innovation. Even though it’s a great gesture from a patient’s perspective, there is no way that healthcare could even come close to such models of restaurant business practices. Why is that? Well, a restaurant is more predictable than any health care sector. First, restaurants are able to plan and coordinate their business practice to meet the needs of their customers. Secondly, they can control inventory and certify quality meals at an affordable price. Additionally, they can predict how many customers will
Over the last several years, the United States has experienced the emergence of countless lifestyle based illnesses. We have seen an increase of inactivity, poor nutrition, an increase of tobacco use, and more frequent alcohol consumption; Americans are living unhealthy lifestyles that are surely factors contributing to the pervasiveness of chronic diseases. Chronic diseases use to be seen as problems that older generations faced, but over the past several years the United States’ working age group has become a main target. For example, Americans are experiencing higher rates of diabetes, and heart disease. Conditions like these only lead to a diminished quality of life, could possibly lead to shorter life spans, disability, and quite possibly in the long run increased health care costs. Businesses are also impacted by an employees lifestyle decisions; absenteeism and presenteeism.
Hospitals recognized the need for the case management model in the mid 1980’s to manage the lengths of stay of hospitalized patients and the treatment plans (Jacob & Cherry, 2007). In 1983, the Medicare prospective payment program was implemented which allowed hospitals to be reimbursed a set payment based on the patient’s diagnosis, or Diagnosis Related Groups (DRG), regardless of what treatment was provided or how long the patient was hospitalized (Jacob & Cherry, 2007). To keep the costs below the diagnosis related payment, hospitals ...
The revenue cycle is known as the process by which healthcare providers receive reimbursement for care provided. Bringing in revenue is necessary for the efficient operation of any healthcare facility. The revenue cycle consist of all the steps involved in patient care starting from bringing in the patient, meeting their needs, and receiving payments for services provided (Gillikin).
When assessing where the industry will go over the next ten years, there is one area that stands out. Government involvement in healthcare has become a major player in how this industry is changing. New regulations are being introduced at a rapid rate and have pushed hospitals into constant change management (Arab Kash, Spaulding, Johnson, & Gamm, 2014).
With consolidation among hospital systems over the last few years there has been a trend toward ways to streamline processes. By having “shared services” such as laundry services, human resources and radiology and diagnostic services it’s possible to lower costs and have common processes. The advent of health care reform and the Affordable Care Act (ACA) with its Information Technology (IT) incentives has led to greater interest in risk management and IT solutions. While there was a decrease in 2012 on outsourcing IT services the finalization by the Supreme Court of the ACA and President Obama’s re-election cemented the need for an IT solution (Kutscher, 2012)
With medical errors increasing the length of stay and cost of care, hospitals are facing even smaller margins. Struggling to turn a profit they only way hospitals can grow is to improve the quality of care and reduce errors. It was not until recent legislation that hospitals were being reimbursed for poor quality of care leading to longer patient stays or further hospital-acquired infections. The recent health care reform legislation, the Patient Protection and Accountable Care Act, has stopped hospitals from receiving reimbursement for readmissions due to error or nosocomial infections. Not only does this act prevent reimbursement for poor quality care, but also hospitals that deliver lower standards of care will not be able to participate in the Medicare and Medicaid programs (Andel et al.,
Obesity has been identified as one of the risk factors affecting directly and indirectly the health outcome of the population. Even though many approaches and programs have been conducted in order to reduce the obesity rate, this health issue is still a big headache and keeps being put on the table. According to the Centers for Disease Control and Prevention (CDC), overweight and obesity rate have been increasing significantly in the past two decades in the United States with more than 35.7% of adults and almost 17% of children and adolescents from 2-19 years olds being obese ("Overweight and obesity," 2013). As Healthy People 2020 indicated, in the period from 1988-1994 to 2009-2010, the age adjusted obesity rate among U.S adults aged 20 and over increased from 22.8% to 35.7%, which means increased by 57% while the obesity rate among children and teenagers from 2 to 19 years old increased from 10% to approximately 17%, witnessing the increase of 69% ("Nutrition, physical activity," 2013). Obesity has impact both on economic and health of the nation. Obesity is the risk factor of serious chronic diseases, including heart disease, stroke, type II diabetes, certain kinds of cancer, and other leading causes of preventable deaths ("Overweight and obesity," 2013). Moreover, obesity continues to be economic burden in terms of medical costs for either public or private payers up to $147 billion per year which increased from 6.5% to 9.1% (Finkelstein et al, 2009). In 2008, medical spending per capita for the obese or obesity related health issues is $1,429 per year, as 42% higher than “those of normal weight” (Finkelstein et al, 2009, p.8).
This system provides annual statics on Medicare payment amounts for institutional providers. A nurse leader can use HCRIS to find other similar institutions with whom to compare reimbursement rates and use this information to make necessary adjustments (“Healthcare Cost Report”, 2016). Lastly, nurse leaders can also use cost-to-charge ratios, volume-based measures, per diem rates, and balanced scorecards to gain better insight of unit reimbursement (Liberty University,
One day there was a talented man named Glen. Glen had a poor excuse for a mustache with long, pale arms and legs. He had a shaggy style of hair and wore socks with flip-flops instead of shoes. Glen woke up every morning and studied birds(mainly crows) and sometimes played around with coding. Although he loved to work, Glen liked nothing more than to sit and play video games all day.