Guidehouse analysis of Healthcare Financial Management Association executive survey reveals payer challenges, prior authorization, workforce, and cybersecurity as top areas of stress
WASHINGTON, Sept. 9, 2024 /PRNewswire/ -- Health system executives plan to invest in artificial intelligence (AI), automation, and managed services to improve revenue cycle performance over the next year, according to a Guidehouse analysis.
Analysis findings were published in Guidehouse's 2024 Revenue Cycle Management Report, which is based on a survey of 134 provider executives—the majority of them CFOs—conducted by the Healthcare Financial Management Association to understand revenue cycle pain points, solutions, and investments.
Survey results show that nearly half of healthcare leaders reported a 93% or less net collection yield, representing a significant opportunity to improve performance. Payer challenges represent the greatest area of stress, with 41% of leaders experiencing denial rates above 3.1%. Additionally, more than half of leaders flagged prior authorization as the second highest area of stress.
"Roughly 40% of respondents reported struggling with elevated fatal denial rates, with more than half dealing with elevated Medicare Advantage denial rates," said Timothy Kinney, Guidehouse partner and Finance and Revenue Cycle Advisory leader. "Many payers have increased requirements for prior authorizations, leading to more denials and increased cost to collect due to appeal activities. In the face of these pressures, industry leaders are turning to digital solutions and supplemental staffing to better navigate payer processes, maximize reimbursement, and boost returns."
Revenue cycle workforce shortages were cited as the third highest area of stress, with 90% of executives reporting labor challenges further exacerbate operations. Leaders cited consulting and outsourcing as the top strategies for overcoming revenue cycle staffing challenges. Nearly 80% of executives stated they use some form of revenue cycle outsourcing and the majority of them (71%) are satisfied with their partnerships. Further, leaders cited automation as the second most important strategy to address revenue cycle staffing challenges.
"Between the complexities of reimbursement, denials, payment delays, and more, healthcare providers are too often leaving the revenue they have earned on the table," said Ian Stewart, partner at Guidehouse. "Outsourcing and managed services experts can provide organizations a strategic upper hand in helping to navigate the payment process for enhanced and timely reimbursement."
Executives reported their highest priority for revenue cycle investment in the next 12 months is technology, such as AI, automation, and machine learning. However, nearly 25% of respondents reported cybersecurity as a key pain point—particularly notable as a wave of ransomware attacks have infected 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.
Guidehouse is a global consultancy serving the commercial and public sectors. Its Best in KLAS® revenue cycle management advisory, digital, and managed services experts bring a proven track record of helping providers combat payer challenges, reduce denials, eliminate staffing issues, improve physician satisfaction, and optimize operating costs.
About Guidehouse
Guidehouse is a global consultancy providing advisory, digital, and managed services to the commercial and public sectors. Guidehouse is purpose-built to serve the national security, financial services, healthcare, energy, and infrastructure industries. Disrupting legacy consulting delivery models with its agility, capabilities, and scale, the firm delivers technology-enabled and focused solutions that position clients for innovation, resilience, and growth. With high-quality standards and a relentless pursuit of client success, Guidehouse's more than 17,000 employees collaborate with leaders to outwit complexity and achieve transformational changes that meaningfully shape the future. guidehouse.com
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SOURCE Guidehouse
