MetahOS Helps Reduce Accounts Receivables for Hospitals

MetahOS - Finance Head

The revenue cycle is the central nervous system of any healthcare enterprise. It communicates and coordinates information about the system’s most important relationship with Patients, Providers, and Payers. An integrated revenue cycle will help healthcare systems strengthen these relationships. MetahOS Helps Reduce Accounts Receivables for Hospitals. 

What Are Accounts Receivables (A/R)?

Accounts Receivables are simply money that has already been earned but not received by hospitals when a hospital bills its insurance companies (payers) for treating their subscribing patients, resulting in outstanding payments owed to the hospital by the payers.

Who are these Payers?

These Payers typically are:

  • Private Insurance Companies: Bajaj Allianz and any other Health Insurance Companies
  • Corporates & MSMEs: Industries, Railways which contract a hospital to provide care to their employees
  • Government Schemes: Employee State Insurance (ESI), ECHS, Ayushman Bharat, Arogya Bhagya, and countless other state and central government schemes.

Understanding Your A/R Report

A hospital’s Accounts Receivables report lists all inpatient and outpatient services rendered to patients during a given period. These reports are used to determine how much a patient owes the hospital for services and/or supplies. 

A mid-size hospital’s A/R is typically 1-year of EBIDTA, and, in some cases, it might go up to 2-years of EBIDTA.

Root Cause Analysis: Why Does A/R Increase?

An increase in Accounts Receivables starts when the patient is admitted and multiplies each day for every mistake across the patient journey. Most often, the delay in Receivables is due to lapses at the Hospital end.

 

Metahos Healthcare Operating System Integrated Receivables Management System Increase in Accounts Receivables

Below are the 6 common root causes of delay in A/R

  1. Patient Admission/Registration

    1. Unavailability of Patient Checklist for Eligibility
    2. Efficient Screening Process
    3. Staff Training Issues
  2. Ward

    1. Delay in Updation of Records
    2. Incomplete File
  3. Reports

    1. Delay in Radiology Reports
    2. Delay in Lab Reports
  4. Billing

    1. Random Selection of File for Bill Processing
    2. Delay in Investigations Report
  5. Government & Validation Desk

    1. Unavailability of Patient-Centered Counselling
    2. No Requirement to Enter a Discharge Summary
  6. Claims

    1. Absence of Process Monitoring
    2. Shortage of Man Power

How to Overcome These Pitfalls

Hospitals need to bring in change through the following 6 drivers.

  1. Revenue Realization

    • Improve revenue growth by decreasing A/R
  2. Increased Productivity

    • Decrease time taken to submit claims by at least 50%
  3. Service Delivery Improvement

    • Measures to improve the flow of documents between departments
  4. Cost Reduction

    • Reduce cost by enabling single entry, multi-use
  5. Treatment of Operational Risk

    • Reduce PEOPLE dependency; increase PROCESS dependency
  6. Compliance

    • Stay compliant while improving processes, training, and enabling technology

Risk Awareness and How to Mitigate

Knowing your risks is half battle won! As Sun Zhu, the author of Art of War, says, “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained, you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.

Some of the common risks include:

  1. Systems are not interoperable nor integrated, thereby creating duplicate transactions on multiple systems.
  2. Too much dependency on Human Resources rather than processes.
  3. Unaware of daily vital statistics to the running of a hospital.

Recommendations for Operational and Financial Gains

Identify Bottlenecks and Fix

Like a supply line in a manufacturing company, the files move in a predefined order. Still, every process creates bottlenecks if the implementor does not understand the Theory of Constraints.

Baseline Performance Profile

For consistent data to assess action areas, proceed with data collections, and Revenue Cycle improvement.

IT Optimization

An ongoing process that uses best practices and solutions to remove gaps. Also, initiate Continuous Improvement Process (CIP) and award best practices.

Patient-Centric Revenue Cycle

A Patient-Centric Healthcare System would improve care delivery and provide seamless integration across scheduling, registration, arrival, care delivery, billing, post-care, collections, and be key for revenue integrity & market leadership.

Hospitals can now benefit quickly from MetahOS Integrated Receivables Management System (IRMS), as it can work alongside any Health Information System (HIS). Along with IRMS, you also get

  1. End-to-end transformation

    Deliver comprehensive revenue cycle services, including process redesign, technology enhancement, organizational design, and performance management.

  2. Revenue cycle business intelligence

    Conduct root cause analysis of revenue leakage to identify net revenue, reduce bad debt, and accelerate collections.

  3. Charge integrity and reimbursement

    Drive net revenue improvement through an enhanced mid-cycle process.

    • Meta hOS Accounts Receivables Simplified
  4. Revenue cycle systems implementation

    Plan, design, and implement technology systems.

  5. Revenue cycle tools

    Automate workflow processes and enhance reporting capabilities through IRMS.

Currently, 80% of all Hospitals are not utilizing the power of the Integrated Receivables Management System.
The lack of integrated tools leaves hospitals frustrated with not getting paid on time and with no time to handle their receivables. This is where MetahOS Helps Your Hospitals Reduce Accounts Receivables.

10 Things Your Boss Wishes You Knew About Receivables Management

Account Receivables (AR) are amounts yet to be received for goods or services ordered. AR is legally enforceable claims for payments generally in the form of invoices raised by a business for the goods or services rendered to the customer. 

 

In a hospital setting, AR could be in the form of Government Schemes and Insurance Claims owed to the hospital by the administering authority, generally the claims processing department of the Government scheme or the Health insurance company. 

 

Here is where things get a little complex. If you are working in the hospital insurance claims department here are some important things you need to know.

 

  1. Each policy or agency has its cycle of payments against the claim raised. For example Insurance Company A may have a processing cycle of 15 days while Insurance Company B may have a cycle of 45 days 
  2. Accounts Receivables management is critical for a hospital to ensure proper reconciliation. Lack of an AR tracking system could lead to bad debts and bad patient experience. 
  3. Limited mode of payments. If your hospital has a limited mechanism of payment receipts, for example, if the hospital accepts only CASH payments, it somewhere reflects on the profit. The solution is to have multiple payment processing options like Credit/Debit Card, Online direct bank deposits, Digital Payments, among others. This gives more flexibility to patients to pay for services. 
  4. Interdepartmental coordination. How often do we experience that the attending doctor has given a discharge note but the Nursing Station, Pharmacy, Diagnostics, Billing Department and Claims department are running from door to door to get the right discharge summary and supporting documents? The solution is to integrate Medical Records, Pharmacy, and Billing systems that streamline the discharge process. 
  5. Hospital Staff training. Many of the medical staff and nursing staff have limited knowledge of the insurance claims process. Regular internal training could help better communication between departments and better coordination 
  6. Using multiple software systems or paper-based systems could increase the time required to gather all necessary documentation. Having one robust system across the organization could ease-out bottlenecks. 
  7. Requests for more information by the claims department of the agency or the insurance company are very common. This simply means not enough documentation was submitted during the initial claim process to justify the claim. Having a centralized information system could reduce the errors and the claims department could have access to all reports, bills, and treatment data before the claim is submitted therefore reducing the overall AR cycle. 
  8. Patients and Their Attending family members the majority of the time are not aware of the insurance coverage. It would be helpful if one dedicated insurance processing expert reviews the policy at the hospital and educates the coverage and limitations of the policy to help the patient understand the policy better and take better decisions. 
  9. Timely and Accurate information when provided to the insurance claims department reduces the overall lifecycle of the AR in question. 
  10. Develop a Plan, SOP, and KPI for your Hospital Claims department, Define roles and responsibilities. It is essential to have a plan in place. High staff attrition is a problem many hospitals face. The Claims Process plan and Process map will assist in hiring the right resource and providing training. KPI measures the performance of the department. 

 

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Solving Hospital AR problems

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