By Lynn Musselwhite, Executive Vice President of Operations, Elevate Patient Financial Solutions®
Maintaining ample cash flow is vital to the financial stability and success of any healthcare provider. It also allows them to grow and continue to provide critical services to the community. A key contributor to cash flow is the effective management of a provider’s A/R inventory. However, many hospitals have limited resources to devote to it. A trusted revenue cycle management partner can not only alleviate the burden of stalled claims by handling follow-up, collecting payments, and recovering on overdue claims quickly and efficiently, but improve a provider’s internal system for long term success. These days, it’s increasingly difficult for a provider to effectively manage the revenue cycle using internal resources only. From my experience, combining technology, proven processes, and experienced people together is the winning combination to recovering payments.
Understanding Provider Pain Points
When Medicare moved away from cost-based reimbursement to a prospective payment system, I immediately saw the impact on hospitals as they were being paid less than the cost of their services. While this happened decades ago, many would agree that this move impacted hospital profitability significantly 1, and it’s only one example of many that have made it increasingly difficult for providers to maintain a healthy profit margin. One of the biggest pain points for providers is many payers have reimbursement processes that don’t pay health providers at the level of their cost, let alone their target profit margin.
Cash is the key driver of success for any provider or health system. It concerns me when providers announce they’ve lost hundreds of millions of dollars. According to a Kaufman Hall’s most recent National Hospital Flash Report 2, released August 29, experts reported that 2022 is shaping up to be the worst year financially for U.S. hospitals and health systems since the beginning of the COVID-19 pandemic. The report said hospitals are experiencing some of the worst margins since the start of the pandemic, and they lack the federal funds to offset the damage. And the problem is worsening due to the tight labor market, increasing labor costs and unstable supply chain dynamics. Costs keep increasing. Cash reserves are critical to helping providers get through economic challenges.
Growth in Demand
Even though healthcare systems have announced big losses this year, there is a huge demand for A/R services, with a bubble of inventory growing because there aren’t enough resources to handle the demand and work the accounts. What drives many providers to outsource to a vendor is the struggle to find the resources to cover their inventories. Smaller providers and stand-alone hospitals are most vulnerable.
Leveraging systems through automation is a good idea as a tool to augment the expertise of an accounts receivable team. Team members should focus their time on exceptions and the automated system should handle most of the accounts. This approach translates to A/R inventory management as well. As a best practice, specialized technology with well-built processes can handle much of the inventory so that the expert A/R team can focus on the accounts that need a closer look.
Setting Clients Up for Long Term Success
I’m most proud of the way ElevatePFS partners with clients. We have the people, process, and expertise to work alongside a provider’s hospital staff and their system to re-bill payers, appeal denials, and communicate with payers. And as an added value, we find ways to improve a client’s revenue cycle claims process and we share those insights with our client. We help them learn where the gaps are and provide the information needed to address those gaps. We want to set our clients up for success and are committed to delivering unmatched service and a truly elevated client and patient experience. We provide the resources needed to impact cash flow for health systems of all sizes, including small to medium healthcare providers, community hospitals and large academic teaching facilities. This makes a real difference in the lives of so many communities across the country.
About Lynn Musselwhite
With an acute understanding of project management and a proven history of successfully implementing system strategic initiatives, Lynn Musselwhite uses her passion and expertise as executive vice president of operations at Elevate Patient Financial Solutions® to help providers increase their bottom line. With more than 30 years of experience in healthcare with specific expertise in financial management and revenue cycle articulation for large healthcare systems, she drives the success of ElevatePFS Accounts Receivable Services, ensuring her team delivers excellent customer service and meaningful results in accounts receivable management for all clients.
1 Robert F. Coulam and Gary L. Gaumer. (1992). Medicare’s prospective payment system: A
critical appraisal. National Library of Medicine.
2 Erik Swanson. (2022, August 29). National Hospital Flash Report. Kaufman Hall.