How Healthcare Reform Affects Revenue Cycle Operations

revenue cycle operations, healthcare reformNow that we’re several years into the major healthcare reforms brought about by the Affordable Care Act, we can get a better sense of how those reforms have affected revenue cycle operations in the last few years. Healthcare Finance News put together a report on these issues last year, and many of those issues are still playing a big role in revenue cycle operations here at the midway point of 2015.


Here are a few of the main revenue cycle-related issues that have been brought about by federal health care reforms:

  • Pressures on reimbursement and cash flow. As a result of healthcare reform, there has been (and will continue to be) a decreased amount of Medicare payments but an increase in Medicaid patients. There has also been a rise in high-deductible health insurance plans, which puts more of the financial pressure on patients who have commercial insurance. Some executives believe that because of these pressures, there will be a decline in total patient revenue and cash on hand, which means there will be a lot more challenges for revenue cycle teams, as they’ll need to reduce total days in accounts receivable and work to improve collections on the front end.
  • Operations in business offices. Healthcare reform has led to a lot of consolidation and mergers among hospitals, practices and various other types of providers. This means that operations within these offices and practices have to be consolidated as well, which can be a tricky adjustment to make when each organization is likely to have been set in its own ways.
  • ICD-10 implementation. As we’ve discussed much in the past, the deadline for ICD-10 is coming, and the transition has not exactly been an easy one for many large healthcare organizations. Revenue cycle teams are still working on getting their heads around the new coding system, and the way they use it will have a significant impact on electronic health records and reimbursement trends.
  • Payment models. The rise of bundled payments and accountable care organizations will have a big impact on patient accounting systems already in place, which usually are not capable of handling new CMS-sponsored models of payment.

Healthcare reform is still very young, so there’s a lot of time to see how revenue cycle operations continue to evolve into the future. But these are the trends we’ve seen so far, and we expect them to continue.

About Howell Consulting Group

Howell Consulting Group provides healthcare consulting services to hospital and physician practices nationwide. Our key focus areas are revenue cycle management, health information technology, and revenue cycle billing and collections.

HCGs consultants are highly experienced in all aspects of healthcare financial management. We implement revenue cycle best practices to optimize your receivables performance and maximize your cash flow.

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