At the Margins

Cost to collect, denials, and patient collections: How does your organization stack up?

We're updating our revenue cycle benchmarks in 2019. Don't miss out.

by Eric Fontana

This month we're opening data collection on our 2019 revenue cycle benchmarks, gathering the latest snapshot of revenue cycle performance from around the nation. This year, we're making some key additions to our metric set as we aim to provide further insight into key aspects of performance for our Revenue Cycle Advancement Center members while helping fuel new revenue cycle research initiatives in the coming year.

Access the exclusive Hospital Revenue Cycle Benchmark Generator

Our benchmarks in 2019 will be bolstered by the injection of several new data sources, including our partnership with Optum that we expect will provide us with important insight into denials and underpayments, particularly across specific payer categories. However, we need your help: Despite the increasingly technology-driven revenue cycle, many important metrics still require manual aggregation, so we're asking all members to begin preparations to submit their data on these core revenue cycle measures.

To declare your interest in joining our 2019 benchmarking initiative, email RCAC@advisory.com.

Three (of many) important questions we'll be looking to answer

  1. Are providers making inroads on cost to collect?

  2. As our last benchmarking effort revealed, there is likely running room to reduce cost to collect at many organizations. While some may view the relatively flat performance of recent years as a win, costs remain elevated above historical benchmarks. Significantly for systems, our research also suggests that M&A activity hasn't positively impacted cost to collect, while many health systems openly report a backslide in prior centralization efforts as M&A has rolled on.

  3. Are denials continuing to rise?  And are the key pain points the same, or are they changing?

  4. As we saw in our last analysis, both public and private payer denials were up and looked likely to remain a persistent challenge. Importantly, medical necessity denials surged compared with the prior data collection period, indicating the challenge many facilities are facing, particularly those without a robust clinical defense infrastructure. We also saw significant spikes in Commercial and Medicare Advantage denials, threatening to erode the cross-subsidy that remains so important for hospital margins.

  5. Are providers successfully engaging patients at the point of service? 

  6. Point of service collections are highly predictive of patients' likelihood to cover their total obligation. However challenges remain: The steady rise in HDHPs has transferred a greater financial burden to patients, significantly ratcheting up the challenge for providers to do better on the patient financial experience. Our recent research indicates a substantial—some may even say shockingly large—gap in the consistency of patients being asked for payments, even in situations where patients have the means to do so. Only 34% of a recent panel of 1,000 commercially-insured consumers with a deductible who had undergone elective surgery in the past 18 months reported being asked for a point of service payment.

Looking for more insights from our 2017 benchmarking? Members may download the book here.

Learn more: What patients want along their financial journey

Follow the patient financial journey, from pre-care through billing and collections. Learn a patient's questions and fears that arise at each step, and what tools and support your revenue cycle program must proactively provide.

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