Retrofitting RCM AI is Difficult & Euclid Moments

Retrofitting RCM AI is Difficult

September 03, 2021

By 2026 The Medicare Hospital Insurance trust fund will be depleted. That information was provided in the 2021 Medicare Trustees annual report. The trust fund covers Medicare Part A. According to the report, the depletion deadline hasn’t changed from what the board of trustees set in 2018, when the timeline was reeled in from 2029 to 2026. The good news is that it hasn’t changed in three years. The sad news is that it hasn’t changed in three years… it is still right around the corner or perhaps right over the cliff.

Come 2026 when the fund is projected to be depleted, the Hospital Insurance trust fund will only be able to pay 91 percent of program costs with revenue under current law, according to the report. Many healthcare organizations operate on margins under 10% and some far less than that. Therefore, the numbers don’t add up without momentous change. Where will the funds or how will the shortfall gap be overcome?

The funding shortcoming is not the end of the story. There is also a projected rise in costs for that same period. Costs are expected to rise from 4% of GDP to 6.2% by 2045. From there they are project to level off around 6.5% annually through 2095. That’s a long way off and few of us may find credibility in that projection, let alone any urgency regarding that matter come the year 2095. However, if you calculate the compounding of those projections that is one heck of a rate of inflation, and a very scary one as well!

When considering expected regulations, which may be factored to some degree, the numbers could get worse. Think of just the MIPS Medicare Part B adjustments numbers currently in play and how significant they are. Next year a clinician could receive plus or minus adjustments of up to 9%. No one wants to be on the negative side of that, but some, if not many, likely will be.

Many positive changes need to occur to help mitigate the potential disaster that could befall our healthcare system. Change seems to be the most difficult word in any healthcare vocabulary but as we all know "Necessity is the mother of invention". It is a well-known proverb. It means, essentially, that the primary driving force for most new inventions is a need. And healthcare, you might say, now has a “screaming” need. So, with a need, come solutions to solve problems, reduce costs and increase revenues.

Three areas come immediately to mind regarding opportunities and problem-solving solutions. Patient enrollment, encounter processing and revenue cycle management are such operations that often need work, updating, change and innovation in healthcare systems, standalone hospitals, and even small physician practices. Only the volumes are different. Millions can be saved by flexible and comprehensive systems, flexible and capable partners, and flexible and competent healthcare organizations – from leadership on down.

Data leakage, manual processes, poor reporting, and the unwillingness of organizations to try something new or even different are major causes for these problems and more. Add to that the exorbitant cost of many aged, monolithic systems and handicapped change management and “Houston, we have a problem”!

Thankfully, some organizations are tackling the challenges and finding success. And success will be greatly needed to go beyond the immediate systematic problems and needs within the control of a healthcare organization and its partners. Facing and winning against the building inflationary costs and funding shortcomings will require intentional, concerted, and persistent efforts to innovate and create enabling workflow automation to support methodologies to dramatically reduce costs and increase revenues.

In an article published in Becker’s early in 2021, Jackie Drees wrote that RCM functional groups are outpacing other users in hospitals at the use of AI. She cited a Change Healthcare report which found that “Individuals working in revenue cycle roles at hospitals are among the top users of artificial intelligence technologies, beating out IT and non-technical executives, according to a January 19th Change Healthcare report.

For its Poised to Transform: AI in the Revenue Cycle analysis, Change Healthcare surveyed 200 revenue cycle, IT, finance, and C-suite leaders about the use of AI and predictions for how the technology will be applied in the future.”

According to the report, 89% of revenue cycle workers in hospitals surveyed stated that they use AI in their roles compared to only 63% of those working in IT and 48% working in non-technical jobs. 89% seems to be a very high statistic, but if it is truly representative, the industry seems to be making strides forward.

Perhaps a more curious finding illustrates the satisfaction of using AI to accomplish the worked needed. Only 46% of IT leaders said they were satisfied with their current use of AI. Perhaps they feel much more could be accomplished than currently being delivered. Of those in RCM jobs using AI, 78% surveyed were satisfied, and only 25% of non-technical workers, executives and financial leaders were happy with the success of the technology. Let your imagination contemplate that finding from the survey.

As you would expect, similar, but not exact numbers followed when asked if they see value in using AI. When leaders see less value than workers, it must mean either they are not getting the ROI they are targeting, they don’t fully understand the value, or they believe the technology is under or mis-used in some way. Or of course, the worst scenario possible, that they simply are averse to change.

Some older solutions cannot incorporate modern technologies such as AI. Others can only develop complimentary applications that must be “bolted on” and not completely integrated. None of those solutions offer optimum growth, creativity, innovative capabilities, or functional and strategic flexibility. They also will almost certainly cost more… if not initially, then when change is required. And when that change is required, it will likely be more difficult. Add that to the sometimes relatively low acceptance of technology and you may see necessity as a good thing, even if the numbers are scary.