We’re finally at the point where we can see a life beyond COVID-19. However, the challenges for hospitals and health systems are likely to remain for months, if not years, to come. It is estimated that 76% of providers have had to close, divest, or downsize ambulatory buildings and offices and that 79% have had to lay off or furlough staff at some point during the pandemic. Ongoing spikes in cases have further stressed systems. It’s hard to predict when elective surgeries could return to pre-COVID levels.
There is so much unpredictability at this time that hospitals and health systems need to do all they can now to protect their revenue cycle from any further erosion. The good news is that the solution may be easier than many health systems realize. One great place to begin is by shoring up revenue cycle vendor productivity and ensuring you’re receiving the best return on your outsourcing investments.
Building a virtual Vendor Management Office can help. Fortunately, there’s a way to do it that doesn’t require a heavy lift from the provider, which is so very important at a time when resources are limited and margins are stretched paper-thin. One great opportunity is to leverage a revenue performance management partner to ensure your vendors are compliant with best practices, SLAs, and regulatory requirements. The value of such partnerships can be realized relatively quickly, but only if the partner has the technology necessary to provide insight with which to hold outsourcers accountable. Following are four benefits of leveraging these partnerships within a VMO.
Elevates vendor compliance
A survey by Healthfuse revealed that 64% of hospitals were either dissatisfied with or unsure about their vendors’ performance. This may be because vendors have their own methods of measuring and reporting performance. Not surprisingly, their results typically lean in their favor. But this lack of standardization and transparency leaves hospitals and health systems in the dark. ROI reporting becomes suspect and difficult to prove to hospital leadership. It also means hospitals could actually be losing money without realizing it.
Healthfuse recently conducted a study using data from more than two billion hospitals, including 8.31 million unique guarantors spanning 91 facilities in 29 states. The results were eye-opening. More than half of self-pay accounts were not compliant with best practices, SLAs, or regulatory requirements. More than a third of accounts placed for 31-60 days were never worked. Nearly a fourth of placed accounts past 121 days were not worked, and 19% of accounts with less than a $250 balance were not worked. Hospitals and health systems cannot afford to leave money on the table right now.
How can a vendor performance partner help? Using advanced auditing technology, the right partner can monitor 100% of accounts placed with vendors so non-compliance and problematic trends can be quickly identified and corrected early. Analytics data can provide full visibility into accounts, as well as root-cause data for proactive inventory management. This allows for better control of account holds and billing disputes as well.
Vendor reconciliation is all about accountability, and that accountability requires transparency into the entire reconciliation process. This can be a difficult requirement to implement and an uncomfortable conversation to have with long-standing vendors. None-the-less, it’s essential to ensure best practices and an optimal ROI. Reconciliation should include:
- Identifying all unpaid invoices as of a certain date and matching them to data within the hospital’s systems
- Monitoring the file-exchange process to identify unresolved issues
- Reporting down to the account level
- Proactively looking for duplicate invoices—whether in the hospital’s system or the vendor’s
- Ensuring compliance with volume discounts
Many hospitals say they do regular reconciliation, but that reconciliation often stops once the file is sent, and the vendor confirms it’s been received. Gaining actual insight into all reconciliation processes requires data that few hospitals, health systems, or even the vendors themselves have. The right vendor performance management company will have the technology necessary to monitor the entire process, thereby closing the loop for optimal reconciliation.
Enhances the patient financial experience
Aggressive collection tactics can damage a hospital’s reputation and patient satisfaction scores. Even worse, a poor patient financial experience can cause patients to delay or to skip care altogether—which can have dire consequences. Collection vendors need to be held accountable for ensuring a positive patient encounter. Vendors should commit to:
- Acting as an extension of the hospital and embracing the hospital’s culture
- Making patients feel like valued customers
- Proving collection best practices are followed
- Undertaking regular call auditing and reporting out on results
More than $7 billion in patient responsibility goes uncollected each year, representing up to 10% of a hospital’s revenue. A vendor performance management partner can ensure collection vendors are held accountable for delivering a positive patient financial experience—from patient access to final payment—while returning optimal financial results for the provider. This means reduced write-offs, faster payments, and improved patient satisfaction score
The bottom line
Creating a virtual Vendor Management Office provides a centralized resource for managing all vendors across all revenue cycle processes throughout the health system—whether a health system, an academic health system, or a community hospital. Partnering with industry experts can help organizations design and implement a VMO faster and with less effort. The best partners are those with advanced technology with which to monitor vendors to ensure compliance with best practices, SLAs, and regulatory requirements. Hospitals and health systems simply cannot afford to settle for underperforming vendors—especially now. They need to do all they can to achieve a positive ROI on their vendor investments.