Revenue Integrity in 2024: Reducing Leakage Points in a Complicated Cycle

Tanya Sanderson, RN, BSN, MBA, MHA, CLNC, CHFP, Sr. Director of Revenue Integrity, Xsolis

The concept of “revenue integrity” hasn’t really changed over the years, but the roles, responsibilities, and oversight have become far more complex and difficult to gain industry consensus around. What began as several defined systems of controls by which hospitals guarded against revenue loss, revenue integrity has seemingly turned into more narrowly focused controls in many organizations, leaving critical gaps in what once was a more holistic approach to fiscal oversight. 

In short, revenue integrity simply means ensuring providers are paid appropriately for all services provided and in an efficient and compliant manner to prevent revenue leakage and compliance risk. That’s easier said than done.

An increasingly complicated payer-provider landscape and rising staff shortages are magnifying the disconnects between clinical and administrative metrics, technologies, and processes. These challenges are further compounded by technology and digital transformations, system consolidations, and organizational restructuring across many hospitals and health systems – exposing more possibilities for revenue loss than ever before. 

Let’s take a closer look at what revenue integrity looks like in 2024, how the challenges have evolved, and the best practices stakeholders can implement in today’s environment.

The Changing Landscape for Revenue Integrity

How has revenue integrity changed over the years? First, the evolution of technology and the ability to solve for some of the various challenges that previously existed has completely revolutionized the charge capture process. 

As an example, I often refer back to the early days in my career as a young ER nurse, where charge capture meant an index card in the patient’s chart that our business office would remind us to use to capture supplies and medications used during a patient’s visit. There were many times I would arrive home after a grueling or intense twelve-hour shift to find those ‘yellow stickers’ meant to capture charges stuck to my scrubs or the bottom of my shoe. In an emergency department setting where life and death are on the line and more patients are waiting with potentially life-threatening issues, those little yellow stickers getting on the patient’s chart were not the priority. Not much has changed over the last thirty years in some respects as the clinical needs of the patient must always come first. But in a cloud-based digital world, that would amount to a band-aid on a gaping wound with no easy way to reconcile or find potential lost charges.

Now hospitals have sophisticated supply chain and pharmacy systems that can automatically assign a charge to a patient’s account when supplies or medications are used during a patient’s encounter. This eliminates the need for those manual processes of keying in charges or validating what was used or given from documentation found in the patient’s chart prior to billing. While these advancements have eased the burdens of supply chain and charge capture processes, they still leave gaps as it relates to documentation that supports the charges billed and medical rationale for each amount, procedure, or level of service.

As technology has transformed processes, the acceleration of digital transformation and health system consolidations and restructuring has disrupted existing safeguards, exposing additional risk and gaps in revenue integrity. According to one study, about 1,500 hospitals were targeted as part of a completed merger or acquisition from 2010-19, and most of these deals (55%) involved hospitals or health systems in different commuting zones. 

According to another study, about one in eight rural hospitals merged with an out-of-market hospital or health system from 2010-18. That activity has begun to increase again in the past few years as post-pandemic financial challenges have necessitated organizations with poor financial performance seek more financially stable partners, creating more organizational and market restructuring. 

So how do organizations safeguard their revenue amidst the disruptions of today? 

Being aware

If a hospital or health system is unaware of where it is losing revenue – either at the front, middle, or back end of the process – it’s difficult to control against that loss in the future. 

The traditional three-part revenue cycle is still a useful roadmap for identifying potential points of revenue leakage and where safeguards are needed: 

  1. Front end. This starts with the patient intake process: obtaining accurate insurance and demographic information, getting authorization from the payer, and confirming it meets the payer’s medical policy to ensure their care is covered. Resolving unknowns with the provider or patient prior to service helps ensure appropriate reimbursement for care, while also reducing patient dissatisfaction and reimbursement delays. 
  2. Middle. Mid-revenue cycle is where patient care takes place, and the risk of revenue leakage is highly reliant on clinical administrative processes and documentation.  Particular emphasis is given to capturing and documenting what was done during the patient’s care (i.e. treatments, medications, procedures, etc.) and why (patient acuity, severity, risk of adverse outcome, uncontrolled pain, etc.) to support compliant coding and billing practices as well as appropriate reimbursement. In today’s digital, drop down, electronic health record, that requires intentionality, education, and assistive technology. 
  3. Back end. Back end revenue cycle processes are typically considered any of the administrative processes that occur after the patient is discharged. This typically includes any of the technical or administrative processes to finalize charges, coding, and claim submission, as well as any transactions between patient, payer and provider that take place after discharge. This is when the bill goes out, when claims are processed, and claim-related denials are issued. Ensuring your teams have automated and intuitive workflows, objective data to identify opportunities for improvement, and clear and consistent lines of communication to both clinical and revenue cycle areas is critical to improving performance and outcomes. 

One of the largest drivers of revenue leakage and financial strain outlined earlier stems from denied reimbursement from insurance claims. Creating sound processes throughout the revenue cycle and leveraging objective data to ensure all stakeholders are aware of the opportunities, risk, and financial impact, improves collaboration and reduces gaps. When 35% of hospitals report losses greater than $50 million due to exhausted insurance appeals, the need to address revenue integrity externally must be mentioned as well. 

One approach hospitals can take is creating open lines of communication with their payers, and leveraging objective data to solve for subjectivity in complex and inconsistent payer policies.  Much like the collaboration objective data can create internally, an intentional and objective approach can create better alignment with your payers. 

We can also tackle this challenge as an industry. The Hospital Financial Management Association Executive Revenue Integrity Council, a national consortium of representatives from both the payers’ and providers’ side of the aisle, held its first meeting in February. To fix the problems that need fixing, both sides need to come together to discuss their shared challenges, find common areas of concern, and learn what each side can do to help each other determine the most feasible paths to solutions. 

Discussions in this kick-off meeting highlighted the challenges already outlined above as topics, inconsistent areas of oversight, and objectives identified by the group were as vast and broad as the revenue cycle process itself. One topic resonated above all: the need to reduce revenue leakage from increased denials and rework, which requires closing gaps in each area of the revenue cycle (both clinical and financial) and creating better collaboration and alignment with payers.      

As this new consortium of providers and payers works together, or as hospitals and their payer partners work collaboratively, more opportunities for alignment and automation can be realized. The more revenue cycle functions can be automated, objective, and streamlined, the more burdens can be relieved from hospitals’ limited resources. That’s easier said than done, of course, but finding ways to put the dollars back where they’re supposed to be — into patient care — requires innovative solutions and deserves more focus than ever.

Automated solutions

Everyone knows that AI and automation are hot topics these days, but how can AI and automation help solve these challenges?

Empowering teams with data-driven insights to fix systemic challenges is the goal, but getting those teams on the same page presents complications. Some processes are more easily automated than others, and as previously highlighted, this requires a shared framework between clinical and financial administrative processes where competing priorities and viewpoints often collide. Creating a shared framework and objective approach that relieves clinician burden, and improves coordination and collaboration with revenue cycle stakeholders, can expand the possibilities of successful automated processes.

As these teams work together to automate workflows and leverage AI to identify potential revenue leakage or risk, the three-part revenue cycle (front end, middle, back end) becomes a more integrated and efficient system. As AI and automation then close the gaps between clinical and administrative revenue cycle requirements and functions with an objective approach, hospitals and health systems can achieve revenue integrity as a consistent organizational framework, as opposed to siloed functions that leave gaps, risk, and leakage unnoticed.  

About Tanya Sanderson RN, BSN, MBA, MHA, CLNC, CHFP

Tanya Sanderson RN, BSN, MBA, MHA, CLNC, CHFP, is the Senior Director of Revenue Integrity with Xsolis, the AI-driven health technology company with a human-centered approach. Tanya’s healthcare career spans 30 years including clinical nursing, legal and regulatory consulting, and healthcare revenue cycle leadership.  For more than a decade, Tanya has built, led and transformed multiple revenue integrity, denial management, and audit and appeal departments and created processes to improve denial mitigation, recovery, and compliance in multiple settings ranging from 12-hospital centralized business offices to enterprise oversight in $14+ billion integrated health systems.