Revenue cycle management and the Affordable Care Act's impact on healthcare

Running Head: REIMBURSEMENT AND FINANCIAL PRINCIPLES 1 REIMBURSEMENT AND FINANCIAL PRINCIPLES 1 Reimbursement and Financial Principles Nowadays, the aspect of continually assessing and improving revenue cycle management facilitates the smoother running of health institutions. The intricacies of managing such institutions have evolved to a completely new level in the 21st century. It comes down to efficiency and proficiency, managing funds in the best possible way of cutting costs while maximizing quality. Therefore, there has a demand for more funding to facilitate the desire to provide quality healthcare services. Access to such funding requires familiarity with government projects at both the federal and state levels. Presently, there are numerous sources of funding from both the government and private sector. Over the past decade, the government has provided more avenues for funding healthcare institutions by even issuing grants. Bodies such as the American Medical Association Foundation (AMAF), Agency for Healthcare Research Quality (AHRQ), and Centers for Disease Control and Prevention (CDC) provide federal and state funding to different healthcare organization n the country. 1.) Federal and State Regulations Recently, some changes in economic policies at both the state and federal level have affected the health sector. For instance, the Affordable Care Act (ACA) was designed specifically to provide lower medical insurance rates. As of 2012, over forty-eight million Americans had no medical cover plan. However, after ACA came into play, this number had reduced by five million by the end of 2015 (Clarke, 2017). Undoubtedly, the Act was a big victory for American citizens despite the negative and positive consequences in health organizations. The anticipation of more patients has been one short-term effect, which later translates to more revenue (Clarke, 2017). However, making adjustments to accommodate these numbers requires additional staff, equipment, and drugs. In the end, health organizations will have to change their payment and care models (Clarke, 2017). The new fees-for-value are some of the biggest changes in the health sector right now. In joint efforts with Medicare and Medicaid, the government has been promoting Accountable Care for Organizations (ACO) to help institutions adapt faster. Moreover, receiving bundled payments has reduced spending by two percent in two years. However, it remains to be seen whether the transition will be smooth. Additionally, new federal and state regulations have clashed with some CMS initiatives. The reductions in prescriptions and cuts for numerous programs have created a hostile climate in the health sector, especially for the private ones (Larrat, Marcoux, and Vogenberg, 2012). Moreover, reimbursement rules for pharmaceuticals have also changed, with more exceptions being made due to an influx of patient numbers. 2.) Reporting Requirements A report released by the CMS in 2017 recommended and emphasized on the need to changes the reporting systems used in most health institutions. The Physician Quality Reporting System (PQRS) is the current one being used. It was developed to encourage eligible professionals to report to Medicaid and Medicare about quality care (CMS, 2017). By using negative payment adjustments from 2015, the program has been successful in motivating physicians to deliver satisfactory quality care reports. However, with all the changes in the health sector over the last decade, the need for a more complex plan cannot be ignored. The CMS recently announced a new reporting system that will replace the PQRS in 2018. The Merit-based Incentive Payment System (MIPS) is expected to deal with all the emerging issues in healthcare. The main highlight of the program relates to its enhanced payment plan. However, little information has been provided to suggest whether the transitioning in 2018 will enhance the efficiency in the reporting health care services. 3.) Compliance Standards and Financial Principles Financial principles are important for any organization seeking to seal loopholes where employees can abuse company’s systems for personal gains. Financial principles are helpful to healthcare standards because resources will be planned for and used proficiently. Compliance requires regular assessments to ensure that any violations are reported and errant employees and punished appropriately. Lastly, the management team should account for all funds periodically whilst highlighting the areas that can make the organization to be noncompliant. Employees in the finance department should be reminded periodically of the need to be ethical while discharging their duties. 4.) Government Payer Types I have two recommendations that would help in reducing the inefficiency in the revenue cycle management in government payer systems. First, I would suggest for the systems to be automated. According to Murphy (2017), a robust and mature system is important limiting errors and reducing the time wasted which is common in manual systems. Although progress has been made over the last three years, great steps can be made when all systems are automated. However, the main challenge is related to the need for extra funding to train staff on how the new systems will work. Secondly, I would take a closer look at the revenue cycle management with the aim of identifying key stakeholders and activities in claims processing (Murphy, 2017). For the efficient and timely handling of reimbursement claims, a succinct plan should be developed. The intention is to link the various departments within a healthcare organization so that communication is based on the set schedules (Murphy, 2017). Overall, the plan should be flexible and receptive to the needs of the organization especially in enhancing of the frequency of meetings and defining the scenarios necessary where impromptu meetings can occur. Conclusion Health institutions main priority remains unchanged over the years, to save lives by providing the best care services. With improvements in technology, expectations are high to provide better healthcare services. Consequently, having an effective revenue cycle management plan is essential in achieving responsible cash flow. In future, any health organization that wants to keep improving quality care must learn to balance its books proficiently.