Around 15% of people in the United States live in rural areas – mostly older adults, who have higher rates of chronic health problems such as high blood pressure and obesity, diabetes and musculoskeletal pain. They need adequate medical attention and specialty care, which often gets hindered by specific circumstances like driving one or two hours to the closest hospital, non-availability of the right physicians, and limited medical supplies. This shows how rural hospitals serve as a critical healthcare safety net for millions of patients.
That said, despite the demand, rural hospitals operate on negative margins and are most vulnerable to closure. The unique obstacles that rural hospitals encounter when managing their revenue cycle process include a higher uninsured population, provider shortages, claims reimbursement limitations and value-based care implementation issues. Data from the University of North Carolina’s Cecil G. Sheps Center for Health Services Research confirms the veracity of these challenges — over 80 rural hospitals have closed in the last decade.
What makes revenue cycle management so challenging in a rural hospital setting? And what measures should the providers take to overcome them?
I.) Limited Resources:
Rural hospitals often have limited resources, including qualified staffing, technology, funding, and patient access. These constraints can make it challenging to keep up with the latest rcm medical billing regulations, changing payor guidelines, leading to claims errors and denials.
II.) Providing Value-based Care:
Value-based care implementation remains a major hurdle for rural hospitals. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way. While the transition from fee-for-service to value-based care models can improve patient outcomes, many rural hospitals lack the financial resources to hire or maintain quality staff. Value-based reimbursement models require rural hospitals to submit a full year’s worth of performance data, however small patient volumes may skew their performance and negatively impact reimbursement amounts.
III.) Unique Payer Mix:
Rural hospitals typically serve a mix of patients with varying insurance coverage, including Medicaid, Medicare, and commercial payers. The reimbursement rates and requirements for each payer can vary significantly, creating the need for more complex revenue cycle strategies. Rural hospitals may struggle with managing this payer mix, resulting in lower revenue and increased risks of non-compliance.
IV.) Low Patient Volume:
Rural hospitals find it difficult to cover their expenses, so they must stretch Medicare and Medicaid reimbursement, unlike urban hospitals that typically have a steadier stream of patients. This often creates a hurdle in maintaining financial stability, especially when combined with other factors such as provider shortages and a smaller patient population. As a result, rural hospitals often need to explore innovative solutions to ensure long-term viability and provide quality care to their communities.
While you would know the measures to find the right, qualified physicians for your practice, you can consider partnering with a revenue cycle solutions provider to help you alleviate back-end revenue cycle challenges and improve clean claims rate. It will help you reduce the burden on your existing staff, minimize manual errors, reduce denials, and improve the collection rate and financial health of your practice, while also driving down operational costs.
We, at Jindal Healthcare, analyze a practice’s EHR using our proprietary AI-based, HealthX, which helps prioritize claims, optimize operational costs and accelerate reimbursement. We are currently offering a free-of-charge RCM audit for rural healthcare providers. To claim your free audit, book a demo.