Market Research Report
Revenue Cycle Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
|Revenue Cycle Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)|
Published: July 1, 2021
Mordor Intelligence Pvt Ltd
Content info: 110 Pages
Delivery time: 2-3 business days
The revenue cycle management market is expected to register a CAGR of nearly 8.5% during the forecast period (2021-2026).
A profound impact on the revenue cycle management market has been observed. During the COVID-19 pandemic, reduced inpatient and outpatient volumes for elective care and the higher cost of care for every COVID-19 patient resulted in declining revenue. Medicaid beneficiaries have increased, but the Centers for Medicare & Medicaid Services (CMS) reimbursed Medicaid services at rates less than those for medicare or commercial insurance. Moreover, Centers for Medicare & Medicaid Services (CMS) announced temporary payment parity for virtual care visits, but many commercial payers reimburse virtual care services at lower rates. Thus, the COVID-19 is expected to have a significant impact on the growth of the studied market during the pandemic.
The growth of the revenue cycle management (RCM) market is attributed to the increase in government initiatives to boost the adoption of RCM solutions, increasing revenue loss due to billing errors, and process improvements in healthcare organizations.
Revenue for healthcare providers depends on the accurate processing of medical claims. For improving the financial outcome, a healthcare organization needs to maintain a quality revenue cycle and insurance billing. The revenue cycle management team comprises of accounts receivable (A/R) management and denial management. With mounting pressure on hospitals to reduce cost, most of the care providers are losing revenue due to claim denials and their failure to submit or delay the denied claim. This has given an opportunity for specialty firms that provide revenue cycle management service.
Most hospitals are now dependent on third-party providers for denial management service, as they lack the expert knowledge and the time to manage the reimbursement process. The most common billing errors include failure to verify insurance, filing an incomplete claim, coding errors, lack of specificity, and missing filing deadlines. Many of the care providers are now addressing the challenge by working with third-party medical billing professionals, who are expert in the overall revenue cycle management.
According to a research article by Samantha J. Champagnie published in September 2019, in the United States, medicare continues to improperly pay billions to physicians because of incorrectly billed claims. During the 2017-2018 period, inpatient hospital claims have seen a reduction in improper payments, improper payments for physician outpatient services, particularly evaluation and management services (E/M), continue to see little or no improvement. Increasing the adoption of revenue management tools to minimize medical errors is also boosting the market growth. Thus, owing to the factors mentioned above, it can be concluded that the revenue loss to hospitals due to billing errors can be prevented by specialty revenue cycle management service providers. Thus, this factor is expected to drive the market studied over the forecast period.
Claims and denial management involves the reviews of the denial procedure. Solution providers of denial and appeal management do the root cause analysis for the claim being denied by the insurer. This involves the review of patient documentation and resubmission of the claim.
Hospitals and medical care facilities, which do not have an expert team, often depend on third-party solution providers. These companies, who have a good understanding and experience of insurer's provider guidelines, revert to insurers with explanations and requests for payment. Sometimes, the denials may be reversed by a telephone conversation with the insurer, followed by an appeal in written form, with a focus on why the claim cannot be denied.\
With more healthcare facilities, under intense scrutiny and a rise in the number of healthcare claims, a large amount of hospital revenue is being declined. As per the US Justice Department, it has recovered more than USD 2.6 billion from lawsuits involving healthcare fraud and false claims in 2019 in the United States, which was higher from USD 2.5 billion in 2018 and USD 2.1 billion in 2017.
Furthermore, in 2019, In November 2020, BKD CPAs & Advisors launched a new service aimed at helping clients identify and prevent insurance denials. Preventable insurance claim denials can cost an organization 3% or more of its net revenue, annually. With the increasing acceptance of companies that provide claims denial and appeal services, they have become more important to hospital facilities, thereby, contributing to the growth of the market studied over the forecast period.
The North American healthcare revenue cycle management market dominated the global market and is estimated to show a similar trend during the forecast period. This growth is due to factors like significant changes in regulations that have largely affected the finances, organization, and delivery of healthcare services.
Most healthcare providers are deploying revenue cycle management (RCM) systems that reduce the time taken for receiving payment after providing a service in the region. The RCM that automates many activities previously done manually is saving time, which is a major factor for the growth of the market. Furthermore, a large amount of patient data generation and increasing healthcare burden may lead to errors in medical billing and other processes. For instance, according to an article published in 2020 in the American Journal of Medicine, around 80% of the medical billings carried out in the country contained at least one error, thus, increasing the demand for revenue cycle management.
The market players adopt various strategies, such as acquisitions, collaborations, partnerships, and expansions, to increase market share. For instance, in June 2020, Cerner Corporation announced the sale of its RCM outsourcing business, Cerner RevWorks, to R1 RCM Inc. This is expected to help in the integration of technology platforms of both companies and extend R1's RCM capabilities. Thus, these factors mentioned above are expected to drive the studied market during the forecast period.
The revenue cycle management market is moderately competitive, and consists of several major players, including Allscripts Healthcare Solutions, Athenahealth, Cerner Corporation, etc. The companies are implementing certain strategic initiatives, such as mergers, new product launches, acquisitions, and partnerships that help them in strengthening their market position.