Two of the nation’s most noteworthy companies in the Revenue Cycle Management (“RCM”) technology space, Navicure Inc., and ZirMed Inc., announced a merger on September 14, 2017.

Navicure is a medical claims management, patient payment and data analytics company and ZirMed is known for its predictive analytics technology that helps healthcare organizations capture more revenue. The parties have announced that Navicure will purchase ZirMed and the transaction is expected to close by the end of this year.

Revenue Cycle Management

Providers are all too familiar with RCM – the financial management process that encompasses claims processing, payment, and the generation of revenue; it begins with the patient first making an appointment, and ends with reimbursement for the healthcare services provided.

The Navicure-ZirMed merger reflects the changing and growing demands on RCM companies from providers. Such increasing demands have been significantly influenced by the advent of the Patient Protection and Affordable Care Act (ACA). Moreover, given the ACA’s uncertain prospects, it is highly likely that the increased demands currently being placed on RCM companies will be subject to ongoing transformation into the foreseeable future.

Changing RCM Demands – Healthcare Informatics

As an example of the changing RCM demands tied to the ACA and the ebbs and flows of healthcare reform in general, RCM companies have had to make significant investments into growing their expertise in healthcare informatics – defined as, “the interdisciplinary study of the design, development, adoption, and application of IT-based innovations in healthcare services delivery, management and planning.”[1] By reinforcing and creating new ties between patient outcomes data and governmental payment program reimbursement – e.g., Medicare pay-for-performance reimbursement mechanisms – the ACA has increased the importance of effective and accurate RCM programs, especially with respect to coding, billing and reimbursement. As they have evolved, sophisticated RCM programs now allow healthcare organizations to streamline processes, maximize reimbursements and support compliance with federal and state frameworks for oversight.

In keeping with the above, the ACA has prompted many healthcare organizations to revisit and revise their internal RCM strategies and approaches to address ACA and other sector-wide opportunities to improve and increase patient care outcomes and reimbursement. To achieve such goals and objectives, providers and payors have encountered many challenges stemming from:

  • Enhanced oversight activity by federal and state governments related to billing and coding compliance;
  • Shifting patient financial responsibilities (e.g., the declining reliance on charity care policies, increased co-payments for newly insured patients who were previously uninsured or underinsured, and under the growing trend of high deductible health plans) which necessitate new forms of patient communication and engagement;
  • The automation of duties that were previously handled manually by employees, such as informing patients of appointments and reminding patients of existing balances;
  • Emphases on population health management and value-based reimbursement that drive demand for efficient and analytics-driven RCM; and
  • Advances in RCM technologies, such as cloud-based electronic medical record systems, to improve access to and the flow of claims data.

Given the above, many healthcare organizations have turned to RCM technology companies, such as Navicure and ZirMed, to help them realize the above described opportunities to improve and increase patient care outcomes and reimbursement. While outsourcing RCM to technology companies may be a solution for many healthcare organizations, there are certain “best practices” for organizations seeking to improve internally-managed systems to consider, including:

  • Conducting regular audits to identify and correct for potential compliance issues;
  • Regularly reviewing policies and procedures for potential updates flowing from the ever-changing healthcare regulatory environment;
  • Establishing performance reviews based on measurable benchmarks (e.g., average time taken to submit a claim, average reimbursement rate, etc.) to identify and correct for inefficiencies in the billing process;
  • Implementing effective mechanisms for patient engagement, including opportunities to connect with patients prior to a visit, at the time of service, and post-visit; and
  • Clearly defining staff/personnel responsibilities as pertaining to billing.

In sum, as healthcare policies regarding reimbursements continue to grow in complexity, it has become increasingly important for healthcare organizations to further develop their RCM systems either directly or indirectly through the use of outside RCM organizations.

[1]   (Procter, R. Dr. (Editor, Health Informatics Journal, Edinburgh, United Kingdom), “Definition of Health Informatics” August 16, 2009, at