Why Consider Revenue Cycle Management Outsourcing?
Without a doubt, the healthcare revenue cycle is one of the most important pieces of your business. Choosing the best revenue cycle management strategy for your organization is crucial to keeping the cash flowing and decreasing staff costs.
Many clinics do revenue cycle management in-house, but as they grow and their revenue expands they find the that the RCM process requires more time and skill and the likelihood of clinical errors increases. This is why many clinics consider revenue cycle management outsourcing as a solution. Third-party RCM experts can remove the errors from your RCM process and alleviate the stress of keeping the clash flowing.
If you are wondering whether you should outsource your revenue cycle or continue to do it in-house, there are a few key things to consider before making a decision.
Healthcare RCM Outsourcing
In the past, healthcare RCM outsourcing decisions hinged on just a few issues. With the changes in the industry, the decision matrix for a practice has expanded and the case for outsourcing RCM to the right partner has grown. Today the RCM process is very complex and requires skilled and knowledgable workers and revenue cycle management outsourcing considerations have also grown more complex.
Past revenue cycle management outsourcing considerations
Control: Because it was mostly a manual process, practices perceived that in-house operations gave them more control.
Staffing: Whether or not the practice was able and willing to manage the billing staff was often a key consideration.
Cost: Performance variations were perceived to be small between high and low RCM performance, so the economic decision was simply a comparison of in-house costs vs. outsourcing fees.
Revenue cycle management outsourcing considerations today
Control and transparency: With the complexity of the RCM process, real control
is no longer achieved by simply having the staff down the hall on your payroll, but by having processes that are measured, reported, tracked and managed as outlined in this paper. Outsourcing providers can invest in these capabilities in ways that in-house billing operations cannot.
Full effort: A common concern about outsourcing is whether the service provider will work as hard as in-house staff to collect on difficult claims. Setting aside the questionable assumption that employed staff are more motivated than an outsourcer, a fully measured and transparent process is the best assurance for getting the right level of effort on hard to collect claims.
Talent: The RCM process now requires so many skill sets that even practices with a fairly large number of providers cannot have all of the necessary people on staff. Additionally, in low unemployment environments, it is hard for many practices to find and retain qualified RCM employees without their wages escalating too quickly.
Compliance: The compliance risks – both billing and data security – for a practice related to its revenue cycle are simply too great to ignore. Many practices cannot make the investment required to properly manage those risks, but outsourcing providers are able to spread the costs of compliance investments across multiple clients.
Technology: Likewise, the number of technologies required to support the revenue cycle grows every year. The capital, operating expense and talent required to build and support these technologies give the outsourcer the advantage of scale that is passed on to the practice, something that cannot be done if RCM is kept in house.
Management focus: Most administrators are now trying to navigate the practice through the ever changing healthcare landscape and nd they just have more on their plate than they can manage. Major strategic initiatives such as growth, health system relationships, and dealing with new competitive threats must take priority, along with the day to day rhythm of managing their physicians, staff and clinic operations. Allowing a trusted partner to manage their RCM and the technology that goes with it allows them to focus on what matters most.
Economics beyond cost: While the cost of outsourcing is still an important factor, there are other economic considerations as well. There are significant differences in collections and cash performance that dwarf small differences in RCM cost. As the revenue cycle becomes more and more automated, the outsourcer invests their capital to build capabilities, allowing the practice to use its capital elsewhere.
Is Outsourcing Revenue Cycle Management The Right Choice For Your Clinic?
Clinics have a number of pieces to weigh when deciding how to manage their revenue cycle, but in the end the final decision is unique to each clinic. If you find your clinic struggling to keep up with modern RCM then outsourcing is a great way to relieve some of that pressure.
If you want more information about revenue cycle management outsourcing and whether your clinic has a healthy RCM process, check out our in-depth Revenue Cycle Management Ebook.