Healthcare providers who want to sustain and grow in this fast-paced environment must optimize their RCM. Optimizing is not just aligning all the processes in line; it involves serious documentation, analytics, research, and coordination. However, considering the growth in current health conditions and the increase in patient inflow, healthcare providers fall short of optimizing their RCM. Outsourcing RCM services here helps them achieve their growth goals and gives them all the free time they need for more analytical tasks and patient care.
What is revenue cycle outsourcing?
Revenue cycle outsourcing is partnering with external healthcare RCM companies like PCH Health to take care of their operations. It means handing over the organization’s revenue cycle tasks to external experts. Outsourcing RCM services has gained immense popularity in the past few years as an alternative to in-house models. Healthcare providers can partner to outsource specific services or the entire revenue cycle process. Outsourcing brings technology, scalability, and expertise to healthcare providers. It also addresses the challenges healthcare providers are facing the current in-house team.
What services are typically included in revenue cycle outsourcing?
There is no specificity or any typical services included in revenue cycle outsourcing. Healthcare providers can outsource the end-to-end RCM services or pick the most needed ones. The decision of the services included in revenue cycle outsourcing is critical and is backed by data and analytics. Healthcare providers usually outsource complex services like medical coding, prior authorization, revenue integrity, etc. These services consume a lot of time and resources, leaving healthcare providers overburdened.
Why outsource revenue cycle management?
Outsourcing revenue cycle management comes with numerous benefits. Healthcare providers can tackle the most significant problem of skilled staff shortages by outsourcing their RCM services. They can focus on patient care and improve the quality of their services.
Healthcare providers want to focus on medical coding, billing, and more, but they do not want to waste time. This is where outsourced revenue cycle management comes into action.
Revenue cycle management outsourcing benefits
There are numerous benefits of revenue cycle management outsourcing. It helps healthcare providers surpass their KPI results and gives more time for patient care. Here are the other reasons why healthcare providers must outsource revenue cycle management.
Focus on patient care
Not using in-house staff to handle money matters and outsourcing RCM services gives healthcare providers more staff to offer premium patient care. They also have additional resources to upgrade facilities, buy new equipment, and increase training.
Increase efficiency
Healthcare providers can eliminate a lot of speed bumps in realizing income with RCM outsourcing. They can seamlessly handle the claims and do not need to provide constant inputs to the staff for their coding and billing process.
Manage staff
Healthcare providers can efficiently manage their in-house staff with additional funds and time. They can invest more resources on staff skill improvement training, thus increasing their retention and skills.
Improved reimbursements
Outsourcing RCM gives managers full time and liberty to focus on accounts receivable staff. A/R managers improve reimbursements as they dedicate themselves to obtaining funds from patients and providers.
Reduces errors
Revenue cycle management companies have highly trained and skilled staff, and the margin for errors is minimal. Healthcare providers can see an immediate drop in claim creation and submission errors.
Access to skilled staff
Outsourcing revenue cycle spares healthcare providers a huge amount of money in hiring skilled members needed to manage important services that are currently subcontracted.
Industry changes
RCM service providers are constantly connected with industry leaders and know all the market trends. Because procedures and requirements constantly change, healthcare providers can stay compliant with these changes by outsourcing their RCM services.
Reduced denial rate
If the patient’s claim is denied, it must be re-examined for errors. Outsourcing helps healthcare providers eliminate errors in the first place and even if the claim is rejected, healthcare providers can appeal or resubmit claim on time reducing the actual denials,
Improved payments
With an increase in clean claims and on-time claim submissions, healthcare providers can make their RCM process steady and smooth. They can expect continuous and improved payment.
Quality output
Healthcare providers get quality output of all the RCM services they plan to outsource as experts handle their process. They can expect continuous transparency and an increase in their overall output.
Challenges of outsourcing revenue cycle management
Saving time and cost is not the only concern that determines the final decision of revenue cycle management outsourcing. Here are the challenges of outsourcing revenue cycle management that healthcare providers must consider.
Adding an expense
Revenue cycle management companies work on a fixed cost or take a percentage of the revenue recovered. If healthcare providers are under a budget crunch that can not be solved by eliminating overhead costs, they must carefully pick the services they plan to outsource.
Potential extra fees
Many consultancy firms that offer RCM services bill extra for beginning services, printing documents, canceling services, and generating reports. Healthcare providers must consider these costs in their RCM budget. Reputed RCM companies mention the extra service charges, but healthcare providers fail to understand these unless the bill arrives.
HIPAA blunders or security breaches
Revenue cycle management deals with large amounts of personal information like patient data, insurance information, and billing information. There are chances that an employee or system data breach could cause a massive loss in terms of reputation, cost, and trust in healthcare providers.
Giving up control
Outsourcing RCM services results in further distributing responsibilities. Depending on the present organization structure this may or may not affect the direct care teams or members of management. Hiring end-to-end revenue cycle management services might lead to a sense of control loss.
Time constraint
Partnering with an external RCM company has a better turn around time and reduction in cost as compared to in-house staff. But, according to healthcare finance, few accounts, particularly self-paying uninsured patients, take longer to close. They took 30 days extra to pay.
How to choose the right outsourced revenue cycle management provider
Choosing the right outsourced revenue cycle management provider involves multiple factors that need to be considered. Healthcare providers can not just select the RCM service provider. The process involves searching for the right partner that aligns with the organization's values, goals, and needs. The right RCM solution transforms the financial landscape of healthcare providers
and creates new paths for improved finances, compliance, efficiency, and patient satisfaction.
Understand needs
Every healthcare provider has its own set of challenges and needs. Outsourcing RCM services should give them the solutions for this. Healthcare providers must conduct an internal audit to understand the right needs and connect with the decision-makers about what they expect from the RCM service provider.
Research and shortlist
Every RCM service provider is different. They have a particular skill set and use different technologies. The cost of different services is also different; some RCM companies charge a percentage basis while some take fixed amounts. Healthcare providers must do deep research on the providers and shortlist a few that best suit their requirements.
Check reviews and references
After shortlisting the RCM companies, healthcare providers must check for reviews about the companies both online and offline. They must also ask for references to the RCM service providers who they shortlist. Client testimony and case studies also help healthcare providers make an RCM outsourcing decision.
Evaluate support and communication
On-time or quick support is something healthcare providers must discuss with their RCM service provider. They must understand the communication channels available and how easy it is to contact the team. Support and communication are what a healthcare provider would always need, keeping in mind the complexity of the process.
Transparency and flexibility
Transparency is the key to outsourcing RCM. Healthcare providers must hire a company that is transparent about the processes and regularly updates the clients on the process taken or the status of claims. Apart from this RCM company should be flexible in offering the services and able to up-scale or down-scale according to the requirements.
Best practices when outsourcing revenue cycle management
Revenue cycle management involves five important stages: pre-service, service, billing, payment, and post-payment. Healthcare providers must follow best practices when outsourcing revenue cycle management.
Pre-service
Pre-service stages include patient registration, scheduling, insurance eligibility verification, and prior authorization. Healthcare providers should look for experts who can automate these services and a solution that seamlessly integrates with the existing systems.
Service
The service stage covers everything while delivering the services to the patients. It also includes medical coding and staying compliant with healthcare guidelines and regulations. Healthcare providers must partner with an RCM company with experienced and certified coders. RCM service providers must adhere to all the guidelines and HIPAA regulations.
Billing
In the billing stage, RCM companies create and submit claims to the payers. Managing denials is also included in his stage. Healthcare providers should partner with a company that provides automated solutions for claim scrubbing and submission. RCM companies should use RPA and AI to offer medical billing and coding. They must accurately post all the payments and manage denials seamlessly.
Payment
The payment stage includes account reconciliation and payment posting. This stage focuses on processing the payment received by the payer or patients to the provider. Healthcare practice works with an RCM company that regularly checks and syncs accounting and payments. Also, they must look if the RCM provider reviews contracts and rates with payers.
Post-payment
Post-payment involves monitoring financial performance and managing outstanding accounts with the organization's goals and KPIs. RCM companies should have the capability to collect payments on time and automatically follow up with overdue payments. Healthcare providers should also look for partners that do prompt payment posting and provide in-depth reports based on thorough analysis.
In-house vs. outsourced revenue cycle management
As the healthcare provider expands, they must choose whether to expand their in-house team or outsource revenue cycle management. Both approaches can show results to healthcare providers but have pros and cons. The decision should be dependent on the organization, size, requirements, and the budget they plan to dedicate.
An in-house team offers complete oversight and control to healthcare providers, but it comes with the challenges of maintaining a sustainable investment in technology, human resources, and ongoing training. Healthcare providers must also stay updated with the changing regulations. The in-house team can lead to inefficiencies due to a lack of expertise, errors, or staff turnaround. These inefficiencies lead to payment delays, denials, and revenue loss. It would also divert the primary focus of healthcare providers from patients.
Outsourcing RCM services brings technology, scalability, and expertise for healthcare providers addressing the challenges with in-house teams. Cost-effectiveness, minimized staff issues, reduced overheads, etc, are benefits that healthcare providers can get by outsourcing RCM services to companies like PCH Health.
How much does it cost to outsource revenue cycle management?
The benefits of outsourcing revenue cycle management are no secret, but healthcare providers are always worried about the costs associated with it. Here are the factors that affect the price of RCM outsourcing.
- Complexity of medical practice
- The volume of claims and patients
- Service required by healthcare providers
Apart from these, contract duration and availability also shape the amount healthcare providers need to pay to healthcare providers. Companies that are available 24/7 cost more than companies that work during standard hours. Contracts that are long-term cost less than those for a shorter duration.
Here are the payment structures healthcare providers can opt for.
Percentage based fees
RCM companies here usually bill between 5-10% while this might change with companies. Here, the healthcare providers pay a particular percentage of the revenue generated.
Hourly rate
When the RCM service providers bill the company, they add the hours they have worked to complete a particular task. Hourly rates usually vary depending on the size of the company, expertise, and experience, but they might change depending on the complexity of the services.
Per-claim fee
Healthcare providers here pay a fixed per-claim fee to RCM companies. Per-claim fee depends on the services included in the plan and overall claim complexity. The cost of follow-up or denied claims might be overlooked.
Fee-for-service
It includes a fixed fee based on the services offered to the healthcare provider. Some companies here charge monthly, while others charge per claim. The complexity of the claim also affects the fees.
Hybrid model
A mixture of percentage-based services and flat fee models come under the hybrid model. A flat fee applies to claim submissions and follow-ups, while percentage-based fees are reserved for complex tasks like A/R management or denial management.
Why outsource RCM to PCH Health
Clients working with PCH Health consider it the best RCM company to partner with. PCH Health has a team of 3000+ RCM experts who help to achieve growth goals for healthcare providers across the US. Our highly experienced team can provide end-to-end RCM services according to the client’s needs. We also offer autonomous coding with an accuracy of >99%. Healthcare providers can expect a reduction in overall costs by 20-25%. Our SaaS platform can help you manage claims seamlessly. To know more about us or outsource RCM services to PCH Health click here.