Don’t Be Late to the Party: Top 5 Reasons Full Outsourcing May Be Right For You

Healthcare organizations share a common mission: improve patient outcomes and support community wellness. But without strong revenue cycle performance, that mission becomes impossible. And with thousands of payor updates per year, the process for getting paid is becoming more complex and labor intensive. The result? Hospitals suffer losses while payor profits soar. Something is broken. The solution? Outsourcing your revenue cycle function. 

The number of healthcare organizations outsourcing revenue cycle management (RCM) has risen steadily in recent years. Black Book Market Research shows over 90% of hospital leaders are considering outsourcing companies. This matches findings from Grand View Research showing the U.S. RCM market size is expected to grow by more than 11% in the next seven years. 

The pandemic is also intensifying market growth. Up to 75% of healthcare leaders report experiencing adverse revenue cycle impact tied to COVID-19, underscoring the need for hospital revenue cycle transformation. Outsourcing RCM to a third party helps cut costs while allowing you to focus on patient care.  

Here are the top 5 reasons why more providers are exploring outsourcing their revenue cycle. 

1) Patient Care 

You can do one thing well, or many things poorly. For a hospital, that one thing must be patient care.  

RCM is time-consuming and complex. A single missed code or billing error can cause havoc in denials and underpayments. Partnering with an RCM outsourcing company eliminates your need to spend hours of back-and-forth with payors, filling out paperwork and fighting to get paid. Let someone whose core competency is fighting on your behalf take that off your plate so you can focus on what’s most important, the patient.  

2) Regulatory + Payor Compliance 

With the inundation of federal, state and local government regulations and payor policies, providers are forced to juggle all aspects of their medical facility. Failure to comply with these rules and regulations could come with serious consequences.  

“The regulations to stay on top of — in terms of changes in charge master and CPT codes and all of the modifications that our payors could sneak in throughout the course of a year — are difficult to keep up with.”  
-John Starcher, President + CEO, Bon Secours Mercy Health, Healthcare Revenue Cycle Testimonials Video 

Partnering with an organization who’s built in patented processes to track these changes ensures compliance and helps providers to stay ahead of the constant state of flux.  

3) Labor Shortages 

Disrupting events, either national or local, make it hard to find talent to adequately staff your departments. Thanks to COVID-19, this is more evident now than perhaps ever before.  

Compared to pre-pandemic levels, labor expense has increased by nearly 15% while full-time equivalents (FTEs) per adjusted occupied bed decreased by 4%. This indicates the rise in labor expense is associated with the demand for higher salaries, not more FTEs.  

With these challenges in mind, consider whether your team’s time is best spent worrying about finding coders or billers or on growing your practice? Outsourcing your revenue cycle eliminates the burden from your organization and places the responsibility on your partner to do what they do best. In turn, you regain bandwidth to focus on clinical excellence.  

There are actions you can take to mitigate the impact of a labor shortage. Here are 6 steps to combat labor shortages and other operational side effects of COVID-19. 

4) Cash Collection Velocity + Accuracy 

The time it takes to get paid is already too long even before introducing denials, billing errors and bad processes.  

The right RCM partner will resolve those challenges. They’ll implement proven best practices and automations to drive monthly cash flow increases and overall collections quickly and efficiently.  

“There’s always this conversation about ‘Do you make it, or do you buy it?’ It would have taken us probably, an easy five years to develop the competency that we needed. And we didn’t have that kind of time.” 
-Dr. Imran Andrabi, President + CEO, ThedaCare 

With these financial improvements, your organization can reinvest that cash infusion to better serve your patient population. Whether it is increased facilities, better equipment or additional staff, the speed to value quickly adds up.  

5) Cost Reductions 

Between the costs of labor, training, software and hardware, running your own revenue cycle is a costly endeavor. 

Economies of scale help to reduce costs. And when a company focuses solely on being the best at revenue cycle management, they optimize best practices and create efficiencies that benefit their partners. Eliminating the need for providers to carry full-time staff to handle coding and billing saves not only on salaries, but also on office space, benefits, vacation hours and more.  

Partnering with a dedicated team of experts saves you money and time, not to mention the maximized claim reimbursements. 

So, you’ve decided a full outsourcing partnership may be right for your organization. But how do you find the right partner? Someone you can trust? To find that perfect fit, consider these things.  

  • Make sure they’re who they say they areTalk to the company’s current clients to determine if their results matched the sales pitch. It’s critical to check references and hear directly from your peers who’ve gone through the process. Don’t just take the vendor’s word.
  • Ensure you’re both on the same page. It’s important to be very clear about what’s expected from each side, what the relationship deal breakers are and what vision everyone is working towards. Discuss your objectives, goals for the partnership and current challenges up front. A strong partner will be invested in your vision for the long-term and will work collaboratively to ensure your goals and incentives are aligned with theirs. Ask about their approach to technology, systems and tools. Will they be able to work with your existing systems and tools or require certain technology to be decommissioned? What IT support will be required by your resources and what training will be provided to your end users?
  • Confirm they share your values. Professional partnerships that are built to last have mutually inclusive priorities and shared values. Make sure your mission and cultures are aligned. Maybe you won’t be introducing them to mom and dad, but is this a partnership you’d be proud to announce to your community? Would your employees assimilate well into their organization? Does the vendor have the infrastructure and processes in place to smoothly transition, train and grow your employees?
  • Make sure it’s not one-sided. Ask your potential partner how they will work to ensure that decision making about policies and procedures is inclusive of hospital leaders and aligned with hospital goals. Will a joint steering committee be established with equal representation by the hospital and vendor? If so, how early in the process? What other cross-functional communication channels will be established?
  • Set clear expectations from the start. Ask them how they get started and how they ensure project success. These types of engagements are incredibly complex and require diligent project management and execution. Ensure the vendor has a process in place to get intimately acquainted with your processes, staff, workflows, systems and areas of opportunity. Make sure you feel comfortable with their ability to create and manage complex project plans and report out on key metrics before and after project go-live to ensure there is no productivity loss or dip in performance during the transition.
  • Look for the “whole package.” Ask what they bring to the table outside of day-to-day operational management. The best partnerships are the ones that bring incremental value to the relationship beyond fulfilling day-to-day obligations. Will your partner identify issues and help you resolve them, even if it’s not exactly what they signed up for? Will you be able to rely on them for insights and action plans related to payor policy changes to help you stay compliant and avoid preventable audits, claim rejections and denials?

 


 

Want to find out how a revenue cycle outsourcing partnership could transform your organization? Contact an Ensemble expert today to get started with a revenue cycle assessment.