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.
Considering outsourcing? Find the right partner.