The word “outsourcing” has faced more than its share of negativity. But the simple truth is that outsourcing – as it applies to medical revenue cycle management (RCM) – shouldn’t put an acrid taste in your mouth. It should be considered, and perhaps even fully embraced, in an effort to help control the massive amount of U.S. healthcare spending on administrative costs.
Administrative expenses are costing a fortune
“Whether it’s interpreting medical bills, struggling to get hospital records, or fighting with an insurance provider, Americans are accustomed to battling bureaucracy to access their health care,” according to a Time magazine article reporting on a 2020 study by the Annals of Internal Medicine. The report examined administrative costs for insurance companies and government agencies that administer healthcare, as well as costs in four settings: hospitals, nursing homes, home care agencies and hospices and physician practices.
The expenses are significant. The report found that administrative costs, making up about 34% of total health care expenditures in the United States… or $812 billion spent every year on healthcare administration alone, which equals nearly $2,500 per capita annually in the U.S.
Outsourcing RCM can help improve revenue and productivity…and more importantly, impact huge administrative costs
While increasing revenue is an important consideration in outsourcing RCM and medical billing, it’s plain to see how outsourcing can positively – and dramatically –impact on healthcare administrative costs of over $812 billion per year and include all these 9 steps and many more:
- Obtaining prior authorizations and eligibility verifications
- Ensuring providers are in-network with patients and identifying other providers who are, when/if applicable
- Determining both an approximation of what patients will owe after insurance reimburses and displaying their copayments
- Generating appointment reminders
- Assuring claims are submitted at maximum value
- Perfecting what is now very complicated E/M coding for maximizing revenue
- Tracking submitted claims
- Working and actually preventing claim denials
- Processing patient statements and fielding calls from patients who have statement questions
The keys to top-quality outsourcing are making all data available at all times and making it understandable and transparent
An RCM company should have nothing to hide in terms of your data. And by “nothing,” we mean “nothing.” Clients should be able to securely view anything they want with no “curtaining.” And by “anything,” we mean “anything.”
This includes claims, denials, EOBs, patient accounts, receivables, payments, appointments, etc., with clients being empowered to generate whatever reports they want. To do this, the RCM company you select needs to provide training on using their system, encourage its clients to view their data, and to use the system to the extent the client wants.
We’re talking about clients having total, open, anytime access to allof their
data. Anything less on the part of the RCM company has to be a red flag.
Revenue Cycle Management outsourcing market growing by leaps and bounds
If you don’t think outsourcing RCM is noteworthy, consider the article in Yahoo Finance about a very recent report on the value and growth of Revenue Cycle Management. An exclusive report by MarketsandMarkets™ projected the global revenue cycle management market is projected to reach $67.8 billion by 2026 from $40.9 billion in 2021, at a compound annual growth rate (CAGR) of 10.6% during the forecast period.
The growth of this market is majorly attributed to the need for increasing patient volumes, and the growing need to manage unstructured healthcare data. Also, growing regulatory requirements and government initiatives are expected to drive demand growth in the revenue cycle management market during the forecast period.
A challenging healthcare environment has made it harder for physician practices to survive
“Declining reimbursement rates, industry consolidation, and new sites of care delivery are among the latest trends impacting practice management,” according to RevCycleIntelligence.
“But physician practices are still one of the top sources of high-quality, personalized healthcare at an affordable price. Research has shown that small, physician-owned practices not only provide more personalized and responsive care to patients, but they have lower average costs per patient, fewer preventable hospital admissions, and lower readmission rates versus larger and hospital-owned organizations.” Practice management best practices can help leaders continue the delivery of high-quality, affordable care while ensuring they can keep the doors of their small business open.”
The suggestions for survival and ongoing RCM success include:
- Optimizing front-end processes: Getting information right the first time can ease many back-office headaches and ensure timely reimbursement. Optimizing front-end processes like patient registration and insurance eligibility.
- Automating when possible: Patient financial clearance isn’t the only process that can benefit from automation. Technology is a key resource for physician practices, especially when human resources are low in their communities. RevCycleInteligence reports that, “Ineffective revenue cycle management, therefore, is not an option for healthcare organizations striving to live up to their missions.” Many hospitals and practices recognize this and are prioritizing revenue cycle management optimization in order to keep delivering on their missions.
- Outsourcing as an option: With any small business, resources and capital may not be readily available. This may be especially true for physician practices, which recently experienced a dramatic reduction in patient volumes and revenues because of the COVID-19 pandemic. Outsourcing practice management and revenue cycle management functions is an option for practices finding themselves without the staff or resources to execute successful practice management strategies.
Finding the right RCM fit
It’s critical to match the right RCM outsourcing to the needs and systems in place at your medical practice, group or healthcare organization. That’s where Blue Eagle Consulting can help.
Simply call Blue Eagle Consulting at 1 (866) 981-1095, use the short and easy Contact Form at https://blueeagle-consulting.com/contact-us/, or send an email to firstname.lastname@example.org. We’ll be glad to help you assess your RCM needs and understand your options.