Seven best practices for healthcare revenue cycle management outsourcing
The valuation of the global healthcare revenue cycle outsourcing market is slated to increase to $23 billion by the end of this year. That’s nearly double what it was in 2017. It’s no wonder why. Today’s healthcare providers face considerable economic hardships and staffing challenges, and revenue cycle management outsourcing has been touted as one solution.
What is revenue cycle outsourcing?
Revenue cycle management outsourcing is when medical practices partner with a third-party vendor to complete one or more steps in the revenue cycle process. Healthcare revenue cycle outsourcing helps reduce costs associated with the complexities and costs of employment. However, there are also many other benefits of revenue cycle managing outsourcing, such as:
Ability to expand the medical practice and/or services offered
Additional revenue generation, higher margins, and greater profitability
Greater access to high-quality candidates
More opportunities to concentrate on core activities (i.e., patient care)
Overall business continuity during times of economic and operational uncertainty
If you’re one of the many healthcare providers who has decided it makes good financial and operational sense to outsource revenue cycle management, consider these seven best practices when doing so:
1. Define your business goals. Why outsourcing your revenue cycle management? To reduce denials? Address staffing shortages? Reduce medical billing costs? Some combination of all of the above? Something else entirely? Defining your goals gives you a clearer picture of what you need, and it can help you navigate the sea of available options as you explore what various revenue cycle outsourcing companies have to offer.
2. Choose the right partner. Once you’ve identified your revenue cycle management goals, it’s easier to evaluate revenue cycle outsourcing companies and choose one that meets your needs. For example, if staffing is a challenge, you’ll want a revenue cycle outsourcing company that can draw from a deep pool of professionals or one that offers the ability to flex up and down, as needed. If your revenue cycle management goal is to reduce denials, you’ll want to make sure the healthcare revenue cycle outsourcing vendor has sufficient experience with denial management—particularly with denials that typically occur in your specialty. If cost savings is a priority, look for a vendor that is transparent about its costs and particularly one that doesn’t charge extra for set-up, training, upgrades, or ongoing customer support.
3. Establish and monitor revenue cycle management key performance indicators (KPI). Monitoring KPIs helps you understand whether your healthcare revenue cycle outsourcing partner is holding up its end of the deal in terms of helping you accomplish your goals. Here are several important KPIs to watch: Cost to collect, point-of-service cash collections, denial rate, first pass resolution rate, and days in accounts receivable.
4. Promote open lines of communication. As in any relationship, communication is key. Does your revenue cycle outsourcing partner provide a consistent point of contact to whom you can reach out to with questions? Do you meet regularly with this person to share information (and vice versa)? For example, do you collaborate to address root causes of denials? Does the person have a copy of your internal coding guidelines (if you use them)? Do they regularly make suggestions to improve your internal revenue cycle management processes?
5. Remember security. Outsourcing revenue cycle management inevitably involves sharing medical practice data with a third party. Unfortunately, most of the 10 biggest data breaches in 2022 originated at third-party vendors with access to protected health information as part of their business associate agreement.
Be sure to assess and classify the vendor’s security practices and develop a data usage policy to determine what data the vendor can access and why. Ideally, look for cloud-based software with automatic updates and security patches. Also be sure your revenue cycle management partner follows strict information security policies and received System and Organization Controls (SOC), Type 2 certification.
6. Start looking at revenue cycle outsourcing companies before you need to outsource. You never want to feel rushed when looking for an outsource partner. You want to be able to take your time finding the best fit.
7. Prioritize vendor onboarding. Onboarding is a critical process that includes everything from conveying your mission statement to mapping key processes and more. It creates a foundation for collaboration and also maximizes the value of the partnership.
Conclusion
Revenue cycle management outsourcing has many benefits, the most important of which is the ability for medical practices to refocus their efforts on patient care. However, not all outsource relationships are created equally. By following industry best practices, you can leverage your partnership to derive maximum value. Learn how edgeMED can help and be sure to check the Healthy Snacks blog for more expert insights, best practices and industry trends.
