In today’s healthcare climate, there is a growing trend of outsourcing revenue cycle management (RCM). From hospitals to small clinics, private practices, and even individual physicians, the RCM process is being outsourced more and more. There are many reasons for this growing trend. The following blog post will explore 12 of those reasons in detail, showing how outsourcing RCM can be a financially sound decision for your healthcare organization.
What is healthcare revenue cycle management?
Healthcare revenue cycle management (RCM) is the process that healthcare organizations use to track and collect patient payments. The goal of RCM is to ensure that providers are paid for the services they render in a timely and efficient manner.
There are many different steps involved in healthcare RCM, but the basic process can be summarized as follows:
1) Patients receive care and are billed for services rendered.
2) Providers submit claims to payers (insurance companies, Medicare, Medicaid, etc.)
3) Payers process claims and issue payments to providers.
4) Providers collect payments from patients.
Outsourcing healthcare RCM can provide many financial benefits to healthcare organizations. Perhaps the most important benefit is that it can help increase cash flow. When providers outsource their RCM, they can receive payments more quickly because they are not relying on staff members to handle claims processing and collections. In addition, outsourcing RCM can free up staff time so that they can focus on providing patient care, rather than administrative tasks.
Another financial benefit of outsourcing healthcare RCM is that it can help reduce operational costs. This is because outsourced RCM firms typically have economies of scale and can therefore offer lower prices than individual healthcare providers. In addition, when providers outsource their RCM, they do not have to invest in expensive software or hire additional staff members to handle claim processing and collections.
The benefits of outsourcing healthcare revenue cycle management
There are many reasons to outsource your healthcare revenue cycle management, but one of the most important is that it can save you money. Here are some of the ways outsourcing your healthcare revenue cycle management can help you save money:
- You don’t have to pay for expensive software or hire extra staff to manage your healthcare revenue cycle. When you outsource your healthcare revenue cycle management, the company you contract with will take care of all of that for you.
- You can focus on your core competencies and leave the management of your healthcare revenue cycle to experts. This frees up your time and energy so that you can focus on what you do best.
- Outsourcing your healthcare revenue cycle management can help you improve cash flow and reduce accounts receivable days. The sooner your bills are paid, the better your cash flow will be. And, if you outsource your collections, you’ll likely see a decrease in the number of days it takes to collect payments from patients.
- When you outsource patient billing, coding, and other aspects of your healthcare revenue cycle, you’ll likely see an increase in reimbursement rates and a decrease in denials. That’s because experienced billing and coding professionals know how to get claims paid quickly and correctly the first time around.
- You’ll also enjoy increased efficiency and productivity when you outsource your healthcare revenue cycle management. That’s because outsourced companies are often able to process claims more
- With the continuous evolution in healthcare and medical industries, outsourcing RCM services to an RCM partner allows medical professionals to stay on top of compliance rules while focusing on patient care. Monitoring RCM all day will only divert their attention away from maintaining high standards of medical diagnosis and intervention.
- Staff may not have enough time to keep up with regulatory changes and compliance issues if billing is done in-house. An RCM outsourcing partner will implement administrative workflows that ensure compliance activities. The healthcare facility will not have to be concerned with industry regulations, payer policies, or compliance.
- Professional billing and coding expertise aid in the optimization of reimbursements. An RCM outsourcing firm can use the proper coding and rules, resulting in higher refunds.
- There is a common misconception that outsourcing means losing control of your healthcare business and revenue. Indeed, outsourcing RCM provides healthcare professionals with greater control and transparency.
- An effective RCM partner assists healthcare practices in following up on insurance provider AR reconciliations. Accounts receivable follow-ups are critical because they allow healthcare providers to focus on patient care. Outsourcing to an RCM partner with an experienced team of A/R specialists who have worked with a variety of insurance companies and are familiar with policy handling will ensure payments are streamlined.
- Aside from lowering the costs of internal team salaries, office equipment, and technology upgrades, outsourcing RCM allows you to collect payments that you are legally permitted to collect, resulting in an increase in revenues. This clearly leads to cost savings.
Managing your own RCM operations can be costly; it necessitates dedicated employees who receive ongoing training and supervision. Outsourcing this overhead to an RCM firm can save you money and time associated with in-house operations, increasing profitability.
- Less capital outlay- Keeping an in-house RCM system operational necessitates significant infrastructure and resources, as well as technology and investment. Outsourcing RCM allows you to concentrate on operating expenses rather than capital investments. As a result, you have greater scalability, tractability, and revenue control.
How does outsourcing healthcare revenue cycle management save money?
When it comes to saving money, outsourcing healthcare revenue cycle management is a no-brainer. By outsourcing this critical aspect of your business, you free up valuable resources that can be used elsewhere. In addition, you’ll save money on the overhead costs associated with managing a revenue cycle in-house.
Outsourcing also allows you to focus on your core competencies and leave the management of your revenue cycle to experts. This frees up your time so that you can focus on providing quality patient care. And when it comes to billing and collections, you can be confident that you’ll receive the highest level of service and results.
Are there any downsides to outsourcing healthcare revenue cycle management?
There are a few potential downsides to outsourcing healthcare revenue cycle management. One is that you may not have as much control over the process and be reliant on the company you’ve outsourced to for billing, coding, and collections. Additionally, there may be hidden costs associated with outsourcing, such as training fees or set-up costs. Finally, it’s important to make sure that you vet any potential outsourcing companies thoroughly to ensure they are a good fit for your organization and that they have a good reputation.
How do I know if my organization is ready to outsource healthcare revenue cycle management?
There are a few healthcare business key performance indicators that will help you determine whether your organization is ready to outsource healthcare revenue cycle management (RCM). First, consider whether your current RCM process is working efficiently and effectively. If you are consistently seeing errors or inefficiencies in your RCM process, it may be time to consider outsourcing. Additionally, think about whether your team has the capacity to handle an increase in volume. If you are struggling to keep up with current demand, outsourcing RCM can help free up some much-needed bandwidth. Finally, take a look at your bottom line. If you are not happy with your current financial results, outsourcing RCM can help you achieve better performance.
There are many reasons to consider outsourcing healthcare revenue cycle management, but one of the most important is the financial benefits. When done correctly, outsourcing can save your healthcare organization money by improving efficiency and reducing costs. If you’re looking for ways to improve your bottom line, consider outsourcing your healthcare revenue cycle management to Laboratory Billings.
Laboratory Billings has been in the field for over a decade and has been an assistant to laboratories in maximizing their revenue. Our billing and coding experts work tirelessly and with a dedication to boost your business’s revenue. Get in touch with our representative today to know more.