Insights: Article

Outsourced Revenue Cycle Management: Finding the Best Solution for You

February 25, 2016

As Health Care Reform changes reimbursement from fee-for-service to value-based payment structures, it has become increasingly difficult to maintain efficiencies in Revenue Cycle Management (RCM), educate staff on reimbursement changes and achieve optimal reimbursement rates. These changes, coupled with the revenue cycle team staff shortages that many health care organizations across the country are experiencing makes the option of outsourcing RCM more appealing. As organizations examine the available RCM options, determining the best option for their organization may seem daunting. Contracts can be ambiguous and the use of third-party quality control metrics are typically not addressed. As indicated below, the majority of health care organizations recognize the need for assistance in navigating the options and finding the best solution for them.

  • 83% of hospitals under 100 beds are pursuing RCM outsourcing due to staffing concerns and shortages*
  • 62% of small and community hospitals are considering using a consultant in their determination of a RCM solution, but 83% have reported difficulty securing RCM consulting engagements due to demand*
  • 80% of CFOs feel the pressure to make a decision regarding RCM is actually a threat to their job stability*
  • 87% of small and community hospitals anticipate declining to negative profitability due to diminishing reimbursements, uncovered collections and underutilized or inefficient billing and records technology*

*Black BookTM Market Research survey on RCM

It’s Important to Find the Right Vendor

Selecting the right vendor requires due diligence to ensure the integrity, experience and compliance with billing rules and regulations you expect. Whether you’re interested in outsourcing or co-sourcing (outsourcing some elements), carefully review each vendor, rate them against your required criteria and provide insights and recommendations to ensure you will be capturing the full value for services rendered.

Advantages of Outsourcing or Co-sourcing:

  • Access to trained revenue cycle personnel
  • Alleviate overhead of hiring full-time staff to provide relief to your bottom line
  • Train-the-trainer—educating your staff along the way in a co-sourced arrangement
  • Your staff will have more time to focus on the myriad of other revenue cycle project demands

Disadvantages of Outsourcing or Co-sourcing:

  • Cost – long-term cost of outsourcing is greater than the short-term investment of updating current RCM software and education of staff
  • Quality – few quality control metrics typically exist in agreements from outside, third-party consultants
  • Control – outsourcing causes a potential loss of control of RCM operations

Obtain an Independent Vendor Review
Already have a vendor? How do you know whether you’re getting what you paid for from your vendor? It’s important to evaluate whether your vendor is meeting performance expectations against the scope of your contract. An independent review can determine whether your vendor is adhering to your hospital’s billing policies and procedures as well as third-party payor regulations.

Latest Insights

September 19, 2018
The IRS has started sending out Letter 5699 asking businesses to verify if they should have filed Forms 1094/1095-C. These forms are required for all ALEs.
September 18, 2018
As the largest tax reform legislation in the past 30 years becomes reality, it is important to stay up-to-date on planning opportunities and how reform may impact you and your business. Our Tax Reform: Practical Insights examples aim to break down…
September 18, 2018
Get ahead of tax season with the Eide Bailly Tax Planning Guide. A supplemental strategy guide to help guide year-end and make the tax laws work for you.
September 18, 2018
The SCOTUS Wayfair decision has prompted a new focus on state and local tax compliance. The decision to register, report, and comply is important.
September 17, 2018
When an IRS Letter 226J is received, it is important to respond timely and with accurate information to eliminate, abate or reduce IRS calculated penalties
September 17, 2018
Firm News
Tom Goekeler, partner at Eide Bailly LLP, has been named chief practice officer of the South Central region, which currently covers our Oklahoma and Texas offices.
September 17, 2018
The recent US Supreme Court decision that overturned Quill in the South Dakota v Wayfair case has many states making or considering law changes related to sales tax compliance for out-of-state sellers.
September 12, 2018
The Tax Cuts and Jobs Act, signed December 22, 2017, significantly impacted inbound tax planning. Non-U.S. taxpayers doing business in the U.S. will need to consider the new tax laws.
September 12, 2018
Applications have made a huge impact on our lives, allowing us to keep track of the complexities of our day-to-day and save for our futures. But it’s important to understand where we are laying our trust.