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.

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