As per a survey conducted by Black Book Market Research, several hospitals have adopted outsourced RCM services in the last two years after carefully identifying and assessing the core competencies of their organizations. Many hospital leaders have recognized that RCM isn’t their organization’s core competency and moved support of large end-to-end outsourcing firms for RCM so that they could focus on patient care and clinical service delivery. The survey covered 2,250 CFOs, CIOs, business office managers, technology and financial service staffers for their outsourcing vendor perceptions and user experiences. Around 445 hospitals from 40 states were there in the poll.
The survey says that healthcare industry can really utilize the economies of scale provided by the RCM outsourcers that can handle high volumes of encounters. It was found that 83% of hospitals with more than 200 beds that chose to outsource all or most of their RCM operations saw revenue increases of 5.3% year-to-date 2014. They attribute this to a turnaround in post-outsourcing RCM proficiencies. Meanwhile, 78% of hospitals with less than 200 beds and were new to outsourcing RCM reported to have average revenue increases of 6.2% in 2014. It is estimated that the market potential of RCM outsourcing is 7.7 billion dollars with a projected growth to nearly 9.9 billion dollars by mid 2016.
Apart from cost-effectiveness and the opportunity to concentrate on core competencies, RCM outsourcing provides several other benefits such as:
- Since the data collected within revenue cycle is evaluated regularly on the basis of a recognized standard of service delivery for all outsourcing companies, there will be unbiased monitoring and measurement of compliance and information protection.
- Highly-experienced and trained healthcare revenue management personnel are employed in professional billing companies to accurately record, safe-keep, and dispatch medical policies, claim settlements and procedures and they are equipped with advanced facilities, applications, and systems.
- Since these companies can accommodate 24/7 service, the needs of both staffs and patients can be addressed immediately.
Tips to Assess RCM Vendors
You can enjoy the benefits of outsourcing only if you find the right RCM vendor and here are some tips to assess a vendor.
- Whether the vendor charges monthly fees or a percentage of the total amount collected, ensure that the vendor mentions everything included in their fees and is transparent about the extra charges for other services provided.
- If you are satisfied with the cost, ensure that performance worth that cost is guaranteed. Ask the vendor to explain how they will solve the issues identified during the discovery phase and what their success rate with previous clients is.
- Find out what technology they will provide and how they are going to interface with existing systems. Ask them to describe their plans to meet the technical requirements of coming mandates such as ICD-10, or prevailing care models such as Accountable Care.
- Since a practice may want outsourced services only for a short time to get through a growth or transition period, it is very important to check whether there is an option for short-term contracts. If that option is not available, the practice may lose money if it decides to terminate the contract early. The practice should also thoroughly check the termination clauses and associated penalty, if any.
- Make sure the employees within the company are certified and familiar with the industry best practices while keeping abreast with the latest developments in the healthcare field.
- The company should provide their clients with risk assessments and explain what security measures they adopt to deal with sensitive protected health information and remain compliant with the Health Insurance Portability and Accountability Act (HIPAA).
- Vendors should provide their reports regularly, more frequently at the beginning of the relationships which should include at least an analysis of accounts receivable, the percentage of accounts in receivable for 60 days, 90 days or 120 days, and a breakdown of payers and providers with accounts in each category. Vendor reports should also provide the who and why details of claim denials and the lag time between date of service and the date when the bills are send out.
- Check out where to and how often money is transferred (whether in real-time or through direct deposit).