New research shows that more and more healthcare providers are opting to outsource revenue cycle management (RCM) to vendors. Many find this strategy to be successful, while others have found that RCM vendors aren’t what they were looking for. Many likely fall somewhere in the middle – finding that outsourcing a portion, and handling other activities in the revenue cycle in-house, is the best approach.
KLAS Research spoke with 61 primary and specialty care clinics and found that many are outsourcing RCM to vendors, and cited various reasons for doing so.
First, recent changes to insurer processes and requirements have resulted in healthcare providers needing to do additional work. Providers are struggling with increased A/R days, denials for claims and authorizations, processing appeals, and receiving guidance from insurers on patient coverage.
Meanwhile, providers have indicated that insurers are adding to the complications, implementing confusing claims submission protocols. They’ve also reportedly been increasing prior authorization requirements, causing services that were previously covered to be denied.
Providers are also seeing more Medicare and Medicaid patients. The result has been lower reimbursement, as well as more claims sent to collections due to high premiums, deductibles, and out-of-pocket maximums.
But perhaps the biggest challenge healthcare providers have faced since the worst days of the COVID-19 pandemic has been staff shortages. These have also added to the RCM problem significantly, as it’s been difficult for office workers to keep up with key tasks. Two-thirds of survey respondents said that these challenges have been a factor in their decision to outsource RCM. While hiring outside vendors can be expensive, the costs pale in comparison to recruiting, training, and providing benefits for new employees.
The RCM Outsourcing Dilemma
As with any vendor, a thorough vetting process is crucial. KLAS found that some providers just aren’t thrilled with their RCM vendors. Those who noted dissatisfaction reported their vendor not being ‘invested in their success’ or not providing adequate feedback and guidance. Providers are looking for partners who can educate them on best practices for RCM and provide long-term strategies for improving revenue cycle workflows.
Healthcare providers indicated that they also prefer to work with fully domestic vendors so that their work hours line up and there aren’t potential language barriers. Two-thirds of respondents said that offshoring services would impact their decision to stick with or leave a vendor.
Managing RCM In-House
Rather than seeking out a vendor that only focuses on RCM, providers may find that investing in software that handles RCM is a better option. According to a previous report by KLAS and Bain, RCM solutions topped the list among software investment categories, given their ability to improve cash flow and reduce labor-intensive workflows. The RCM software space has exploded in recent years, enabling providers to collect payments via text, automatically with a card on file, and before the service even occurs.
Healthcare providers can significantly benefit from an all-encompassing solution like Practice Management Bridge. Rectangle Health’s platform relieves providers of RCM burdens by automating workflows that streamline and even eliminate manual processes. Practice Management Bridge gives patients multiple, convenient payment options (Text-to-Pay, payment plans, online and mobile payments, Patient Financing, etc.), while also eliminating other points of friction in the revenue cycle by providing tools like online scheduling and appointment reminders. And the platform is fully supported by Rectangle Health, so any time a provider has a question, all they need to do is pick up the phone, send an email, or start a chat.
Practice Management Bridge can make RCM frustrations a thing of the past, as well as streamline multiple other processes. That way you can focus on providing your patients with the best care possible. Learn more about Practice Management Bridge here. And for more insights on RCM, be sure to check out our e-book, Rethinking Revenue Cycle Management.