Despite the rising popularity of outsourcing revenue cycle management (RCM) practices, the healthcare industry has been slow in adopting outsourcing services. This is partly because of the preconceived notion that exists when it comes to outsourcing services to a vendor. However, many physicians want to continue their work in providing quality care to patients, and for them, some myths are worth debunking to chart a better path forward.
What is Revenue Cycle Management?
Revenue Cycle Management (RCM) is a critical process in healthcare that encompasses patient insurance verification, getting prior approvals, managing claims processing, denials management, payment posting, and revenue generation. Given the complexity and ever-evolving nature of medical billing, and the obvious benefits of outsourcing, some providers are thinking about hiring a vendor to offshore their RCM practices to increase efficiency. However, the existence of some myths prevents many healthcare sectors from reaping the benefits of outsourcing. Well, the blog aims to debunk these myths with evidence-based insights and help healthcare providers make informed decisions.
Myth 1: Loss of Control Over Your Strategies and Revenue Cycle Operations
A common pervasive myth is that outsourcing RCM means you might lose control over vital financial operations. Providers fear that vendors might focus on profits over quality or that they may not have real-time access to their data. But the reality is different.
Reputable RCM partners always emphasize transparency when it comes to managing revenue cycle operations. They provide healthcare institutions with secure access to financial data and performance metrics through comprehensive reporting dashboards. These reports help the providers understand KPIs such as days in accounts receivable, follow-ups on denials, collection efficiency, and so on. Furthermore, vendors often work as an extension of your current setup and provide tailored solutions that align with your practice’s goals. It allows providers to retain significant control over their revenue cycle while benefiting from the vendor’s expertise.
Myth 2: Outsourcing RCM Is Very Expensive
Another common myth is outsourcing RCM is more expensive than managing it in-house. Many providers think they can save a lot of money by keeping billing and collection practices within the institution. However, this perception is also based on a narrow view of associated costs.
Outsourcing can often lead to significant cost savings. For instance, vendors in this field bring years of experience, advanced technology, and industry best practices to manage the revenue cycle operations efficiently. Their expertise helps them in reducing costs associated with billing errors, denials management, etc. Providers can also save up to 20% to 30% on their costs by partnering with a technology-enabled vendor. Moreover, outsourcing can also help in enhancing net revenue collection rates by 23%. These findings underscore the potential benefits of partnering with a reputed RCM company.
Myth 3: Outsourcing RCM Leads to Data Security Risks
Data security is a serious concern for every healthcare provider and this concern stems from the fear of data breaches. However, this myth does not consider the rigorous data protection measures that reputable RCM vendors implement.
Reputed RCM vendors are committed to maintaining 100% data security by complying with HIPAA guidelines. The vendors take special measures and invest in secure data storage, regular audits, and employee training to prevent breaches. In fact, managing data security in-house may not be a suitable option for many healthcare institutions due to inefficient security infrastructure. This may leave the data vulnerable, leading to data breaches and loss of patient trust. But survey results point out, that providers that partner with third-party vendors with a strong compliance framework see fewer and less severe breaches.
Myth 4: Outsourcing RCM Leads to a Loss of Quality in Service
Another preconceived myth is that offshoring revenue cycle management services to an external team may lead to lower quality of service and lower patient satisfaction. They fear that external teams will lack knowledge, skills, and professionalism as compared with their internal team. However, this is not true at all. Hiring an external team for RCM services can give you access to expert industry knowledge that understands your business goals, values, and culture. They might help you to achieve areas that you might have ignored initially.
Myth 5: Outsourcing RCM Is Only for Large Healthcare Organizations
Many small or mid-sized institutions believe that outsourcing RCM strategy is feasible for only large hospitals or multi-specialty practices. This misconception ignores the scalability and customization options available in modern RCM services.
There are many RCM vendors whose services are designed as per the unique needs of the providers including small and mid-sized healthcare institutions. They provide flexible and unbeatable pricing plans, making outsourcing accessible and cost-effective for all practices regardless of their sizes. A report by the Healthcare Financial Management Association (HFMA) indicates that smaller practices saw an average increase of 15-20% in revenue within the first year. These showcase that even smaller practice providers can reap the benefits of outsourced RCM services.
Considerations You Need to Take When Outsourcing to An Offshore Vendor
If you are thinking of outsourcing Revenue Cycle Management services, there might be some areas that you should consider before hiring an external team. These areas are as follows:
- Ensure that you hire an external team who are well-versed in all facets of revenue cycle management. The vendor needs to tailor their solution using a proven, results-driven methodology whilst keeping the provider’s and patient’s benefits in mind.
- The team you are thinking of outsourcing should be compliant. In the changing healthcare landscape, it is pivotal to stay updated with various US regulations concerning medical billing. Complying with the prevalent regulation of revenue cycle management is non-negotiable.
- To ensure maximum reimbursements and cash flow, reduced AR and aging, decreased denial rates, etc. your external team should be highly knowledgeable about billing and coding regulations. They also need to conduct regular audits to identify inefficiencies with billing.
- The external team should use proven reporting tools to capture the essential data for managing the revenue cycle efficiently. They should also implement transparency by providing regular reports and KPI metrics to the providers.
RCM Workshop is a premier healthcare revenue cycle management company that provides unwavering support to provide end-to-end RCM services. Our team is skilled and experienced in this field, guaranteeing increased financial stability and enhanced patient satisfaction. Outsourcing your RCM services to us will ensure clean claims submission, reduced denial rate, and maximum reimbursement for your practice.
Final Thoughts
Outsourcing Revenue Cycle Management (RCM) services to an external team can bring numerous benefits including cost savings, improved patient satisfaction, enhanced control, and better data security. The myths that surround RCM may stem from a lack of understanding or outdated information. By debunking these myths, physicians can make more informed decisions and deliver quality care to patients instead of being burdened with administrative responsibilities.