A healthcare service provider faces many challenges in terms of its revenue cycle management. This entire cycle includes everything from patient intake, patient insurance eligibility verification, correct coding of claims, claims tracking, and the collection of co-pays, to following up on denied claims, and balancing accounts. To be successful in today’s environment – with rapidly evolving reimbursement structures, ever-changing policy mandates, and progressively more complex billing requirements -medical practices need to invest in highly-trained teams, capital, and systems just to stay afloat.
Luckily for them, working with a revenue cycle management (RCM) vendor allows providers to leverage their capabilities and resources to ensure their practice’s financial health is sound.
In fact, a recent Black Book Market Research survey found that 80% of the hospitals it surveyed were considering outsourcing services for their RCM by 2019.
Importance of Revenue Cycle Management (RCM) Systems
RCM systems are important for the healthcare sector simply because they streamline the entire lifecycle of a medical billing service provider, right from booking their patient’s first appointment through to verifying whether they have insurance coverage, and finally, collecting payments for the services provided.
It is essentially a way by which to bridge the gap between the clinical side and business side of healthcare. RCM helps improve the turnaround time taken between offering services and actually receiving payment for it, by interacting with accounting systems, electronic health records, administrative data, claims processes, billing records, and much more.
A 2019 McKinsey and Company stated that a proper workforce streamlining will help the US healthcare industry bring down a projected USD550 billion expenditure to USD280 billion.
By taking care of the entire process, healthcare providers can reduce their administrative costs while also improving their patient’s overall service experience. Efficient revenue cycle management can also save time and effort by minimizing the number of claims that are denied and need to be re-submitted, and by enabling patients to complete payments for their services online, rather than in-person.
Other important administrative tasks like upcoming appointment reminders, balance and payment reminders, and following up with insurers when a claim is denied or delayed, also fall within their jurisdiction. And finally, revenue cycle management eliminates the need to resubmit claims by enabling the front-end staff to enter all the required patient data correctly the first time around with carefully designed workflows.
Sage Growth Partners reported that healthcare organizations lose about USD125 billion every year owing to underpaid and unpaid claims.
Consequences of Choosing a Substandard Vendor
There are some serious consequences to choosing a poor RCM vendor or partner. If staff do not receive the proper training required with the software to conduct accurate medical coding, enter relevant information in all the required fields, or input accurate data, mistakes will be made that will cost you enormously. If you choose a substandard vendor, you may also be exposed to poor workflows riddled with missing charges, redundant processes, and increased errors that will ultimately result in more delays in getting paid or not getting paid at all.
Why Should you Outsource RCM Services to a Vendor?
Absence of proper technological infrastructure and domain-specific knowledge hinder a seamless and accurate execution of RCM services which ultimately results in serious revenue leakage.
Here’s a look at some of the top benefits you will receive by relying on RCM service providers.
Workforce optimization– RCM service providers delegate experts who have the required experience to execute the routine RCM services such as reimbursements, patient registrations, billing, and patient check-in/check-out. This will allow the organization the liberty to trim the existing administrative workforce which not only reduces the management burden but reduces the overall operational expenses posted by a healthcare organization.
A McKinsey report stated that about 36% of tasks executed by registered nurses in inpatient units can be safely executed by non-RN professionals.
Reimbursements on time– Handling core medical functions along with the routine RCM services wears off the existing workforce which leads to inefficiencies in the form of late or missed reimbursements. Professional billing agents are commissioned to execute RCM services on a round-the-clock basis to handle functions that include collecting and verifying all the details pertinent to patient enrolment, a dexterous documentation of diagnosis and its subsequent treatment, and apply the appropriate medical codes accordingly. Their expertise and experience leaves room for little to no errors, thereby providing a crystal-clear and accurate details of dues settled at regular intervals.
Uninterrupted cash flows: Medical billing functions being one of the core competencies, RCM providers will strive to keep themselves updated with the latest technological innovations to boost their proficiency in billing functions. Leveraging technologies expedites the entire process-flow of document receipt from physicians, medical billing, insurance verifications and AR collections. This shortens the period of being reimbursed as well as the reduced chances of errors reduces the room for errors that can potentially hinder reimbursements.
Critical Questions to Ask a Potential RCM Vendor
You should always do some prior research (read: internal needs assessment) into what your organizational challenges might be before ever approaching or shopping for potential RCM partners. Taking an in-depth look into where your organization is struggling can help you prevent choosing the wrong fit for your revenue cycle needs.
Once you have established where your revenue cycle needs lie, you can begin exploring the RCM solutions out there. But that, in itself, is not enough. It is also imperative that you ask the necessary questions that you will need answered while you are still in the exploratory stage. It is only once you have asked the right questions that you can safely move onto actually comparing your revenue cycle management service options.
Here are some questions we put together that might help you determine which vendor makes the cut during the revenue cycle management process.
- Do you have the necessary capabilities to interface with our EMR, labs, hospital systems, etc?
- Do you offer training during the onboarding process?
- What is your denial management strategy?
- What percentage of your denied claims are successfully appealed?
- What does your pricing model look like (i.e. pay-per-use, subscription model, percentage of collections, etc.)?
- Do you manage patient calls or inquiries on our behalf?
- Does your RCM solution come with important tools like access to patient portals, appointment reminder notifications, or electronic statements?
- Are certain processes, like insurance eligibility verification, automated?
- Do you follow up on denied claims?
- Is there a minimum dollar amount required to initiate follow-up efforts with the insurer?
- Are you open to considering a performance-based fee structure?
- Does your RCM solution come with transactional fees for tasks such as insurance eligibility verification and electronic claims submissions?
- What key performance indicators (KPI) do you track to ensure that our organizational goals are being met (i.e. turnaround times, patient wait times, first pass rates, patient AR, adjustment yields, error rates, etc.)?
- Do you provide dedicated account managers who are easily accessible and able to resolve issues quickly?
- Will we still have access to patient records, patient accounts, medical reports, claims, and other revenue cycle activities with your RCM solution?
- What policies do you have in place in the event that we decide to move to another service provider? How would you handle the transfer of data and accounts in that scenario?
Going through the entire list of questions provided has hopefully helped you figure out exactly what to look for in the right revenue cycle management vendor. By deeply probing every facet of their service offerings and operations, you minimize the risk of you ever regretting your decision in the future because you did your homework, and thoroughly at that.