The revenue cycle management process is one of the most difficult mechanisms to handle for healthcare providers. This is because medical billing and coding can be difficult to handle if you were to rely on your own devices. This is because of the complexities involved from managing net collections and ensuring that coding standards are being followed to handling denial management and ensuring that you can scale along with growing business volumes.
Because most of these processes require expertise, it is often left to third-party RCM partners to handle. Not only do these partners have the right infrastructure in place to manage huge claims volumes, they also have certified professionals who can help you with medical coding and billing in general.
Outsourcing to these partners can be hugely beneficial, however, you need to know that they will be able to do a good job by considering a variety of factors. To see just how well an RCM partner can meet your medical billing and coding requirements, it is important that you revise a few critical factors before choosing one to go with.
These factors can be divided into primary factors like having denial management strategies and providing detailed reports and secondary factors like low costs.
Let us explore both the primary and secondary factors in greater detail:
Primary Factors to Consider When Choosing a Third-Party RCM Partner for Outsourcing
Providing a Performance Guarantee to Ensure That All KPIs Are Duly Met Before They Are Paid for Their Services
It is important that you start off vetting third-party revenue cycle management companies by whether they offer performance guarantees or not. These can come in the shape of performance-based fee structures, which provides the revenue cycle management partner with incentive to outperform and exceed established key performance indicators.
If a third-party RCM partner is certain that they can deliver on their promises, a performance-based fee structure will work for them. This way, they only get paid when certain benchmarks have been reached or certain KPIs have been met. For example, if claims accuracy remains consistently over 98%, they may be entitled to higher pay as they have proven that enlisting their services has driven home much desired business results.
You must investigate the key performance indicators that they track to ensure that organizational goals are being met.
These indicators may include adjustment yields, turnaround times, first pass rates, patient wait times, patient AR, error rates, etc.
The right RCM outsourcing partner will meet or exceed established KPIs to give you a good ROI.
Having Comprehensive Denial Management Strategies in Place
One of the most important functions that outsourced healthcare RCM partners have to take care of is denial management.
Some studies have stated that insurance carriers reject or deny 1 out of every 4 medical claims on the first submission, which costs healthcare providers millions in lost revenue every year.
As a result, claims denials cost healthcare providers about 5% of their net revenue annually.
Denied claims basically represent unpaid services or lost/delayed revenue to a healthcare provider. Because claims denials are avoidable, you need to ensure that the healthcare revenue cycle outsourcing partner you decide to work with has their denial management processes under control. Not only do these RCM partners have to identify and correct the root causes of all these claims denials, they also have to improve your clean-claims rate.
By tackling claims denials with effective strategies, these partners have to be able to reduce your cost of managing denied claims and the resulting administrative burden on your staff. They can do this by streamlining workflows for greater efficiency, improved cash flow, and faster appeals.
RCM partners that lack a focused strategy for effective denial management are more likely to see denials unfavourable resolved, or even worse, left to languish and ultimately be written off as bad debt. It is imperative that you look into the partner’s denial management track record to see whether they would be a good fit for you.
Ensuring That All Coders and Billers Have the Right Certifications
When looking to partner with a hospital revenue cycle management partner, it is important that they have the right certifications under their belt. Their medical billers and coders need to be equipped with the right training and credentials so that they can do the work effectively and not risk non-compliance with industry regulations.
Despite software being available for effective coding assistance, a knowledgeable coder is needed to enter data accurately and follow-up on any discrepancies with hospitals, clinicians, and insurance companies. These medical coders must have the right education and training to be able to perform their duties with speed and accuracy.
Certifications that you must look for include ONC-ATCB, EHNAC Accreditation, Meaningful Use, Certified Procedural Coders, and Master’s and Bachelors degrees in Healthcare Administration and Management.
Partners should also be familiar with the American Association of Healthcare Administrative Management, the Healthcare Financial Management Association, and other such organizations and best practices. By having working knowledge of these important industry authorities, you can ensure that you have knowledgeable representatives working with your establishment.
Physicians that try to do their own billing and collections are known to lose up to 13% of their billing to bad debt write-offs.
Medical billing is just as complex as medical coding in terms of all the legal regulations, HIPAA compliance issues, frequently changing CPT codes, and Medicare compliance issues that surface.
That is why you need experts that have the proper certifications to handle all these complex requirements efficiently.
Confirming That Scalability for Growth Is a Priority for Them
Before you sign on with a third-party revenue cycle management services partner, it is important that you find out whether their resources are scalable. If their resources are scalable they can help you take on greater claims submission workloads as business volumes continue to fluctuate. During off seasons you can also reduce the number of resources you keep on, which can help you cut operational costs by a fair amount.
It is critical that they have enough manpower available to help you during peak seasons because without additional labour, you are losing out on revenue you could have earned. When hunting for a reputable RCM partner, look into partners that have hundreds of personnel available to scale up operations with. This way you can rest assured that your medical claims will be generated and submitted no matter how heavy the workload or how great the business volumes you have to face.
Partners who can scale up their operations with ease will help your business grow and take on additional revenue without any issues. Select a partner that adapts well to industry changes as well your own growth. The idea is that you want to be able to respond to changing requirements while also optimizing the number of resources you have onboard at any given time. Be sure to ask about their plans for the future as well.
This way you can figure out if they have demonstrated a history of growth, reinvested in their solutions, and have a concrete vision for where they want to be in the next 5 to 10 years.
Because your practice is making a substantial investment in both resources and time, it’s critical that you choose an RCM partner that will serve you well for many years to come.
Making Detailed Reporting an Indispensable Part of the Service
When looking for the right revenue cycle management solutions, it is important that you choose a partner that prioritizes detailed reporting at all stages of the RCM process.
This is because healthcare executives, CFOs, collections managers, administrators, and controllers all need to use KPIs to determine the financial stability of their respective departments.
Key performance indicators and metrics play a critical role in a healthcare provider’s financials as accurate and comprehensive reporting helps an organization stay profitable.
Any RCM partner should be able to provide robust reporting services on a regular basis so that the organization can monitor and track its financials and billing processes in real-time.
An outsourced physician revenue cycle management partner should be able to provide detailed reports that can be customized as per the department’s requirements. This way all management information, financial data, and operations metrics can be evaluated to see whether your team is meeting its benchmarks.
Having accurate and detailed reporting available to you is also important when trying to assess how well the RCM partner is adding value to your processes and operations.
Reports should, at a minimum, include an analysis of accounts receivable and a breakdown of providers and payers with accounts in each category. They should also track the percentage of accounts in receivable for 60, 90, and 120 days.
Reporting should also provide a breakdown of the cause of claims denials, the net collection rates, and the lag time between when the bills are sent out and the date of service.
By covering all these aspects of the business, you can evaluate the performance of your healthcare practice and figure out how to better generate revenue and keep claims denials at a minimum.
Secondary Factors to Consider When Choosing a Third-Party RCM Partner for Outsourcing
Providing Services at a Reduced Cost Compared to an Offshore Partner
When you outsource RCM services to third-party partners you will want to know the cost of outsourcing your requirements to see if in-house billing might be more cost-effective. It is important to remember that cost-savings is only one reason to choose a third-party partner for RCM.
These partners most usually charge a small percentage of your monthly revenue – anywhere from 3% to 9% of net collections.
You will need to ask what specific services are included in the monthly percentage so that you have a good idea of what services have been covered by them already. If they are willing to accept performance-based fee structures, then you can negotiate different criteria that will be assessed to determine how much they will be paid every month.
For example, if they are able to double net collections once hired, you can pay them a percentage of the total amount collected to keep them striving for greater numbers. This way performance is what is being monitored, measured, and optimized so that you are not just paying a simple subscription charge every month to benefit from their services.
Ensuring Enhanced Security Mechanisms to Mitigate Risks
Revenue cycle management partners that are among the best in the industry will have security measures in place to keep EHRs and payment data 100% secure and confidential at all times. According to recent studies, however, most healthcare organizations do not have the procedures or resources in place to check a partner’s security measures.
About 58% of organizations surveyed could not even establish whether the partner’s security positions and safeguards were sufficient enough to prevent a data breach.
Another 60% of respondents revealed that their companies do not check the privacy and security practices of third-party partners, even though they continue to share sensitive and confidential information.
It is critical that you investigate the security measures that the partner has in place to ensure that your patient data is safe from cyber threats and attacks. Researchers have found that at least half of the survey participants confirmed that their organization experienced a data breach caused by a third-party revenue cycle management partner.
This being the case, it is more important than ever before to enquire about privacy and security measures they take to mitigate risks for your practice. RCM companies should also be able to provide you with adequate risk assessments and explain which measures they take to stay compliant with HIPAA requirements.
Handling Complete Patient Engagement to Better Manage Cash Flow
A hospital revenue cycle management outsourcing partner needs to be able to deal with delinquent accounts and keep your patients in the loop so that payments come in more consistently. Many RCM companies will send patients their statements directly so that they know how much they owe at all times.
Some companies even transfer unpaid accounts to collection agencies automatically. It is important to work with an RCM partner that engages with patients directly so that all their queries and concerns are answered so that patient collections come in on a regular basis.
You should look into asking these outsourcing partners how long they typically wait to collect payments before transferring unpaid balances to a collection agency. You should also ask whether they have patient portals included in their range of services and how much it would cost if you did want that feature available for your patients.
This is important because a lot of the time patients want to be able to login to a patient portal at their own convenience. That way they can pay off their balances without having to interact with the healthcare provider directly. It is important that you find out whether staying engaged with patients and keeping them abreast of what they owe is something they handle.
The probability of getting paid for the medical services provided only increases when there is someone following up with the patient once they leave the medical facility. If you want to be sure that you benefit from a greater net collections rate, you will need to find a revenue cycle management partner that handles patient engagement for you.
Choosing a third-party partner to handle your revenue cycle management requirements is not easy. Not only do they need to have resources available with the right certifications, they also need to be able to provide detailed reports to help you boost your financial performance almost immediately.
To add to that, ensuring that they have a large enough talent pool to help you scale along with growing business volumes is also critical to your operations. Before you choose to outsource your requirements to an RCM partner, it is also important that you evaluate their denial management strategies and ensure they handle patient engagement. This way you can make sure revenue keeps flowing in at all times and that net collections continue to grow.
Who We Are and Why We Are an Industry Authority?
This article is brought to you by MedBillingExperts, an enterprise-grade revenue cycle management solutions provider. With over a decade of experience in providing end-to-end solutions for all our clients’ revenue cycle management requirements, we are able to break down different RCM processes and create better ways to handle them. We provide comprehensive healthcare revenue cycle services that ensure that healthcare practices all across the US are able to bring in greater revenue and cash flow by trusting our expertise and advice.