Providers regularly look to outside revenue cycle partners to help manage and improve revenue cycle operations. This is for good reason, as revenue cycle processes have become increasingly complex due to “stringent regulations, financial pressures, & staff shortages.” According to industry experts, outsourcing the revenue cycle is a trend that will continue for some time. A report by Grand View Research indicates that in 2023, revenue cycle management outsourcing reached nearly $156 billion—a number that is expected to grow at a CAGR of 10.18% by 2030.
When choosing which revenue cycle activities to outsource, providers should strongly consider back-end processes like billing, collections, payment processing, and denials management. This segment of the revenue cycle is fraught with inefficient, manual, error-prone workflows that can inhibit productivity, hamper cash flow, and negatively impact the patient experience and a provider’s bottom line.
Benefits of back-end revenue cycle outsourcing
One of the most significant benefits of outsourcing back-end processes is increased productivity. RCM partners act as an extension of the provider’s team, providing all the same benefits without the need to hire and train additional staff. This improves overall productivity and relieves stress on existing team members, which can reduce burnout and turnover.
Another benefit of outsourcing is increased cost savings that result from reducing overhead and improved cash flow. Because outsourced partners typically have greater financial resources to hire seasoned revenue cycle professionals, they have the expertise needed to stay on top of payer, federal, and state regulations, which helps reduce errors, denials, and lost revenue. It also enables providers to reassign existing staff to focus on more strategic or patient-facing tasks.
In addition, outsourced partners have the ability to quickly scale operations as a provider’s needs change. This ensures optimal productivity and maximum cost savings.
Key partnership essentials for successful outsourcing
Choosing the right outsourced partner takes time and in-depth research to identify the best fit for the provider’s organization and unique needs. The following are essential capabilities to look for when choosing a successful revenue cycle partner.
- Clear communication. The best vendors are those that maintain open lines of communication and set clear expectations. They should have established communication channels that enable quick action when an issue is found. Rather than waiting for regularly scheduled meetings, they should act to proactively address problems before they escalate.
- Performance analytics. Comprehensive data analytics is the foundation of a successful partnership, so it’s vital that providers choose a partner that defines key performance indicators (KPIs) and industry benchmarks to measure the success of the relationship. Analytics are also crucial for continuous improvement and should be accessible at any time by both parties to assist in faster, more effective decision-making.
- Cultural alignment. When partners do not align with an organization’s values, goals, and objectives, they tend to put their own interests above those of the other party. This can cause friction, poor productivity, and a suboptimal return on investment. Goals and objectives should be established and agreed upon before the contract is signed and should include expectations for protecting the patient-provider relationship.
- Technology integration. AI and its umbrella technologies, like robotic process automation (RPA), can significantly improve revenue cycle processes by automating many manual, error-prone workflows. However, to achieve the most benefit from these technologies, they must integrate seamlessly with the provider’s systems without needing significant IT resources to manage.
- Data security and compliance. The number of hacking and ransomware events and data breaches has skyrocketed over the past few years, putting provider organizations at significant financial risk and patients at substantial risk of personal and financial harm. Therefore, ensuring your RCM partner adheres to strict data security and regulatory compliance standards is critical. Providers should ask potential partners to provide comprehensive cyber security and compliance profiles. This should include audit requirements and schedule adherence, completion of NIST audits, HIPAA compliance, HITECH compliance, SOC2 certification, and PCI compliance.
Next Steps
Nearly two-thirds of providers surveyed said they plan to outsource all or a portion of their revenue cycle, and for good reason. Since back-end revenue cycle processes are so closely aligned with both short- and long-term financial viability, providers must do all they can to ensure those processes perform optimally. Outsourcing is a great option.