The increasing demand for value-based care is putting a growing burden on healthcare providers. They are already grappling with declining reimbursements, heightened risks, and narrower profit margins while striving to enhance patient care. Consequently, healthcare institutions, both large and small, are compelled to reassess their revenue cycle strategies and explore novel approaches to engaging with patients, staff, and payers. To cope with these challenges, some providers and healthcare organizations opt to outsource their revenue cycle activities to reputed healthcare revenue cycle management companies. This blog highlights three key indicators that signal the necessity of outsourcing revenue cycle functions for your medical practice or healthcare institution. 

According to a recent survey by Black Book, 83% of hospitals outsource a portion of their accounts receivable (AR) and collections, while 58% outsource contract management and 55% outsource denial management. Among physician groups with ten or more providers, 68% outsource collections and/or claims management. Additionally, 38% of hospital CFOs report outsourcing some or all of their revenue cycle functions, and another 24% are contemplating this move. Decision-makers within healthcare institutions recognize that partnering with a medical billing company can yield numerous benefits, including increased reimbursement rates, improved cash flow, higher profit margins, and enhanced patient satisfaction. 

Here are three prominent signs that signal the need for revenue cycle outsourcing: 

Inefficiencies in Revenue Cycle Functions:

Inefficiencies encompass various issues, such as missing charges, difficulty distinguishing between billable and non-billable procedures, inaccuracies in patient demographics and insurance information, improper use of procedure codes and modifiers, challenges interpreting Explanation of Benefits (EOBs) and Electronic Remittance Advice (ERAs), and difficulties categorizing denied claims by reason. These inefficiencies often stem from a lack of skilled billing, coding, accounts receivable, and denial experts, insufficient training, and limited internal and external audits. The busy schedules of physicians can contribute to poor communication with the medical billing staff, exacerbating these inefficiencies. 

In-House Staffing Challenges:

Revenue cycle functions require specialized staff with expertise in medical billing, coding, and data analytics. Finding such experts poses a challenge for hospitals and physician practices, with approximately 31% reporting difficulties in filling open positions. Outsourcing can alleviate the recruitment, training, onboarding, and other human resource-related costs, allowing a medical billing company to hire and train representatives to enhance patient experiences, optimize revenue opportunities, and allow your organization to focus on its primary mission—delivering quality patient care. 

Lagging Patient Collections:

The shift toward value-based care means more patient responsibility, including high deductible health plans and copayments. Collecting payments from patients can be more costly and time-consuming than securing payer reimbursements. Research indicates that collections from patient accounts with balances exceeding $5,000 are four times lower than those from low-deductible health plans. Overall, self-pay after insurance payments constitute a significant portion of inpatient and outpatient accounts receivable. In such cases, assistance with eligibility and benefits verification becomes crucial. A medical billing company can provide patient eligibility and insurance benefits reports before appointments and, if necessary, handle prior authorizations. 

If you observe these three signs in your healthcare institution, it is clear that revenue cycle outsourcing is the best choice. An RCM company can streamline your revenue cycle functions and enhance efficiency. Their team of expert medical billers and coders can assist with eligibility and benefits verification, prior authorizations, charge entry, claim submissions, payment posting, denial management, accounts receivable oversight, medical coding, and provider credentialing.