Revenue cycle management (RCM) in the healthcare industry has become the most sought-after thing. As healthcare providers are fraught with unpaid bills, payment denials, billing errors, ever-changing requirements, revenue leakage, and the inability to reform the financial cycle.
According to a study ‘the revenue cycle management market is projected to reach US$ 216,990.6 million in the coming few years. The RCM solutions are in huge demand in the healthcare sector due to its immense impact and value that it brings to the healthcare organizations. The healthcare industry has been drastically challenged by an increased cost of the services, decreased revenues and the system shifting to patient consumerism. This is putting huge stress on the care providers as they are struggling to implement new technologies, revamped infrastructure and focusing on improving the patient experience.
More than 70 percent of patients are frustrated with the current billing system and they are not able to understand the complexities of the system. Surprising billing or out-of-network payments are some of the issues that are troubling patients or healthcare consumers. At the same time, the inability to pay is adding to the dilemma, when over 137 million Americans are struggling with medical debt. This is causing unrest among healthcare consumers and they are more concerned about the expected bill and the explanation of benefits.
As the healthcare providers are transforming their processes to deliver value-based care, it has become immensely important to implement an RCM system that can bring transparency to their processes with technology-intensive RCM automation tools and capabilities to accurately report financial data.
During these heightened financial stress, healthcare providers want their RCM processes are optimized, efficient and productive. The RCM system must be capable of meeting regulatory requirements as well. To meet all these requirements, healthcare providers seek services from professional RCM solution providers.
RCM comprises a set of frond desk and back-end processes which includes administrative tasks as well as clinical functions. Some healthcare providers only choose to outsource a limited range of tasks, such as medical billing and coding, claim submission and payment follow-ups; while others move on to outsource IT administration and transcription as well. However, the decision to outsource depends on the capability of the healthcare facility to manage the resources.
Here are a few reasons to outsource your revenue cycle management:
To Increase Profitability
The first and the most important reason for outsourcing revenue cycle management is that healthcare providers want to improve their profitability. RCM vendors are experts in boosting the revenue collection process and have onboard specialized resources that can achieve it in a short while. Moreover, administrative costs, operational expenses, salaries, and rents have decreased the overall revenue of the providers. Outsourcing not only saves cost and time but also increases profits.
Decrease Administrative burden
When the RCM is outsourced to a trusted company, the healthcare provider can free up the resources from the administrative tasks. Providers can utilize these free resources to uplift their service standards. RCM is a complex process and engages the resources of a provider at various levels. If you are managing revenue cycle in-house then you are handling many administrative tasks manually, such as:
- Paper-based record of payments and transactions
- The manual patient registration process
- Claim preparation and charge entry
- Account receivable and payment follow-ups
- Payment posting
- Denial management and appeals
The administrative burden would affect your performance. For instance, if your managing RCM in-house:
- Your staff would be making lots of billing and coding errors
- There would be delays in claim preparation and submission
- Your staff won’t be making targeted collections
- There would be lags in denial management
- Lack of financial insights and reporting
Outsourcing RCM would set you free from all these administrative tasks that are consuming time and energies.
Easy Compliance to Standards
Outsourcing makes compliance with industry standards easier. Healthcare is a volatile sector and ever-evolving regulations make it difficult to comply with. Either it is the adoption of new ICD codes, HIPAA compliance or conformity with insurance requirements; outsourcing makes it easier to embrace the change. By outsourcing it becomes the job of your outsourced RCM partner to stay updated and keep your system in compliance with the updated standards. If you are handling RCM in-house, it would indulge you in the up-gradation of resources and providing adequate training to your staff. Outsourcing sets you free from the hassle of training and compliance.
However, there are various concerns of vulnerability to private data when you are outsourcing and providers remain concerned over the hidden charges. Some RCM vendors use software that does not integrate with the pre-loaded software applications of the provider. This is why a healthcare provider must carefully choose the RCM solution provider and must make these queries upfront.
There is no doubt that by choosing the right RCM partner, you can not only save costs and time but can also increase your profitability. Revenue cycle management is becoming refined and more sophisticated and is helping healthcare organizations eliminate errors in their system, minimize complexity, increase in productivity and profitability. This is why healthcare providers must outsource RCM to a trusted partner.