As the healthcare industry works to adapt to new technology, outsourcing revenue cycle management has become an increasingly popular choice. A 2015 survey by BlackBook research found that 83 percent of hospitals outsource some of their accounts receivable and collections.
In a statement on the survey, BlackBook managing partner Doug Brown explained that providers feel an immense pressure to optimize their revenue cycle management in the transition to value-based care.
Making the right considerations
However beneficial it is, more healthcare finance leaders are cautioning providers to not rush the decision to outsource. In an article published in Healthcare Finance News, John Kerndl, the senior vice president and operations chief financial officer for LifePoint Health, explained the many considerations he and his team made before outsourcing.
Kerndl said he wanted to make sure outsourcing allowed his administrative teams to focus on other tasks, like strategic planning and ensuring patient and employee satisfaction. Freeing up administrative resources for other tasks can add help providers quickly recoup the cost of outsourcing. He also needed to make sure the system could maintain its regulatory and compliance efforts.
"There are a lot of rules around how you bill and collect," Kerndl said. "It changes all the time. Instead of trying to stay on top of 50, 60 business practices to make sure they're doing everything properly, it just became much easier to be able to make sure that we were operating our revenue cycles in a compliant manner."
The size of a system also plays a role in the decision. According to Kerndl, bigger systems should have an easier time switching to outsourcing revenue cycle, giving them a competitive edge in the process. Frank Danza, the senior vice president and chief revenue officer for Northwell Health, told Healthcare Finance News that outsourcing allowed the system "to be a part of the national revenue cycle model with greater scale and greater information."
Smoothing out the complications
Both Kerndl and Danza stressed how complicated the transition can be, though. Financial leaders in the system need to make sure the hospitals and outsourcing vendors understand their roles and responsibilities. Kerndl said LifePoint accomplished this by setting up a series of meetings to discuss metrics and iron out any issues.
That's why it's important to choose the right vendor for outsourcing. Jim Lazarus, the managing director of strategy and innovation in revenue cycle solutions at The Advisory Board Company, told Medical Economics that the right vendor will bring certain advantages to a healthcare system.
"They have the ability to field operations that leverage technology and dedication of functions," he said, according to the source.
Because you'll be frequently working with the organization in complicated transitional processes, you'll want a reputable vendor with state-of-the-art technology to ensure it goes smoothly. Overall, select a vendor that offers you assurance that you're putting your operations in the right hands.
For more information about outsourcing your revenue cycle management, contact Professional Medical Services today.
