Should you follow the path of other hospitals and work with an RCM partner? It depends on what your current RCM process looks like. Here are five symptoms that indicate you should outsource:
1. You Can't Get Costs Under Control
If you consistently struggle to reduce your hospital's RCM costs, seek partners capable of identifying processes that stress your budget, such as:
- EHR redaction: Removing sensitive information from patient health records before sending them to payers.
- Utilization review: Reviewing the services the patient received and assessing which payers should reimburse the hospital for those treatments.
- Point-of-service registration: Gathering information from the patient regarding how he or she sustained an injury as well as confirming coverage.
Inefficiencies and redundancies may exist across these and other RCM steps, but your in-house staff likely neither has the time nor perspective to clarify and rectify such issues.
2. RCM Technology Can Do More Harm Than Good
Some RCM applications do introduce recognizable improvements, but there are also many that exacerbate hospital revenue cycle challenges.
For example, after you buy a license to use an RCM application, it may be up to you to train people how to use the software. In addition, the system itself may force your department into a workflow which does not complement existing operations.
The point isn't to avoid RCM technology altogether. Instead, you simply need to carefully assess which technologies are the best fit for your business. Here are a few questions to ask:
- Does the provider offer consultation in addition to RCM technology?
- Is on-site training a part of the agreement?
- Can the provider assist you with installing the software?
"For every complex denial, the average institution spends $5,427."
3. Workers' Comp Frequently Deny Claims
The tricky thing about managing workers' compensation claims is that each state has different fee schedules. On top of that, in-house A/R departments have to navigate jurisdictional payment problems and the manner in which workers' comp providers (WCs) structure policies.
As a result, many in-house teams don't know what sort of information WCs need to deliver reimbursement. Denials can add up quickly, too.
A survey from the American Hospital Association analyzed the average costs hospitals typically encountered when handling recovery audit contractor denials. The research found that for every complex denial, the average institution spent $5,427. That's more than twice of what it costs to treat a broken leg without insurance, according to Cost Helper.
4. Your Time-to-Collect Rate is Long
If it takes a long time for you to receive reimbursement from payers, you're not alone. Black Book found 96 percent of RCM leaders working in hospitals experienced inefficient billing processes. All of the survey participants maintained that they chose to outsource their RCM processes due to excessive time-to-collect rates and dropped collections.
RCM partners reduce time to collect by
- Understanding payers' legal obligations under statewide regulations.
- Validating patient information post-registration and pre-billing.
- Tracking claims metrics and spotting inefficiencies.
- Leveraging existing relationships with payers.
- Repricing claims based on fee schedules or contracts.
5. You're Launching a New Practice
Are you a physician opening up your own practice? All of the physicians who participated in the Black Book study said they were seeking to outsource their billing and claims management operations.
Why not manage it yourself? Treating patients is what you know best. As you probably know, receiving reimbursement isn't as simple as sending a bill to a payer.
This is especially the case in circumstances where a resident from another state gets into a car accident. Determining which auto carrier to bill isn't something you have the time to deal with, especially on top of all of the other demands associated with your business.
Outsourcing is usually a solid option, but be critical of the RCM partners you vet. Make sure the individuals behind their operations know how to handle the nuances you can't afford to tackle on your own.