Come As You Are: Outsource RCM Without Job Loss

Can the revenue cycle be outsourced without job loss? I think a lot of practice managers would say “No, it can’t be done.” But after looking at the numbers, I’d have to disagree. And I think they will, too.

There’s an opportunity to improve the entire revenue cycle management (RCM) process and to help current employees grow in other areas.

An outsourced RCM solution should become an extension of—not a replacement for—the office staff, which adds to the practice’s capabilities. (Full disclosure: I am president of TriZetto Provider Solutions, which offers a top-notch suite of revenue cycle management solutions.)

End-to-End Revenue Solution

RCM is the beginning-to-end solution that ensures providers get paid what they’re owed from a variety of payers. It seems simple enough, but the reality is there are multiple steps in the process. If it were just getting from here to there that would be one thing. But the process is complicated. And it takes time. A lot of it. And every step must be taken with each patient.

These are the essential parts of RCM:
  • Patient access
  • Patient financials
  • Claims management
  • Denials management
  • Contract management (To help with payer contracts.)
RCM is important to a practice because physicians spend 4-10 percent of their revenue trying to collect proper reimbursement from payers and patients, according to a Falcon Capital Partners report. Then they spend another 5-10 percent of their money on the administrative and management functions necessary to collect that reimbursement, the report notes.

Denials Management Overview

I’m going to focus on denials management, which is a big issue for providers. Taking a look at this issue it’s easy to see how the numbers reported by Falcon become so important. They are significant when you realize 55-65 percent of denied claims are never re-worked, according to HBMA Billing. There’s a disconnect somewhere along the line. I’m sure it’s not disinterest in collecting the money, but rather the inability of staff to find the time to do it. We’ve all run into this issue at one time or another during our careers. Today’s emergencies get resolved as yesterday’s work and the work of the day before becomes a memory. And never gets done.

An MGMA study found it costs about $25 to rework a denied claim. An article from the California Medical Association, using reasonable numbers for the estimate, calculated the typical practice could lose up to $180,000 a year because of denied claims. That’s too much money to ignore. The practice has earned it, so why not collect?

An automated RCM solution is the answer to the denials problem. There’s no reason to subject staff to these mundane, repetitive tasks when you can outsource the work. As long the organization you partner with is staffed with highly-trained specialists who know exactly how to implement the solution. The great thing about getting some help to resolve denials is that up to 59 percent of the time insurers reverse a denial when it’s appealed.

The potential ROI is reason enough to take a serious look at an outsourced RCM solution. In addition, it helps office staff focus on assisting patients and running the practice: The reasons they were hired in the first place.

Is outsourcing RCM a job killer or a way to help practice managers increase revenue, do a better job and have more time other critical responsibilities?
 
 
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