When, What, How, and Who? Key Questions to Answer When Outsourcing Revenue Cycle Management

In today’s healthcare environment — one where providers are managing challenges like workforce shortages, declining reimbursements, rising costs, and administrative burdens — revenue cycle management (RCM) services offer a strategic alternative to handling the revenue cycle process in-house. For many community, rural, and critical access providers, outsourcing RCM to a vendor provides a valuable opportunity to free up organizational resources to focus on more competitive service avenues and patient-facing initiatives. Further, partnering with an RCM vendor who strategically leverages the most current technologies can drive significant and lasting revenue improvements. 

RCM companies can benefit healthcare organizations that struggle to manage internal billing and collections with efficiency and effectiveness — even those already utilizing intelligent automation systems. In fact, the majority of U.S. healthcare providers are outsourcing parts of the revenue cycle or delegating the entire operation. While outsourcing RCM is often the correct strategic decision, complexities of vendor partnership can cloud visibility into organizational profitability and grow collection costs. That’s why we recommend asking key questions that will help you identify the right partner for your organization’s unique goals.

Key questions for a revenue cycle management company

Any healthcare provider seeking strategic revenue cycle vendor management should closely review their own needs, challenges, and growth goals — your “why” — with potential partners. This article from the Healthcare Financial Management Association (HFMA) underscores the significance of the principal-agent problem when aligning the needs and incentives integral to such partnership arrangements. 

To simplify the matter, effective performance management requires that both partners undertake regular, robust, data-driven reviews of billing performance, with the “when, who, how and what” clearly stipulated:

• When: What is the frequency of revenue cycle performance reviews and the format for discussions of findings (e.g., in-person, teleconference)?
• Who: Which team members should be included to maximize the value and output in performance review discussions?
• How: What technology, intelligence and support will be available for the provider to monitor performance independently or the assistance offered proactively by the RCM partner?
• What, How, When: What performance measures will be tracked as part of the review, how will those measures be calculated, how will the data be defined and pulled, and at what level of granularity (e.g., group, specialty, location, physician) will the information be available?

Pay-based performance incentive structures can be created, according to HFMA, to hold partners accountable by tying the collections percentage to a schedule that considers the clean claims rate and the net collections rate. At the risk of oversimplification, the clean claims rate is determined by how effectively the provider organization captures appropriate information needed to process claims, and the net collections rate essentially measures how effectively the billing agency collects the allowable amount of claims.

Additionally, an optimal partner will identify accounts that have the highest strategic impact for immediate focus, and prioritize subsequent targets in the same context. Often, when providers address issues internally, they tend to select the easiest accounts to resolve–the “low-hanging fruit” – instead of the ones that will yield the most significant results.

Additional considerations for revenue cycle management process improvement

As part of the selection process for an RCM partner, further considerations include:

• Organizational alignment: Not every vendor is created equal and there is no “one-size-fits-all” solution for third-party RCM. An RCM vendor can standardize patient access and ensure that industry best practices are being followed every step of the way. But your company must review what each vendor offers and whether the cost of their service will provide the optimal ROI across the technology, support, and intelligence being offered.
• Collaborative focus: An RCM vendor should provide more than just service fulfillment. The best relationship is a trusted partnership where the third party understands and supports the organization’s culture, central goals, and mission. Take the time to have more immersive conversations with vendors and help them understand your perspective and approach to determine who can best provide the people, processes and technology to fill your service and skill gaps.
• Reporting oversight and analytics: Putting your RCM under a third-party vendor shouldn’t be a black box, especially when it comes to monitoring performance and results. RCM vendors should be able to help you identify deeper problems in your revenue cycle, eliminate them, and support change across the organization. This is facilitated by end-to-end reporting and consistent meetings that allow for education, training, and support every step of the way for more effective and sustainable growth.

A few other factors that can play a significant part in the outcome of a trusted RCM partnership include tracked processes for both patients and providers, accurate patient end-to-end identification methods, redundant process elimination, denial analysis and collection streamlining, and real-time reporting for performance optimization.

Transforming revenue cycle differently. Improving healthcare together.

Currance transforms revenue cycle management differently, delivering sustainable success for our clients. Let’s schedule a meeting to talk about your revenue cycle challenges, understand how Currance can help, and how we can improve healthcare together.