Ask these 10 questions before you choose a RCM vendor
Deciding whether to hire a vendor to handle revenue cycle management (RCM) for your practice is a big decision. The 10 questions that follow will help you evaluate the candidates and make the best choice for your practice.
The cost of revenue cycle management (RCM) services can vary significantly depending on the size and complexity of services. Some charge monthly fees while others charge a percentage of the total amount collected. Two vendors may charge similar rates, but what is included in that price can vary.
It’s important for the vendor to spell out everything included in its fees, and be transparent about the services it charges extra to provide.
The potential vendor should explain how it will solve the problems the practice identified during its discovery phase and its success rate with previous clients. Some vendor proposals may include incentives for exceeding set goals, or penalties if goals are not met.
RCM companies have economies of scale that allow them to offer a practice technology it would otherwise be unable to afford or maintain. But it should be clear from the outset what technology the vendor will supply and what will be expected from the practice, and how the vendor-supplied technology will interface with existing technology.
A growing number of RCM companies employ people abroad, a fact that they should disclose. Practices should find out what the call center hours will be, the employees’ language skills, and their knowledge of local laws and regulations.
A practice may want to outsource RCM for only a short time to get through a growth or transition period. If short-term contracts aren’t an option, the practice may lose money if it decides to terminate early.
Find out how the practice can get out of the contract if the vendor doesn’t hold up its end of the contract or what penalties, if any, will apply if the practice opts out of the contract early.
The Healthcare Financial Management Association, the American Association of Healthcare Administrative Management and others set industry best practices vendors should know. These organizations also certify RCM professionals, ensuring that clients have knowledgeable representatives working on their behalf.
As a business associate to the practice, the RCM company should be able to provide potential clients with risk assessments and explain what measures they take to remain compliant with the Health Insurance Portability and Accountability Act (HIPAA).
The most effective way for a practice to assess its vendor’s performance is through reporting. Reports should be provided regularly that include, at minimum, an analysis of accounts receivable, the percentage of accounts in receivable for 60 days, 90 days or 120 days, and a breakdown of payers and providers with accounts in each category. In addition, the reports should provide a breakdown of the who and why of denials, and the lag time between date of service and when bills are sent out.
Some RCM vendors first collect on behalf of their clients, then send a check once a month, or send the money to a lock box. Others post the collections in real-time via direct deposit. The way the RCM vendor handles this could affect a practice’s ability to meet its financial obligations.