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Revenue cycle management: Is it time to outsource?


Is it time to outsource? Here’s a closer look at the pros and cons of outsourcing vs keeping it in-house

Outsourcing to a vendor

It can maximize revenue

Practices that lack internal expertise with coding, billing, contracting or working denials can generally increase revenue by outsourcing to a reputable firm, says Jacqueline Coult, CHBC, owner of Salt Lake City-based Complete Healthcare Business Consulting. 

The costs can add up

Vendors typically base their fees on a combination of factors, including claims volume, specialty and the specific services they’re providing, so it’s important to understand what’s included, says Michelle Durner, CHBME, president of the Healthcare Business Management Association, which represents 500 revenue cycle management providers. For example, does the vendor employ certified coders? Is provider enrollment, contracting, credentialing and/or preauthorization included in the cost, or broken out separately?

Greater efficiencies

Staff can shift their focus from performing routine billing tasks to more pressing issues that require their attention.

Loss of control

Amy Shoales, FACMPE, practice administrator of Physicians for Women & Children in Laramie, Wyoming, prefers the immediacy and control of maintaining an in-house team. Onsite access to providers enables her team to resolve coding and billing issues faster than an outsourced vendor, she says.

Keeping it in-house

Developing and refining internal best practices

Shoales has fine-tuned her internal processes to achieve a 4% denial rate-one point less than the industry average.

She developed a team of five coders-four of them certified. She also cross-trains billers to perform a variety of functions on any given day, such as payment posting and insurance verification. In addition, she trains all clinic staff members to recognize the types of services that may require a pre-authorization, and to ask the billing team to obtain the needed approval. But Shoales doesn’t mind putting extra time and resources into training. “It’s always more cost effective to get the work done right and on the front end,” she says.

Increased risk exposure

A practice that lacks the resources to maintain up-to-the-minute knowledge of all state, federal and carrier requirements exposes itself to compliance deficits that could impact revenue and cash flow.

The Merit-based Incentive Payment System (MIPS) is one example. It consolidates three existing quality reporting programs into a final score that will be used to determine physician payment adjustments. Many providers are confused about what they need to do to avoid future payment penalties, Durner says. State rules that govern patient credits and Medicare requirements regarding overpayments can also be confusing to untrained practice staff, she notes.

Less workflow disruption

Using some vendors may require use of a new practice management systems that could disrupt your practice, says consultant Elizabeth Woodcock, principal of Atlanta-based Woodcock & Associates.

Costs associated with recruiting, hiring and training staff

The practice will spend time and resources to maintain a team of  certified coders, expert billers and knowledgeable back-end staff who maintain current knowledge of all payer requirements and state and federal regulations.“The overall revenue cycle management process has become so complicated,” Dumer says. 

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