Revenue cycle management might be one of the most commonly overlooked, yet most critical parts, of a successful practice. For many providers, though, running a business isn’t exactly why you got into medicine in the first place and it’s certainly not something that they covered in-depth during medical school.
Even with a highly trained office manager and medical billing staff, you are likely experiencing some inefficiencies in your revenue cycle management that lead to lower collections overall. This has an immediate and real impact on your bottom line, and your ability to stay in business as a clinic. For some small and independent clinics, a better option is to outsource your revenue cycle management. We’ll discuss some of the pros and cons of outsourced RCM.
Benefits of Outsourcing
As you are weighing whether or not outsourcing is the right choice for you, here are some of the key benefits you can expect:
- Higher collection rates – medical billing services have a dedicated and highly trained staff that understands how to maximize revenue collections. They often achieve much higher collections as a percent of billed charges than you could expect to do on your own. Even a small increase of 5-10% can translate to significant revenue increases for your clinical practice.
- Dedicated coding and billing staff – if you run a small practice, your staff members probably wear a lot of hats, which means they don’t have as much expertise in medical coding and billing. Getting coding and billing right can reduce errors and increase collections. It can also reduce the chance of a HIPAA violation from inadequately trained internal staff members.
- Cost savings – one of the biggest expenses you incur is staff costs, so hiring your own medical coding and billing staff will usually cost more than outsourcing (even with any outsourcing fees).
- Improved patient experience – billing errors are one of the biggest patient complaints, so streamlining your process, reducing unnecessary insurance claim denials, and reducing billing errors results in a better patient experience overall. Plus providers and staff can spend more time with your patients because you won’t have as much administrative work to do.
Challenges of Outsourcing
There are also some challenges to weigh before you decide to outsource.
- Cost – there is a cost for outsourcing, usually paid as a percent of total billed charges. Calculate your internal costs for hiring staff and the projected increases in revenue by outsourcing to determine if you’ll get a good ROI.
- Data security risks – any time you transfer data to a third party contractor there is an additional risk of patient data breaches or HIPAA violations. Be sure you have a signed BAA in place, and you’re working with a vendor that has a good track record on HIPAA compliance.
- Lack of control – when you do internal billing you have control over the entire process. Outsourcing it means losing some control, but with the right partner you’ll still be 100% in the loop about what’s happening with your finances through regular reporting.
Outsourcing isn’t right for every clinic, but if you think it might be a good choice for you, talk to AdvancedMD to learn more about our medical billing services.