What Is RCM Outsourcing?
Healthcare providers and executives usually have one major thing on their minds: providing quality patient care and getting good results. Many would rather let their Accounts Receivable and insurance specialist staff worry about the billing process and bottom line. However, staff members in these departments are often overloaded with claim creation tasks, charge capture, billing follow-ups, complex coding, and denial management. It can be hard for them to keep up with the latest regulations and changes in RCM practices, resulting in inefficiencies in workflows. That’s where revenue cycle management outsourcing comes into play: they can give these tasks to a third-party organization that specializes in them, and both organizations reap the rewards.
There are definitely advantages and disadvantages to outsourcing revenue cycle management work. But for many healthcare executives, it’s worth the risk because these organizations have bountiful resources and knowledge to manage hospital finances—especially in the midst of recent turmoil in the industry. Revenue cycle management is also a growing market, and it’s important to perform these tasks swiftly and correctly if a healthcare organization is to stay financially healthy.
In fact, the revenue cycle outsourcing market is expected to grow at a compound annual growth rate (CAGR) of 11.9 through 2023, rising from $11.7 billion in 2017 to $23 billion by the end of 2023. Having an outsourced RCM system could be vital for many healthcare organizations if they want to take advantage of this boom.
The number of healthcare organizations that are outsourcing RCM has been steadily rising in recent years. According to Black Book Market Research, this number has grown by 48 percent since 2015, and 94 percent of hospital leaders are considering or vetting outsourcing companies. This is because for many of them, especially in this economic climate, the way their current revenue cycle management and reimbursement system is working…really isn’t. Bad debt piles up, especially for smaller organizations, and having to eat additional costs due claim denials and a lack of patient payment puts a red streak through their finances and damages their profitability.