With the recent implementation of the ICD-10 code set, a doubling in claims denials is predicted for the first 6 months for 20% of medical practices. These revisions, changes, and new processes mean healthcare organizations have to contend with rising operational costs combined with inconsistency in reimbursements, making revenue cycle management a demanding and arduous task. Pressure within a medical organization can quickly add up on both physicians and staff who are forced to devote time to matters of finance and administration instead of focusing their attention on their patients.
In these challenging times, outsourcing revenue cycle management (RCM) by medical offices is a smart choice and an efficient way to manage the business side of medicine. This allows a practice to successfully navigate declined reimbursements and conform to the Affordable Care Act and the new ICD-10 code set. A decision to outsource RCM should be made after weighing the pros and cons and considering all aspects such as the size of the practice and the availability of trained in-house staff, but some of the advantages of outsourcing revenue cycle management by a hospital or clinic are:
- Managing denials: The cost of modifying a claim is approximately $25. It has been noted that as much as 50-65% of denials are incorrectly identified. All these factors lead to losses for the practice. External RCM providers are specialists and their staff is specially trained to spot errors in claim submissions and identify trends in denials to avoid future occurrences.
- Reducing administrative work: Physicians and practice staff are trained to care for patients and it is a waste of resources for their time to be spent on administrative tasks. RCM providers reduce the administrative work associated with billing and collections and allow medical specialists to concentrate on what they are trained to do.
- Facing industry challenges: ICD-10 is a stellar example of the major changes and updates in policy and processes that healthcare organizations have to combat. RCM providers are well versed with the nuances of these changes and compliance metrics and can help their clients navigate updates in the health industry with minimal disruption in the revenue cycle.
- Identifying weak points: RCM providers can help a medical organization identify common weak points that lead to recurrent revenue loss and suggest remedial measures and strategies to increase profitability.
- Recruiting and training staff: Rapid changes in medical billing mean that jack-of-all-trade front office staff is finding it harder and harder to comply with requirements for claims to be fully compensated. Outsourcing RCM means a medical organization does not have to recruit qualified billing talent or invest money in keeping them updated with policy changes.
Revenue cycle management providers offer comprehensive services and dynamic solutions to allow medical organizations to reduce operating costs, improve staff and patient satisfaction, and profitably maneuver the business side of the healthcare world.