Managing your revenue cycle in-house is a big responsibility, and for some healthcare practices, RCM billing comes with levels of complexity that may seem overwhelming. Even the most dedicated teams can feel stretched between medical coding and compliance, billing follow ups, and patient collections.
Over time, if a practice is not meeting industry standards in their key performance indicators, reimbursements may not be optimized and cash flow can slowly erode. If that seems to be the case at your practice, you may want to consider outsourcing RCM billing operations.
Outsourcing to a qualified medical billing services company offers end to end revenue cycle management that can transform your financial health and free your team to focus on providing outstanding patient care
But, how do you know if your practice would benefit from outsourcing RCM?
Here are five top signs (plus a bonus KPI) that show your medical practice should consider outsourcing revenue cycle management, backed by the key performance indicators (KPIs) that reveal where the greatest revenue improvements often occur.
1. Your Days in A/R are High and Cash Flow Is Tight
Key Metric: Days in Accounts Receivable (A/R)
Formula: Total A/R ÷ Average Daily Charges
If your average Days in A/R is consistently above 40, there are plenty of reasons why your accounts receivables might be lagging and a lot of opportunity for a healthier cash flow experience. Your team may be experiencing delays in claims submissions, or denials for missing documentation, and inaccurate medical coding. There may be inefficient follow-up to denials or lack or prioritizing older claims.
Since the industry standard for Days in A/R is 30 days, if your Days in AR is greater than 30 it’s highly likely your practice could improve this metric by outsourcing to an expert RCM billing company with a proven track record for accurate and timely claims submission, reduced denial rates, and improved A/R for their clients.
Regarding Days in A/R, watch for:
- Does the practice have less than optimal cash flow?
- Do you have a high percentage of patient Accounts Receivable A/R > 120 days?
- Are you seeing uncollected patient balances from older encounters?
2. Your Denial Rate Is Too High
Key Metric: Denial Rate
Formula: Number of Denied Claims ÷ Total Claims Submitted
There’s no doubt, it’s disappointing to see claims denied, causing more work and follow up for the team with health insurance payers. But, it’s important to look deeper into denied claims as there are two metrics that bring insight for prioritizing a solution.
Initial denial rate has an industry benchmark of 6 – 10% with a top tier benchmark less than 5%. If your practice is higher than the standard, there’s plenty of room for improvement through prevention processes like reducing coding errors, ensuring eligibility checks, and providing thorough documentation.
Final denial rate reflects the percent of claims that remain denied after all appeals are exhausted. That industry benchmark is 2 – 5% with a top tier benchmark of less than 2%. Higher than average denial rates are indicators of a solid opportunity to improve your financial performance.
One of the many benefits of outsourcing RCM to a medical billing company is the use of advanced revenue cycle management software which can flag issues before claims go out the door. These software systems include automation tools such as prioritizing follow up in denied claims.
Plus, a qualified RCM company offers certified medical coders who stay up-to-date on CPT, ICD-10, and payer-specific coding changes, reducing coding errors.
Regarding Denial Rate, watch for:
- Is the team seeing repeat claim denials for the same reasons?
- Does the team lack time to work denials internally?
- Do you see inconsistent feedback loops between billing and clinical staff?
3. You’re Losing Revenue Due to Credentialing Delays
Key Metric: Time to Credential / Payer Enrollment Lag
Physician credentialing is more than just a paperwork hurdle. The opportunity cost of not seeing patients can run into the thousands when a provider is waiting to be credentialed. Unfortunately, many practices underestimate the administrative and time consuming load of tackling this complex process.
Working with a medical credentialing specialist or a firm that includes credentialing in their medical billing services ensures faster enrollments, fewer errors, and real-time updates on payer status. Some medical billing companies now offer bundled medical credentialing services to reduce onboarding friction.
Regarding Credentialing, watch for:
- Are new providers waiting months to get in-network with health insurance payers?
- Are medical claims held up due to incomplete or inaccurate provider credentialing?
- Are you losing revenue reimbursements from patients seen out of network?
4. Your RCM Team Is Overwhelmed and Mistakes Are Increasing
Key Metric: First Pass Resolution Rate (FPRR)
Formula: Number of Claims Paid on First Submission ÷ Total Claims Submitte
If your first-pass resolution rate is below 90%, you’re spending a lot of time correcting avoidable mistakes. To optimize FPRR, a practice needs to manage their RCM with attention to best practices and hit industry standards on the top KPIs. Most RCM processes feed into First Pass Resolution Rate, from accurate patient registration to timely charge capture, accurate medical coding and effective claims management.
If you’re finding your team doesn’t have the adequate resources to achieve over 90% in the First Pass Resolution Rate, you could consider outsourcing revenue cycle management processes.
In Your RCM team, watch for:
- Does the team send frequent claim resubmissions and appeals?
- Does the front-office or RCM billing team feel overwhelmed?
- Are there operational inefficiencies and lack of clarity in reporting of claim status?
5. Net Collection Rate (NCR) is too Low
Formula: Payments ÷ (Charges – Contractual Adjustments)
At the end of the day, the Net Collection Rate metric is the most revealing regarding RCM efficiency. This rate identifies how much of your collectible revenue from patient encounters and services you’re actually collecting.
To get to this point, all revenue cycle management processes for a patient encounter have been initiated, worked, managed, and follow up is completed. The team has done their best to get cash into the door from all the hard work of the entire practice. The question becomes whether it’s enough.
An NCR below 95% is a strong signal that it may be time to consider outsourcing. With a high-performing end to end revenue cycle management partner, you can typically push this rate above 95%, for a significant boost to the cash in the door.
Why RCM Outsourcing Works: It’s Not Just Billing—It’s a Strategy
Top-tier revenue cycle management providers don’t just file claims—they bring strategy, structure, and sophisticated revenue cycle management software to every phase of the patient financial journey:
- Front-End: Eligibility checks, pre-authorizations, and accurate demographic entry
- Mid-Cycle: Optimized medical coding and compliance reviews by certified coders
- Back-End: Claim denial management, collections, analytics, and payer negotiation
They also provide detailed performance reports, so you can monitor KPIs and financial trends in real-time.
What to Look for in an RCM Billing Partner
Choosing the right medical billing services partner means finding one that offers:
- Scalable services tailored to your specialty
- Certified medical coders with deep expertise in your field
- Provider credentialing and healthcare payer enrollment handled in-house
- RCM automation tools for faster claim turnaround
- Transparency and accountability in claims reporting and performance tracking
- HITRUST Certification, which validates the RCM services company has met rigorous requirements for data security and privacy standards, is crucial for handling sensitive patient information. RCM companies that meet HITRUST standards can ensure compliance with regulatory requirements such as HIPAA and GDPR.
Look for medical billing and coding companies with proven track records and robust healthcare revenue cycle management services. Don’t just compare fees—compare outcomes.
Is It Time to Outsource RCM? Ask Yourself:
- Are your medical claims getting paid promptly—or languishing in A/R?
- Does your medical and RCM team feel bogged down in administrative tasks?
- Are you capturing and collecting the full revenue value of every visit?
- Do you feel your practice is thriving —or falling behind?
- Ready to Strengthen Your Revenue Cycle?
UnisLink is a leading provider of end to end revenue cycle management, combining advanced technology, RCM expertise, and a consultative approach to help practices increase patient revenue, reduce claim denials, and regain financial peace of mind.
We offer a free revenue cycle assessment (RCA) with no strings attached which uncovers in detail where your practice could be capturing and collecting more revenue. The RCA looks at dozens of metrics that point to opportunities for immediate and long term revenue improvement. This assessment is highly instructional for your practice and can provide clarity on whether outsourcing your RCM is the right decision for you.
Contact us today for your free RCA and learn where your practice can immediately see financial improvement.