Healthcare practice owners are constantly under pressure to maintain profitability while delivering high-quality patient care. One area that often drains resources and directly impacts the bottom line is revenue cycle management (RCM).
Outsourcing RCM to a specialized medical billing company can be a game-changer in revenue improvement, but many practice owners question the actual return on investment. Let’s dive into some concrete ways an RCM billing company can save you money while also improving revenue.
In this article, we’ll outline the improvements in processes and performance that a healthcare practice can expect when working with a qualified RCM billing company.
How an Expert RCM Billing Services Company Saves You Money
- Reduced Labor Costs: Outsourcing RCM eliminates the need for many of your in-house billing staff, including salaries, benefits, and payroll taxes.
- Elimination of Overhead: You save on office space, equipment, software, and other operational costs associated with an in-house billing department.
- Scalability: RCM companies can adjust staffing and resources to match your practice’s volume, avoiding overstaffing during slow periods or understaffing during peak times.
What to Expect from Outsourcing Revenue Cycle Management Processes
1. Improved Medical Claim Processing and Reduced Denials
- Specialized Expertise: RCM companies employ teams of experts well-versed in complex medical services coding, billing, and payer regulations. Their extensive knowledge and experience ensures accurate claim submissions while minimizing errors that lead to denials.
- Dedicated Resources: RCM companies allocate significant resources to denial management, appealing rejected medical claims, and implementing strategies to prevent recurring denials. This has a huge effect on reducing lost potential revenue and improving cash flow.
- Technology-Driven Efficiency: RCM firms often utilize advanced software and automation to streamline claim processing, identify potential issues, and expedite reimbursements.
- Cost Savings: Taking advantage of outsourced medical billing expertise and advanced RCM technology, reduces costs in hiring and staffing, while actually improving revenue reimbursements.
2. Optimized Medical Charge Capture and Coding Accuracy
- Comprehensive Charge Capture: RCM companies implement robust charge capture systems to ensure that all billable services are accurately recorded. This prevents lost revenue due to overlooked charges.
- Medical Coding Expertise: Skilled coders ensure proper assignment of codes to medical services, maximizing reimbursement potential. Incorrect coding can lead to claim denials and audits.
- Regular Audits and Compliance: RCM companies conduct regular audits to identify coding errors and compliance issues, preventing costly penalties and recoupments.
- Cost Savings: Accurate billing is achieved without the need to hire, train, and manage specialized charge capture teams.
3. Improved Healthcare Cash Flow and Accelerated Payments
- Streamlined AR Management: Expert RCM companies focus on efficient accounts receivable management, reducing the time it takes to convert claims into payments.
- Aggressive Follow-Up: Dedicated teams follow up on unpaid medical claims, reducing the number of outstanding balances and improving cash flow.
- Patient Billing and Collections: Effective patient billing and patient collection processes ensure timely payments, minimizing write-offs.
- Cost Savings: Practices get the benefit of highly professional billing and collections teams without the overhead of an in-house collections department
4. Access to Advanced RCM Technology and Data Analytics
- Data-Driven Decision Making: RCM companies utilize advanced RCM data analytics to identify trends, improve efficiency, and uncover opportunities for revenue enhancement.
- Robotic Process Automation (RPA): Technology-driven processes automate routine tasks, reducing errors and increasing productivity.
- Patient Communication Tools: The most qualified RCM companies offer tools for patient eligibility verification, patient communication, improving patient satisfaction, and reducing bad debt. This next-level communication results in faster patient collections and better patient relations.
- Cost Savings: Take advantage of the latest technology and benefits of streamlined interfaces and smoother processes without having to invest in IT support teams and expensive software.
5. Focus on Patient Care
- Increased Productivity: By offloading RCM tasks, your staff can focus on providing quality patient care, leading to increased patient satisfaction and loyalty, reducing expensive turnover.
- Enhanced Patient Experience: A streamlined billing process can improve the overall patient experience and quality of work for your team, while reducing administrative burdens and delays.
- Cost Savings: Outsourcing RCM processes saves time for your team and opens up opportunities to reduce the number of employees needed to maintain your current patient volume.
The Total Cost to Collect
Outsourcing revenue cycle typically reduces the total costs to collect revenue – known in the industry as Total Cost to Collect or TCC.
The formula for TCC is total expenses incurred to collect receivables (staffing, technology, clearinghouses, office space, etc.) divided by total revenue for the same period. The result is a percentage, which typically may be less than 9%.
This percentage can generally be compared to the outsourced RCM company’s contingency fee, for comparison. For example: An in-house TCC of 7.5% vs. a 3.9% contingency fee would essentially mean that outsourcing is 3.6% less costly. This delta times your annual revenue represents the actual cost savings in dollars.
With a reduction in the practice’s total cost to collect, the long-term benefits in terms of increased revenue, reduced costs, and improved efficiency often outweigh the initial investment.
By carefully selecting an RCM partner with a proven track record and a deep understanding of the healthcare industry, you can unlock the full potential of outsourcing and drive financial success for your practice.
Measuring the ROI of RCM Outsourcing
To accurately measure the financial impact of outsourcing RCM, it’s essential to track key performance indicators (KPIs) such as:
- Days in accounts receivable (DAR)
- Claim denial rate
- Collection rate
- Revenue cycle length
- Net collection rate
By comparing these metrics before and after outsourcing, you can quantify the cost savings and revenue increases achieved through your partnership with an RCM company.
E-Book Download: 7 Essential KPIs to Optimize Revenue in Every Medical Practice
Download UnisLink’s free eBook that explains in detail the 7 essential KPIs every medical practice should be tracking to optimize revenue. By deploying these metrics, you’ll immediately improve your practice’s billing processes and financial health.
Inside the eBook you’ll find:
- The 7 critical KPIs that measure your revenue cycle efficiency.
- How to calculate each metric for a clear understanding of your performance.
- Actionable steps to improve each KPI and boost your revenue collection.
- Benchmarking data to compare your practice against industry standards – and benchmarks for the top 20 specialties.
Unislink: Your Partner in Financial Optimization
At Unislink, we understand the unique cost pressures faced by healthcare practices. Our comprehensive RCM services are designed to deliver immediate and measurable results.
Through our streamlined onboarding process and expertise in coding, billing, and denial management, we can identify areas for improvement and implement strategies to:
- Reduce medical claim denials
- Optimize medical coding accuracy
- Enhance revenue capture
- Improve cash flow
By partnering with Unislink, you can experience a significant boost in your practice’s financial health within a short timeframe. We are confident that our commitment to expertise, efficiency, and technology will translate directly into cost savings and improved revenue.
Contact us today to learn more about our free revenue cycle opportunity assessment, uncovering opportunities to significantly and immediately enhance your revenue and cash flow.