Rethinking Outsourcing: Six Reasons Your RCM Team Needs Backup
June 3, 2024
Not too long ago, the term “outsourcing” carried a strongly negative connotation. Staff and employees feared layoffs. Managers and departmental leaders wanted to protect their people. Executives worried about degradation in institutional knowledge, efficiency, and performance from workers outside their organizations.
But times have changed. Amidst prevailing staffing shortages, outsourcing is no longer a threat to current staff. In fact, for teams drowning in work—and hospitals facing mounting financial pressures—it may even be a lifeline. Here are six clear indicators that your revenue cycle management (RCM) team needs help:
1. You’re Shorthanded—And Your Staff Is Overworked
The starting point here is the number of job postings for open positions on your team. Considered collectively across your entire organization, does that number give you pause? Now, take it a step further and factor in staff attrition over the last five years. If you’re like most hospitals and health systems, you’ll see a difference in the current posted openings and the number of actual people who’ve left your RCM team over the years.
With that number in mind, weigh that against the number of people you’d need to optimize reimbursement time and collections. Odds are, even if you were to fill every open position magically, your team would still fall behind. Because although patient encounters may not have increased over the last five years, the claims behind those encounters have become more complex, driven by the fluidity of payor dynamics, evolving regulations, and the heightened clinical interdependency in patient care.
All that adds up to the reality that most hospital RCM teams are overworked. That, in turn, can fuel burnout, generating resignations—and more job postings.
2. Your Team Could Be Doing More Rewarding—And More Valuable Work
Ensuring your staff dedicated their time to fulfilling, high-value work is essential. The people who are currently educating and supporting your patients, working on complex claims, and analyzing financial data—are crucial to your hospital. They are your problem-solvers. Your cross-trainers. Your question-answerers. Engaging them with rewarding work helps preserve staff retention, and when you automate and outsource repetitive, low-value tasks, you’re free to do precisely that. Outsourcing buys you the flexibility to align your high performers with the tasks that put their skills and knowledge to their best use. And that helps keep them happy, making it less likely that they will seek greener pastures.
That’s important, because…
3. Recruiting Talent Is Tough—And Expensive
Increasing headcount to buy your team some breathing room doesn’t always pay off quickly. Hiring competition is intense. Across the labor market, low unemployment is sustaining elevated hiring wages. Compounding matters is a limited pool of qualified talent for specialized roles. RCM analysts, for example, need the education, experience, and competencies to analyze, surface, and communicate the financial insights that drive organizational decision-making.
Geography can also limit that pool, especially for hospitals and health systems serving smaller populations. Remote work can be a double-edged sword. While you are no longer constrained to hire locally, you are now competing for talent with organizations throughout the entire country. If you’re in a region with a lower cost of living, that competition can push starting salaries out of range.
Even when you fill a position, onboarding new hires still requires time and resources. Seeing that person reach an ideal state of productivity? That takes even longer, even more so if that employee is a remote staff member.
4. Times Are Changing—And You Need the Flexibility to Adapt
Healthcare is inherently dynamic. New, competing providers appear (and sometimes disappear). Technological advances continue to shake things up. Patient expectations are rising, as is their financial responsibility for the care you provide. And those are just the nonclinical, non-epidemiological factors that can cause up- and downswings in the number of patient encounters your hospital provides.
Outsourcing affords you the ability to scale in reaction to emergent events and factors. Drawing from a pool of resources, you can optimize your team to the areas of greatest need—from supporting a major technology implementation to managing claims for a newly acquired hospital or outpatient provider.
5. Your Patients Need Attention—And Not Just Clinically
A recurring theme at last year’s Becker’s Hospital Review Health IT + Revenue Cycle Conference was the need to allocate staff to upfront patient service and education. Supporting patients prior to—and during—admission builds trust and affinity. It also helps promote accurate capture of patient and payor data, preventing errors in claim processing and delays in reimbursement. One organization conducts educational outreach events in its community, including high-school workshops and financial literacy sessions. And it makes good sense—patients are increasingly becoming the payors, especially those with high-deductible health plans.
Although highly valuable, patient support and education still requires a significant amount of staff time. Outsourcing, especially for high-volume outpatient claims, empowers you to allocate staff to patient support, providing the twin benefit of an informed, financially engaged patient and accelerated reimbursement for those outpatient services.
6. Your Hospital Is Under Financial Pressure
The indicators are there: denial rates, turnaround time to process claims, time to reimbursement, write-offs, and profit margins, just to name a few. Outsourcing provides a pathway to reversing negative financial trends. And if your staff is drowning in work, augmenting your team helps them get ahead of their workload while stabilizing—and even optimizing—financial performance.
Outsourcing: Where to Start
When it comes to outsourcing billing and revenue cycle work, many hospitals and health systems start with outpatient and ancillary services. These often include the lab, radiology, pathology, and outpatient pharmacy. Why? These encounters generate a high volume of claims, but their relatively lower dollar amount (especially weighed against acute encounters) belies their underlying complexity. Rather than allocating staff to work denials and navigate the ever-changing sea of payor dynamics, outsourcing to a partner with dedicated expertise in those claims transforms write-offs into reimbursements. It also provides a quicker avenue to realizing ROI. Aggregating outpatient and ancillary services RCM under a single solution provider yields even greater benefits.
Further, the range and volume of outpatient and ancillary services are expanding for many hospitals and health systems. Optimizing financial performance for these departments helps them contribute revenue and profitability to the health system’s bottom line and fully realize their strategic value. With the right combination of outpatient laboratory and ancillary services, RCM staffing and outsourced billing services help realize billing and process efficiencies, accelerate cash flow, mitigate staffing challenges, and improve margins. It also increases cash collections, creates better patient experiences and physician engagement, improves claims management, and optimizes workflows.
Looking for another way to empower your RCM team to do its best work? Practically applied artificial intelligence (AI) can help. Here are five concrete examples how.