Considerations for Outsourcing Revenue Cycles


By the end of 2021, hospitals could lose $122 billion in revenue. An American Hospital Association study was commissioned to examine the impact of the COVID-19 pandemic on hospital revenue. Their study found that hospital revenue would likely decline throughout 2021 due to an increase in drug, labor, and supply expenses from 2020. Health systems may be working hard to regain some of these revenues as the world slowly transitions to a post-pandemic era. Many medical providers are outsourcing their revenue cycle management to improve patient experience, increase revenue, and improve provider success.

While revenue cycle management is meant to simplify communication between the administrative and clinical sides of a practice and to merge the two, in the end, the process itself can seem daunting. More data will be collected, safeguards will be instituted, and more double-checks will be required than ever before. While two-thirds of healthcare organizations currently choose revenue cycle outsourcing for true simplicity in management and communications.

Outsourced RCM involves outsourcing the same RCM tasks you would normally handle with your employees, but you delegate some or all of them to a third party. The firm should provide a modern, affordable billing platform, provide support before, during, and after the cycle is completed, and maintain compliance with HIPAA, ISO 27001, and 9001. Your administrative workloads will be decreased, and your operations will be more efficient if you outsource your RCM operations.

As part of the revenue management cycle, most RCM outsourcing firms offer one or more of these services:

Patient registration

The service provider is usually responsible for entering all patient data, including demographic details, insurance information, and billing information. The provider also validates the planned medical procedures and verifies insurance coverage.

Medical coding

Since healthcare regulations and government standards constantly change, service providers provide regular training on the latest standards. It also includes the most recent versions of CPT and ICD coding guidelines.

Claim Denials & Claims

Insurance claims are typically generated and submitted by RCM service providers. The service provider can also organize an explanation of benefits (EOB). Claims that are denied need to be corrected and resubmitted for appeal, often within a tight deadline.

Charge capture

Depending on the patient, you may need to handle Medicare and Medicaid patients, third-party insurance claims, or worker’s compensation claims. The right RCM provider will handle all types of charge captures.

Posting payments in your billing system is normally a fairly quick process with RCM firms. An RCM firm can offer auditing and analysis of all payment information once the payment has been completed.

-Receivables – One of the most dreaded situations for any healthcare organization is a bottleneck in accounts receivable with failed or under-payments. RCM providers can handle your accounts receivable, assist with follow-ups, and reduce the time between claims submission and reimbursement.

-An RCM company should be able to provide you with key performance indicators and data points, usually every month. It is possible to determine the potential for growth and improvement by reviewing these figures and analyses.

Every healthcare business strategy should include RCM. You can ensure that you aren’t missing important details by outsourcing your RCM efforts, whether in part or completely. You should also make sure your budget can handle your required RCM services.

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Medical Disclaimer

The information provided on this website is for general informational purposes only and should not be considered medical advice. The content on the website is not intended to be a substitute for professional medical diagnosis, treatment, or advice. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition.


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