2022 Hospital Revenue Cycle Outsourcing Update

With the challenges hospital leaders are facing today, hospital revenue cycle outsourcing should always be on the table. This is because of the benefits it offers in terms of flexibility and helping you stay ahead of challenges in hospital billing services. But these dynamics change quickly. This is why we want to present you with updates for 2022 and what you should understand about outsourcing hospital billing services today.

COVID’s Impact on Hospital Revenue Cycle Outsourcing

First, it’s critical to understand what the pandemic has meant for organizations like yours.

COVID has been a reason that many hospital leaders are looking to transform their revenue cycle. This is partly because of the low levels of performance that many have seen because of the COVID-19 pandemic. According to a recent survey, three out of four hospital and health system leaders had seen “adverse revenue cycle impacts” early in the pandemic. This has included increased denials and a jump in the percentage of Medicaid patients. At the same time, many hospitals were dealing with a shift in payer mix, including a lower percentage of commercial patients and an increase in uninsured and self-pay patients [1]. This has pushed many hospitals to look into ways to build cross-functional teams that can help them get in front of denial trends, look at root causes, and change the way they address hospital billing to improve their KPIs.

The survey authors recommended that hospitals and health systems look into outsourcing to address these challenges. And it’s a strong recommendation, especially since many hospitals are still working their way through workforce challenges. In the past, outsourcing could have been a major undertaking, but today, hospital leaders have the option of outsourcing just part of their revenue cycle management. For example, if you’re challenged with denials or telemedicine billing, you can look into outsourcing just those services.

If your organization is struggling with attracting and retaining talent (92% of hospital leaders in the survey said they were), it might be worth considering your thoughts around labor, compensation, and training in 2022.

 

Tips for Hospital Revenue Cycle Outsourcing

If you do think there is potential for you to benefit from outsourcing your revenue cycle or hospital billing services, here are a few tips [2].

Look for Places It’s Worth The Effort

Many organizations see minimal benefit from hospital revenue cycle outsourcing because they don’t identify the areas where it will be the most worthwhile for them. Know that, depending on your approach, the amount of lift can vary.

When looking at options, consider revenue streams where you’ve been underperforming or that you haven’t been pursuing because you lack the talent or experience to hit your desired goals. Also take a step back and look at how much you spend on human capital. You might have a goal of reducing FTE spend and could find some opportunities. The same goes for KPIs that you might have struggled with in the past. If you’ve had issues lifting your denial rates, for example, outsourcing might be able to help.

Examine Areas Where You’ve Seen Success

This can apply to either areas at your own organization, or at others that you’re aware of through your network. It could include hospital billing services, coding, or A/R. Some hospitals look at these because performance is easy to measure and they’re role-based. When you take this approach, you’ll start with more confidence and will likely have better opportunities to measure success.

Eventually, you can consider outsourcing all of your operations if you see strong opportunities. Your approach will depend on your goals, where you’ve struggled, and where you see the most potential.

Be Ready to Measure Success

A good hospital revenue cycle outsourcing strategy can offer positive ROI, so make sure you’re setting targets for the results you’d like to see. This might be in denial reduction, an increase in cash flows, or something else. But know that you’re not just looking at quantitative improvements. Don’t forget qualitative outcomes like feedback and employee satisfaction.

 

Challenges in Hospital Revenue Cycle Outsourcing

But outsourcing services like hospital billing isn’t without its challenges.

Make sure you’re keeping an eye on your patient experience so you can work with your vendor to ensure you balance finding great internal processes with a strong patient experience. Additionally, prioritize listening to your staff. Outsourcing hospital billing and other services can be a decision that has a significant impact on them. They’ll be integral to identifying the areas that have the most potential for success and in minimizing disruption to your team.

Most importantly, remember that this is a process that takes time. Take the time to perform critical steps like identifying gaps and asking for help from other leaders who might have more experience with outsourcing.

In 2022, if you’re considering outsourcing your revenue cycle functions, know that you aren’t alone. In this year, organizations including Conifer, Ardent Health Services, and Nicklaus Children’s Health System have outsourced services, expanded their work with existing partners and explored options in outsourcing hospital billing and collections.

If you want to learn more about how to join the ranks of the hospitals exploring a future of healthcare revenue cycle outsourcing, contact us to get started.

References

[1] J. LaPointe, “Hospital Revenue Cycle Transformation Needed to Boost Performance,” RevCycleIntelligence, 19 October 2021. Available: https://revcycleintelligence.com/news/hospital-revenue-cycle-transformation-needed-to-boost-performance.
[2] Healthcare Financial Management Association , “Key Considerations for Revenue Cycle Outsourcing,” 18 May 2021. Available: https://www.hfma.org/topics/hfm/2018/september/61738.html.

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