Outsourcing Hospital Billing Services

Hospitals billing services have been outsourced for many years, but things are accelerating.

What was once an option that leaders only considered under specific circumstances is now becoming standard practice, with many seeing benefits from outsourcing hospital revenue cycle management. This is thanks to recent changes in the hospital billing services landscape, like a pandemic and the need to find stability and improved revenue. Let’s take a look at those factors, and at a hospital that has announced its successful outsourcing.

COVID-19 Has Changed Hospital Billing Services
The COVID-19 pandemic has impacted hospital billing in multiple ways, something the American Hospital Association has spoken out on.
 “The AHA estimates that U.S. hospitals and health systems will lose $120.5 billion between July and December 2020 due to reductions in patient volumes coming to baseline levels over the next 12 months. These losses are in addition to the $202.6 billion in financial impact the AHA estimated for hospitals between March and June 2020, bringing total loses for this calendar year to at least $323.1 billion, not including the impact of currently increasing COVID-19 case rates. If these surge trends continue, the financial impact on hospitals and health systems could be even more significant.” [1]

Leaders have seen hospital revenue cycle management complicated by new codes and shifting coding scenarios. The Health Resources and Services Administration (HRSA) has stepped forward with guidance and programs like the HRSA COVID-19 Uninsured Program [2].

COVID-19 vaccines are free to everyone in the U.S., meaning that only insurance companies or the government can be billed for administering vaccines and patients cannot be billed. This requirement has led to other billing complexities for hospitals administering the vaccine including:

  • The requirement that they may not charge for an office visit or other fee if COVID-19 vaccination is the only medical services provided.
  • The ability to seek reimbursement from a program that covers COVID-19 vaccines administration fees for a patient—this includes private insurance, Medicare, Medicaid or the federal COVID-19 Uninsured Program.
  • The requirement to request certain information from a patient if they are seeking reimbursement from the HRSA COVID-19 Uninsured Program, but with the understanding that patients aren’t required to provide that information.

Overall, COVID-19 has had a negative impact on patient employment, creating gaps in coverage for many, complicating patient access and registration and subsequently, billing, across the board. The Commonwealth Fund found that 7.7 million workers lost jobs that provided employer-sponsored insurance, additionally impacting 6.9 million dependents, totaling 14.6 million individuals affected [3].

Hospitals Need Stable Revenue and Reduced Risk
All of the changes above have meant overall volatility for hospitals, whose margins were already razor thin. In addition, they are navigating a shortage of billing professionals, challenges of remote work, and the need to focus on other initiatives to keep organizations healthy. The vast majority of hospitals will benefit from looking for efficiencies by outsourcing hospital billing services.

When billing is outsourced, hospitals benefit from a more predictable operating budget and increased compliance with federal, state, and payor regulations. They also tap into expertise and extended relationship networks that are only becoming more valuable as uncertainty increases and the chance of lost revenue grows.

Hospitals also benefit from scalable resources, cutting back on the drain of scouting, hiring, training, retraining, managing, and retaining the billing professionals needed to maintain an effective and efficient billing practice in a complex healthcare environment.

By outsourcing hospital billing services, many are finding ways to stabilize cash flows, improve denial rates, and reduce risk as the future becomes more complex.

Hospitals Want to Create a Better Patient Experience
Even before the pandemic, hospitals were stepping out to improve the patient experience. Outsourcing hospital billing services means that errors can be reduced and hospital leadership can focus on the patient experience in other areas.

Also under the patient experience umbrella is the Surprise Billing law – the law that addresses patients unknowingly receiving care from an out-of-network provider and then being billed and being stuck with excessive out of pocket costs [4]. Errors in this area create a negative patient experience and poor reputation for a hospital.

Campbell County Outsources its Hospital Billing Services
Based in Gillette, WY, Campbell County Health recently announced that it is outsourcing its hospital revenue cycle management including prior authorization, coding, hospital billing services, and registration.

To begin the process, they sent out inquiries to a total of eight different companies, receiving responses from five. Health system leadership then reviewed the five RFPs. As a next step their CFO had conversations with the five firms’ current customers. They then narrowed down the selection to two firms who performed two-day on-site visits, finally choosing a partner [5].

As hospital billing services become more challenging, expect to see more stories like this in the news. To help align your outsourcing strategy with changing trends in hospital billing services, contact us today.

[1] American Hospital Association, “CARES Act Relief Funds Have Helped Hospitals and Health Systems, but Are Just a Fraction of Losses,” October 2020. Available: https://www.aha.org/system/files/media/file/2020/06/aha-covid19-financial-impact-short-0620.pdf.
[2] Health Resources & Services Administration, “COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured,” June 2021. Available: https://www.hrsa.gov/CovidUninsuredClaim.
[3] P. Fronstin and S. A. Woodbury, “Update: How Many Americans Have Lost Jobs with Employer Health Coverage During the Pandemic?,” To the Point (blog), Commonwealth Fund, 11 January 2021.
[4] U.S. Department of Health & Human Services, “HHS Announces Rule to Protect Consumers from Surprise Medical Bills,” 1 July 2021. Available: https://www.hhs.gov/about/news/2021/07/01/hhs-announces-rule-to-protect-consumers-from-surprise-medical-bills.html.
[5] K. Adams, “Campbell County Health to outsource revenue cycle operations,” Becker’s Hospital Review, 1 September 2021. Available: https://www.beckershospitalreview.com/finance/campbell-county-health-to-outsource-revenue-cycle-operations.html.

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