Outsourcing revenue cycle management services is turning out to be a smart option for an increasing number of providers. In 2023, 61% indicated they are considering outsourcing tasks to revenue cycle management companies in the next 24 months [1].
But a deeper question is at play. Why are they considering taking this step? Another recent survey from HFMA potentially sheds some light on their thinking [2].
Health system CFOs spend their time on a range of issues, and revenue cycle management tops the list. The survey found that they spend 24% of their time on the revenue cycle. At the same time, payer denials are a growing concern. 82% of health system CFOs indicated they are experiencing higher denials than they were before the COVID-19 pandemic.
But there are also pressures that require stronger outputs from the hospital revenue cycle. Margin pressure from several factors means that revenue cycle efficiency is more important than ever. The survey reveals that CFOs are dealing with margin pressure that’s rooted primarily in higher labor costs, but also lower reimbursement from payers, and higher supply costs. Better use of revenue cycle management services can directly impact the reimbursement piece but also help soften the blow of the other two factors. Additionally, health systems are generally frustrated with Medicare Advantage and its difficult authorization requirements and high denial rates – 19% have stopped accepting plans and a full 61% are planning to cease or considering ceasing their acceptance.
All of this adds up to an environment for considering outsourcing revenue cycle management services and investigating the revenue cycle management companies that can best support hospital and health system goals.
I fully expect even more health system CFOs to take advantage of the wide range of support options that revenue cycle management companies offer in fostering the financial well-being of their organizations.
References
[1] V. Bailey, “Providers Are Outsourcing Revenue Cycle Services Amid Workforce Shortages,” RevCycle Intelligence, 19 July 2023. Available: https://revcycleintelligence.com/news/providers-are-outsourcing-revenue-cycle-services-amid-workforce-shortages#.
[2] D. Pearson, “Hospitals’ fiscal ‘pain points’ topped by revenue cycle management, labor costs, workforce shortages,” Health Exec, 22 March 2024. Available: https://healthexec.com/topics/healthcare-management/healthcare-economics/hospitals-fiscal-pain-points-topped-revenue-cycle-management-labor-costs-workforce-shortages.
Hemant Apte, Chief Executive Officer in
Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.
