By Katie Wike, contributing writer
Revenue cycle management is being outsourced by many providers, according to a new poll from Black Book Market Research.
With legacy systems unable to adjust to new payments models, many providers are turning to outsourcing revenue cycle management. Healthcare IT News reports the market for end-to-end RCM outsourcing could reach $10 billion by 2016.
A poll from Black Book uncovered that hundreds of hospitals are following this new trend and using outsourced RCM. Black Book surveyed 2,250 CFOs, CIOs, business office managers, technology, and financial services staffers for their outsourcing vendor perceptions and user experiences. 445 hospitals from 40 states were represented in the poll.
“After carefully identifying and assessing their organizations’ core competencies, hundreds of hospitals have moved to outsourced RCM services over the last two years,” said Doug Brown, Managing Partner of Black Book Market Research LLC in a press release. “It has been no surprise that many overwhelmed hospital leaders have realized that RCM isn’t their organization’s core competency, and have turned to large end-to-end outsourcing firms for RCM to refocus on patient care and clinical service delivery.”
Healthcare Dive reports that while In-house RCM operations cost providers $252 billion this year, with reimbursements costing $30 to $90 per transaction. “In the financial services industry, business process outsourcers have reduced banking and brokerage transaction costs to less than a penny in most cases,” said Brown.
“The healthcare industry also has the opportunity to leverage the economies of scale offered by RCM outsourcers, which successfully handle high volumes of encounters. RCM outsourcers also have the staff and technology expertise to integrate patient billing, collections, accounts receivables, and grievances as ICD-10, and value-based payment models present even more potential for internal inefficiencies … without capital investment for state of the art technology and staff.”
Eighty-three percent of hospitals over 200 beds that moved to outsource all or most of their RCM operations have attributed revenue increases of 5.3 percent year-to-date 2014 to a turnaround in post-outsourcing RCM proficiencies.
Seventy-eight percent of hospitals under 200 beds that were new to outsourcing RCM also reported average revenue increases of 6.2 percent in 2014.