Health care providers have several options when it comes to choosing revenue cycle services to outsource. Experts in health care collections recently discussed the impact of full revenue cycle outsourcing during ACA International’s Spring Forum in March 2014. Terry Armstrong, president of State Collection Service Inc., in Madison, Wis., moderated the session, which featured panelists Stephan Bernard, vice president of professional services for Connance Inc. in Waltham, Mass., and Gregory M. Snow, vice president of corporate solutions strategy for Conifer Health Solutions in Carmel, Ind.
“When we talk about full outsource, this is the whole continuum of what happens in a revenue cycle from scheduling all the way through the admissions, discharge, medical records and then the billing and receivables,” Armstrong said. Bernard discussed different pieces of the revenue cycle that a provider can choose to outsource, including scheduling, financial clearance, patient receivables management and coding.
“You have to ask yourself the question, of these functions, which ones benefit from economies of scale [and] which ones are portable, meaning they can be centralized and possibly be moved off site,” he said. “Pretty much every hospital does outsource some component of revenue cycle management. Generally speaking, it will be highly specialized, such as charge reconciliation or clinical documentation or bad debt collections.
Most hospitals outsource bad debt collections.” “In general it’s the question of, is this the direction the industry is going? To some extent I would say yes it is. Full service revenue cycle has established itself and it is here to stay,” Bernard said. According to Bernard, hospitals elect to outsource services because:
• The most appropriate rationale for using full outsourcing is the core competency concept. Is the health care provider in business to manage a revenue cycle or is it just an ancillary function that frankly distracts from core competencies? For most hospitals, managing the revenue cycle is not a core competency.
• They know they need to update the revenue cycle, and they don’t have the capital to do it themselves. Using an investment partner is one of the key motivating factors in acknowledging that a revenue cycle has been left unattended for many years.
• It has come into a state of disrepair, and management has lost confidence in their ability to execute. Most often this occurs when new leadership comes into an organization, takes over, does an assessment of their own internal operations and feels they need to essentially bring in someone new who can really shake things up.
Snow addressed another aspect of revenue cycle management that can be outsourced—pre-service clearance. “In the future, other than identification for security, the patient will be greeted and told the doctor will see them. It is to perform everything that needs to be performed … from an administrative point of view prior to the patient coming in for service,” he said. “What you’re attempting to do is make that visit 100 percent clinical in nature versus being half clinical and half administrative.” The health care payment system is highly fragmented, inefficient and expensive to administer, Snow explained.
“We’re looking at new payment models that are much more focused on quality, cost effectiveness and the patient experience,” he said. Larger health care systems in one regional framework are the most interested in outsourcing revenue cycle management and viable for the process, according to Bernard. “It’s a difficult model when you don’t have a sufficient scale and opportunity for centralization within any health system,” he said.