How is the revenue stream in your medical practice currently? Or more specifically, how is the development of your revenue cycle management (RCM)? During the coronavirus epidemic, medical practitioners across the healthcare sector have noticed decreased patient traffic and, consequently, patient payments. Some people avoid confined areas, especially doctor waiting rooms, out of fear of infection. It may cause businesses to reevaluate the expense of revenue cycle management.
But you’ve been considering outsourcing sales cycle management even before the current health crisis. If the effectiveness of your existing revenue cycle management setup dissatisfies you, it could be time to think about outsourcing this crucial area of your company.
Cost is the deciding factor in the majority of medical practices’ decisions about whether or not to outsource billing. To get your staff ready for a prospective transition, it’s helpful to think about how much healthcare RCM Companies services cost right now.
Costs are not just monetary; they also involve time and effort
In order to concentrate on their core capabilities, many medical offices opt to outsource medical billing. The goal is to devote more time to patient care and diagnosis. You can direct staff attention away from the challenges of billing through outsourcing.
When you consider the primary responsibilities involved in revenue cycle management and how much knowledge you need to have on staff to handle it, outsourcing starts to look appealing. There are eight billing tasks that demand significant staff attention, as Cost Owl pointed out. They would likely be handle more effectively by a third party than by your team.
Each task has a unique time requirement that is unpredictable to estimate. Consider the time it would take a staff member to call to verify a patient’s insurance status. Keeping track of unpaid bills and which ones have been outstanding the longest takes a lot of staff time.
Along the road, there are also a tone of other details to work out. Before services are provide, for instance, your personnel must make sure that patients understand their financial obligations. Then, some patients require bill reminder reminders. Later on, you start mailing extremely dated bills to collections. These tasks eat up an increasing amount of your valuable time.
Pricing Issues and the Possibility of Increasing Revenue
Your medical practice is right to be concerned about the potential increase in out-of-pocket costs if you outsource billing. That is a result of a fear of the unknown. Investigating and comparing such items, however, is trivial.
Although hiring a third party to handle billing may seem pricey, having an internal billing department is often less expensive, according to Cost Owl. “With internal billing, you are not only paying your billing workers’ salaries, but also their healthcare, taxes, training, and auxiliary office expenditures,” the author writes.
In addition to paying for lower quality billing, practices pay for work that is less accurate when completed internally as opposed to having professionals handle the project. “A business can improve its income by an average of $201,600 by switching from an internal billing department to an external provider.”
Cost Calculation for Outsourced RCM Services
According to Medical Billing Service Review, medical billing claims that insurance companies reject cost healthcare organizations an average of $125 billion annually. Losses result from both patients missing payment deadlines and coding errors.
A billing services provider might not charge signup costs. But be aware that each doctor on staff will cost you around $300. A set cost, such as $1,000 for each office, may be charge by the RCM services provider if you manage a big practice with numerous doctors. There are also administrative costs. They typically cost between $3,000 and $6,000. The size of your practice and the number of patients you treat annually determine the administrative fees you will pay.
You can choose to pay a fixed charge or fees calculated as a percentage of the patient service income earned for claims processing. When you outsource revenue cycle management, keep in mind that your income should increase rather than decrease. The reducing rate of unpaid insurance claims should more than balance the costs, even if you are now paying more in fees. According to Medical Billing Service Review, practices contribute between 5% and 10% of the funds received.
On average, flat costs range from $4 to $6 each claim. In general, small offices will pay hourly rates. The fees are determine by how much time was spent by the revenue cycle management business obtaining your bills. It will come to roughly the same amount as you would pay a full-time employee to handle medical billing. You won’t be require to pay each month for full-time revenue cycle management services, though.
Software Advice estimated that healthcare firms with $2.5 million in yearly insurance claims would spend $120,000 on internal medical billing or $5,000 on external medical billing. But there are other expenses involved besides the $5,000. Direct insurance claim processing would cost $4,500 in-house as opposed to $150,000 if it were outsourced. While a third party handling RCM services would collect 70%, in-house collections would only achieve 60%. The difference between doing RCM in-house and outsourcing it would be $1,367,500 against $1,594,500.
Getting Ready to Contract Out RCM Services
Since 1977, Advanced Data Systems has helped many new healthcare organization clients move from their current services and systems to our platforms, including Bellmedex. whether they are first-time clients for RCM services or are moving from other RCM services to Bellmedex. Pricing for Bellmedex is based on a portion of the money that is collected for you; amounts typically range from 3% to 6% depending on the quantity collected.
Consideration should be given to whether to contract out the insurance billing for your medical practice to a third party. The question is if doing so could increase profits over providing the services internally. For many, it’s best to enlist the assistance of RCM services experts in order to safeguard the practice’s financial stability.
The Healthcare Revenue Cycle in Steps
There are numerous steps in the revenue cycle for healthcare. This indicates that there are several potential for mistakes to happen. Any faults in the revenue cycle have the potential to stall or delay the provider’s ability to get paid by patients and insurers. Let’s look at the processes in the healthcare revenue cycle to get a better idea of where errors can happen and how RCM can prevent them:
Pre-approval and eligibility checking
The healthcare provider gathers data to create a patient account when a patient makes an appointment. This involves gathering the patient’s insurance details and confirming their eligibility for coverage.
Even if a patient already has an account with the provider, revenue cycle management places a strong emphasis on accurately completing this phase. A claim denial later in the revenue cycle will only be the result of inaccurate information or ineligible insurance. This indicates a delay in the reimbursement payment to the provider. Additionally, it adds to the provider’s workload because they must go over the patient’s records again to fix the mistakes.
Capturing and coding charges
Using internationally recognized medical codes, patient services are converted into chargeable costs through the charge capturing procedure. Insurance companies use these codes to calculate reimbursement amounts. The insurance provider could reject the patient’s claim if the medical records are not properly coded. As a result, provider reimbursement is delayed. Additionally, it costs the provider time and money because appeals and investigations are required for refused claims. Coding correctness is ensured by effective revenue cycle management, allowing denials to be completely avoided.