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Considering outsourcing the business side of your practice to a revenue cycle management firm? Let someone deal with the claims and collections headaches … right? Maybe. We examine the pros, cons, expenses, and benefits.
Do you enjoy the daily business of medicine? Not the world of patients and symptoms, but the domain of claims, collections, receipts, and reports, for which there is woefully little training in the medical school curriculum.
If you don’t, you are not alone. Thousands of practices have effectively delegated their entire financial operations to third parties. Should you? Let’s take a look at the pros and cons.
First a quick description. The in-vogue name for these financial third parties is “revenue cycle outsourcers,” also known as billing services. Instead of hiring staff to do your billing, you delegate it to the revenue cycle outsourcing firm who manages the entire operation, including coding and review, electronic claims submissions, collections, and financial reporting. The revenue cycle outsourcer’s fees are based on a percent of collected receipts. The more you make, the more they make.
The pros of outsourcing
What’s the case for revenue cycle outsourcing? Here is what the outsourcers would say:
Now for the cons
So what are the downsides of outsourcing your billing?
Weigh the options
We’ve established the pros and cons. Now, how do you decide? Here are some guidelines:
All of these will give some indication of the effectiveness of your billing staff. Armed with this data, you can benchmark your practice against the revenue cycle firm of your choice. They should be able to provide some their performance data on practices like yours. This will allow to you compare effectiveness - and help you make the final decision.
Bruce Kleaveland is president of Kleaveland Consulting, a management consulting firm focused on healthcare IT. He can be reached via firstname.lastname@example.org.
This article originally appeared in the February 2010 issue of Physicians Practice.