How to Tell If You Need a New Revenue Cycle Vendor?
Posted on January 24, 2022 by Kylene Coate
Healthcare revenue cycle management is a complex process that involves the management and improvement of all parts of the revenue cycle. Many healthcare providers struggle to find the time to efficiently and accurately manage their own revenue cycle because healthcare revenue cycle management requires a fair amount of training and expertise in the areas of billing and coding. For this reason, many providers choose to outsource the management of this service to an outside vendor in the hope of reducing errors and increasing consistency in payments.
RCM vendors exist to make the revenue cycle less complicated and more profitable. However, it’s not always clear how a provider is improving the revenue cycle. Laura Lay, Senior Director Revenue Cycle at Fisher-Titus Medical Center, helps shed some light on red flags, best fit, and sourcing new vendors.
If your healthcare organization has outsourced its revenue management but isn’t sure if your chosen vendor is the best fit for your establishment, here are some red flags to look out for.
Your vendor isn’t the best fit if:
- Collections haven’t improved significantly. RCM providers exist to make the cycle more profitable for healthcare providers. The bottom line is your bottom line matters. If your service provider has not shown a 5-10% increase in collections in the first few months, it could be time to find a vendor who can.
- They can’t work at scale. There are many RCM providers who offer improvements in every step of the cycle. There are multiple ways to improve collections and the customer experience that extend to improvements in point-of-service, to EHR and billing.
- Follow-up and payment posting isn’t always completed. If your vendor does not ensure complete follow-up and payment posting on all transactions, your practice is leaving money on the table. It’s essential that every payment is followed through to a final result.
- They have no clients in your niche. The healthcare industry is wide, and what works for one provider may not work for another. Make sure the RCM provider you outsource to has other practices like yours in its portfolio.
Your vendor isn’t transparent if:
- Access to patient data is limited: Your provider should give open access to the system which holds billing and coding data so that everyone in your practice knows and can be accountable for patient accounts. Ms. Lay explains a vendor that is nonresponsive to your concerns is a huge red flag.
- Reporting is infrequent: A good RCM provider will provide you with regular reporting (whether that’s weekly, bi-weekly, or monthly) so that you have an idea of how collections are going and whether or not they are improving. Reporting needs to be done on a regular basis.
- Access to the lead biller is limited. Your team should have access to the lead biller assigned to your account. There’s no good reason that your team shouldn’t have communication with the person responsible for billing your patients accurately.
- You don’t know where money is coming in from. Without transparency over every dollar coming in, how do you know whether your vendor has plugged all the gaps in your cycle?
Your vendor is not meeting performance expectations if:
- Denials and claim rejections are high. A good RCM vendor should have a team dedicated to denied and rejected claims. Nationally, denial management costs providers billions of dollars every year. Many healthcare providers also struggle to find the time to identify and fix denied claims. It is essential that RCM vendors get this right.
- You don’t know whether KPIs are being reached. Your practice should know whether your key performance indicators are being reached in real-time. It matters to both your bottom line and to your patients. Without accurate and timely reporting it is hard to know whether patient satisfaction is improving, revenue is improving or if your provider is worth keeping on. Ms. Lay advises keeping tabs on ROI and holding vendors to expected results.
- Their reporting is in a format that is hard to understand. If your vendor is providing you with regular reports but you can’t comprehend them, then they are not being very helpful. This may not be a reason to terminate the vendor immediately, but it is worth asking for clearer reporting. A good vendor should always make sure you understand what they are measuring and tracking.
- They don’t offer areas for improvement. Revenue cycle management goes further than just the billing and coding office. A good vendor will take a holistic approach to revenue management and offer ideas for improvement. This should start with the front desk, and include everything from your communication methods to how you speak to patients about payments.
Your vendor is leaving money on the table if:
- Collection periods haven’t gone down. A good RCM vendor should be doing more than collecting payments. They should also be reducing the average amount of time it takes patients to pay. If they aren’t reducing and streamlining revenue collection functions, your cash flow could be more irregular than it needs to be.
- The vendor uses manual processes. A good RCM vendor will use the best technology to their advantage to identify holes in your revenue processes and plug those gaps. Automation allows for streamlined tasks and fewer opportunities for errors. If your vendor is resisting automation, that is a big red flag.
- There is a lack of automation in some processes. If your RCM service provider cannot automatically accept charges from your EMR, they are wasting valuable time on something that can be easily automated.
Your vendor may be doing more harm than good if:
- They don’t have a visible track record of success. There is a lack of positive word of mouth regarding your provider among your peers or industry.
- They can’t commit to deadlines. If your RCM service provider does not offer a guarantee for the turnaround of their services, they may not be prioritizing your work. A good vendor will be able to tell you how long they take to rectify difficult processes such as denied claims.
- They can’t work on your own software. If your RCM service provider will not agree to do your billing on your software – and insist on using their own, they are not being fully transparent with their services.
- They aren’t compliant. Staying compliant is one of the biggest challenges for in-house revenue cycle management teams. An outsourced vendor can put you at risk if they aren’t following the latest compliances such as ICD-10 and MU-3.
How do I hire a revenue cycle vendor that is a good fit?
While the above may feel like an exhaustive list of reasons for firing your RCM vendor, not every point is a reason for dismissal. If your vendor isn’t doing a good job of reporting, it could pay to have a conversation with them before letting them go. Ms. Lay recommends vendor performance/enhancement audits annually to ensure your vendor is meeting expectations.
However, if your vendor isn’t transparent with you and hasn’t shown any improvements to denied claims, wider processes, and collection times, there are plenty of vendors who will deliver an exceptional experience in these areas.
By now, you should have some idea of whether your healthcare revenue cycle management vendor is a good fit for your practice and is doing enough to improve your bottom line. The question still remains — how do I make sure an RCM vendor is a right fit for my company?
Ask potential vendors about the following areas of their service
Make sure they have other clients who exist in the same niche as your practice. Look for testimonials and reviews on why they are a good choice in relation to your specialty.
Ask about the technology they use and the processes they plan on improving. A good RCM vendor should have a response for improving every step of the cycle from before a patient makes an appointment to collecting after services rendered. They should consider patient experience, reductions in collections, and increases in revenue as areas to focus on improving.
Make sure they are open and willing to provide consistent reporting on a wide range of KPIs — particularly ones that your healthcare organization is interested in tracking.
Ask about what improvements they expect to achieve in the first two months. If they don’t have a firm answer (they should have a number in mind for increasing collections), find a vendor who can.
A potential RCM provider should make switching to their services easy. Make sure you go over timeframes, training and any costs involved in switching.
Finally, ask what kind of access your team will have to patient revenue data and whether you have access to the billing team when you need it. A good vendor will make sure you can access everything you need to make your patients and practice run smoothly.
Ms. Lay believes maintaining a great relationship with your vendor requires honesty, clear expectations, and collaboration between all parties. Vendors with an eye toward true partnership and a willingness to embrace your organization’s culture will use phrases like “What can I do for you?” and “How can we help?”
At the end of the day, a revenue cycle management vendor should be providing your healthcare organization with all of the data, analytics and measures to be able to assess whether they are making improvements to your collections, patient experience and bottom line. Asking yourself whether your vendor meets all of the expectations listed above is a good first step. The next is finding a vendor who truly values your practice and provides the transparency and processes needed to be a valuable partner.
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