Is BPO the Solution for Back-Office Shortages?

Posted on September 22, 2022 by Kylene Ordway

Unfortunately, the healthcare industry faces a massive labor shortage, extending beyond clinicians and nurses to the back office. The back office is the part of a medical practice that patients rarely see. The “business” side of the practice deals with medical coding, debt collection, and insurance claims.

Shortages of crucial staffing positions, such as claims specialists, affect every aspect of the practice because they impact the revenue cycle. The answer to addressing back-office staff shortages might be BPO.

The benefits of outsourcing back office jobs have become clear in recent years. Business process outsourcing (BPO) helps practices to optimize and better manage their healthcare revenue cycle from insurance claims to debt recovery.

Putting the Focus Back on Patients

People don’t like to think of healthcare as a revenue-based business because it is about the patient experience. The fact is without back office services, the patient experience suffers. Third-party BPO services can play an intricate, although not direct, role in improving patient care.

The tasks performed in the back office of a healthcare business are time-consuming and redundant. Outsourcing these primarily administrative duties reduces clinicians’ workload, putting their focus back on the patients.

Understanding the Revenue Cycle

BPO typically focuses on the positions impacting the revenue cycle, but what does that mean? In its most simplistic form, the healthcare revenue cycle begins with creating a patient account and ends with collecting all funds owed on that account.

This cycle can break down at many points. For example, a specialist that sees a patient with no referral might have to fight with the insurance provider to get paid, depending on the policy. Coding errors and inaccurate data entry are enough to impact the revenue cycle. Each leak in the revenue cycle means lost time and possibly income.

For this reason, back office jobs in healthcare tend to be very specific. The various back office practices contribute to creating a healthy revenue cycle. A healthy revenue cycle means better workflow at the front end of the healthcare system, where patient care is critical.

Staff in the back office utilize complex tools that help keep the revenue cycle intact, such as:

• Financial clearance
• Patient information confirmations
• Charge capture
• Charge entry
• Claims management
• Statement processing
• Payment posting
• Denial posting
• Insurance follow up
• Denial management

Staffing shortages in the back office of any healthcare business are like having breaks in the armor. They open up holes that can impact the revenue cycle and potentially kill the business. That is bad for patients and caregivers.

Why Consider Business Process Outsourcing?

For years, the healthcare industry has tried to avoid outsourcing because of the concern of protecting the patient experience. Finding exemplary third-party service gives the front-of-house staff more time to focus on patients. Also, outsourcing helps stimulate business growth, benefiting the patient and the staff.

Business process outsourcing offers an actionable solution as shortages grow in traditional back office positions such as debt follow-up and collection. However, the healthcare revenue cycle is complex, and any cog in that wheel has an impact.

The distinctive benefits that come with BPO include:

• Shifts patient focus – BPO takes over time-consuming tasks, so the front-of-house staff has more time for patient care.
• Cost-effective – BPO offers a cost-effective way to reduce overhead. Lowering operational expenses by outsourcing costs less money and time than training in-house staff. That money can go back into the business and further enhance patient care.
• Re-shift energy – Quality care and enhanced patient services become the only concern when back office tasks disappear. With outsourcing, practices have more time and money to grow what they can offer their patients, such as adding specialists to the service.
• Reduce mistakes – There is nothing simple about the healthcare industry, including the business aspect of it. Health insurance portability and accountability rules cost money if not followed correctly. An effective BPO partner is more likely to stay up-to-date on the regulations and reduce the risk of fines.

Business process outsourcing frees things up using specialist staff and automation.

Automation improves not only labor expense but also helps to improve timeliness and accuracy of work performed.

– Jon Neikirk Executive Director, Revenue Cycle at Froedtert Hospital, WI

The goal of BPO in the healthcare industry is to improve patient outcomes by filling those gaps that can cause revenue cycle leakage. BPO keeps costs under control, allowing for better patient engagement. Healthcare providers can outsource standard BPO services to improve their revenue cycle, benefit their patients, and reduce the backlog.

In some instances, it does make sense to outsource. It’s vital to ensure that your revenue continues to flow.

–Sheila Augustine Director, Patient Financial Services at Nebraska Medical Center

BPO services use specialized teams and innovative technology to process large volumes of medical claims quickly and accurately. BPO helps maintain the accuracy of these claims to avoid disrupting the revenue cycle.

Use Outsourcing to Cover Back Office Shortages

BPO provides healthcare organizations with a solution when they have back office shortages. It allows them to send tasks that impact their revenue cycle to specialists trained to do them.

Claim Processing

The billing process generally starts with filing a claim to an insurance agency. That initial claim is one of the most critical. When done right, it can lead to timely and accurate payments. When done wrong, it will lead to payment reductions or denials.

From a back-end perspective, I think that denials continue to be part of the forefront, and with staffing needs, it can prove challenging to stay in front of them. Therefore, it’s very important to trace a denial back to where it started to be proactive in the future.

– Jon Neikirk Executive Director, Revenue Cycle at Froedtert Hospital, WI

Claims Processing to Third Party Payers

Third-party payers such as group insurance plans or Medicaid have strict rules when it comes to billing. And, to make things more complicated, those rules change periodically. Outsourcing claims processing can keep you in compliance with regulations to keep the revenue cycle moving and avoid fines and penalties.

BPO services ensure their specialists stay updated on all the regulatory changes from complex government programs like Medicaid and Medicare. Sometimes collection from third-party payers requires extensive follow-up, as well. In addition, BPO has the staffing to manage resubmissions and appeals.

Denial Specialists

Denial specialists work with the health network or organization to resolve denied insurance claims. They review the documents, find the sticking point, and follow up on the claim. The goal is to resolve the claim and get paid for the service.

This role takes organization and resilience, but it also takes expertise. No two insurance providers have the same rules when it comes to claims processing or appeals. A denial specialist knows how to cut through the red tape and find the root of the denial to address it.

Legacy AR Wind-Downs

Legacy AR is at the top of the list when healthcare facilities transition to a new revenue cycle management or hospital information system. In addition, the combination of new technology and changes in the healthcare industry make upgrades to new systems sometimes necessary.

Dealing with leftover accounts receivable costs money and time when done in-house. On top of that, a new system means the staff has to spend that valuable time learning how to use the platform to avoid slowdowns.

One of the most challenging parts of a transition is dealing with legacy accounts. It often means staff must work on two separate systems until the backlog clears. Outsourcing the legacy wind-down eliminates the need. Instead, the current staff can focus on getting the new system live while the BPO works on the legacy AR.

Aged AR Clean-Up and Follow-Up Specialists

Aged AR clean-up is one of the essential parts of managing collections. BPO specialists will work to settle outstanding balances from insurance companies or third-party payers and provide supporting documents.

They can help delinquent patients account holders work through a payment system or understand how to appeal denials. They can offer aggressive follow-up that allows the removal of delinquencies from the system. They offer to rebill when necessary and regular account reviews.

Finding the Cure to Back Office Shortages

The healthcare industry is facing challenges right now. There are chronic shortages in nursing staff and clinicians among an escalating need for healthcare services. The World Health Organization (WHO) estimates that by 2030, one in every six people will be over 60.

The aging population puts stress not only on healthcare services but on the labor force, as well. Add to that the need to make medical care more affordable in the U.S. without sacrificing quality, and it’s not hard to see why there is a shortage in the back offices, too.

The solutions for providing better quality health services to more people, such as telehealth and remote patient monitoring, emphasize the need to keep the back office strong. Business process outsourcing is a cost-effective cure for back office shortages in healthcare.