The revenue cycle decision
Should your practice handle billing in-house or contract with a revenue cycle management vendor? Here's how to decide.
In these challenging times for physician practices, the business side of medicine requires navigating reimbursement declines and rising costs while conforming to the Affordable Care Act and transitioning to the International Classification of Diseases-10th revision (ICD-10) code set. And while delivering high-quality care remains physicians’ top priority, sound revenue cycle management nonetheless dovetails closely with the success of their practices.
About 35% of respondents—mainly acute care hospitals and clinics/physician practices—to a 2014 survey by the American Health Information Management Association/eHealth Initiative believe ICD-10 will have a negative effect on their revenue; 18% are uncertain of its impact; and 27% haven’t conducted financial impact assessments.
Many physicians ponder whether to seek outside expertise for revenue cycle management. An estimated 95% of independent physicians perceive outsourcing these services and technology processes as the most sensible solution, according to the Black Book Report 2015, a healthcare market research entity. Of those practices, 64% are contemplating a combination of new software and outsourcing help to improve their revenue cycle management systems.
Making the decision
Before making these decisions, a practice must weigh the pros and cons carefully. There are multiple aspects to consider, such as the size of the practice and the capabilities of its staff.
“Physicians really need to approach the question of insourcing or outsourcing collections from a scale and internal capability perspective,” says Jim Lazarus, managing director of strategy and innovation in revenue cycle solutions at The Advisory Board Company, a healthcare consulting firm in Washington, D.C.
For a practice with 15 or fewer physicians, internal billing is usually a more cost-effective approach. It may be prudent to hire a capable person to focus on billing, but to serve also as a “jack of all trades,” overseeing medical records and providing other office support, Lazarus says.