Hospitals and healthcare facilities that outsource their revenue cycle management functions may want to think twice about doing so, according to a new study, which reveals that the returns may be less than expected.
Outsourcing revenue cycle management functions, such as the collection of unpaid accounts, may allow healthcare facilities to recover more money than those that perform the functions in-house, but the window of recovering that money is longer, according to the study, which analyzed the results at more than 900 healthcare facilities across the country.
The collection cycle for insourced debt repayment is 30 days faster (76.3 days vs. 109.4) than for outsourced debt collection activities.
Denial rates and the amount of debt that is written off is also higher at facilities that outsource their RCM functions rather than keep the work in-house, according to the study, which was conducted by Crowe Horwath.
The difference in denial rates between insourced and outsourced processes amounts to a loss of $22 million in annual revenue for an average 400-bed hospital, according to the study.
“Looking at the financial data, the benefits of outsourcing the complete revenue cycle seem to be marginal on some metrics, and nonexistent on others,” said Brian Sanderson, managing principal of Crowe healthcare services. “The decision to outsource any core function is complex, with considerations of access to talent, scalable technology and focused expertise – but performance should always be the key driver.”
