- Use of digital revenue cycle management tools in healthcare is hot right now and touted as a way to cut time and labor costs while capturing more payments. Having good performance data can help organizations decide which RCM approach is best for them, according to a new Crowe report.
- The Oak Brook, Illinois-based technology and consulting firm analyzed 931 U.S. hospitals that have implemented RCM systems and compared those that fully outsource their revenue cycles with those that run them in-house.
- Hospitals with insourced revenue cycles have a lower rate of point-of-service collections from patients than outsourcing hospitals (116.45% versus 19.68%). However, hospitals that outsourced revenue cycles wait on average 33 days longer to collect balance payments from patients.
At the same time, the data show patients are more likely to pay balances not covered by insurance when revenue cycles are outsourced — 38.72%, compared with 36.73% for insourced systems.
But insourced revenue cycles seem to have a better track record on insurance denials. According to the report, just over 9% of patient accounts are initially denied when revenue cycle is handled in-house, compared with 10% when it is outsourced. For a 400-bed hospital, this translates to upwards of about $23 million in additional revenue that needs be reeled in.
Final denial rates were also lower with insourced revenue cycles, at 1.65% versus 2.56% for outsourced systems, which boils down to pros and cons on both sides of the equation.
For hospitals that choose to outsource RCM, Crowe recommends looking not just at impacts on financial performance but also access to advanced RCM technology and centralized talent pools, as well as the ability to scale operations.
Revenue cycle management is in demand as higher deductible health plans force more consumers to fork out more of their own money to cover medical bills and providers struggle with delayed payments and unpaid balances.
All of the major EHR players are investing in RCM solutions. In February, eClinical Works launched a cloud-based platform for acute care EHR with computerized physician order entry and revenue cycle management for the emergency department, pharmacy and infection control for patients and scheduling, laboratory and referrals management.
Epic also offers an integrated EHR and RCM system. And last year, Allscripts bought McKesson's hospital and health system IT business, which includes HealthQuest revenue cycle technology.