Ask any reputable outpatient therapy clinic to name its top priority as a business and there’s no doubt “delivering the highest quality patient care” will be number one every time. Of course, achieving the best possible outcome for our patients is why we come to work every morning. But fulfilling that mission requires more than a team of highly trained and compassionate therapists to administer treatment—it also requires a well-oiled back-office operation to ensure the practice runs smoothly; coordination with hospitals, physicians and other critical third parties; and a seamless billing and reimbursement process.
That’s why an increasing number of practices are turning to outsourcing as a way to augment their teams and optimize functions like billing and overall revenue cycle management (RCM). A recent article for Revcycle Intelligence cites that demand for outsourced RCM services among hospitals has increased 86% between 2015 and 2019. Outpatient therapy practices are following suit for good reason. Specifically:
-Expertise – Healthcare RCM is tricky. There are multiple parties involved, from insurance companies to referring physicians and hospitals to the patients themselves. There are also federal and state rules and regulations to be followed, mandates that require specific coding and certain documentation to justify the type of service provided by the appropriate therapy discipline. And that’s just the beginning. For an outpatient practice, hiring and training billing personnel fluent in these details is no easy task. In fact, these processes are so specialized that many practice owners—who are often therapists themselves, not financial experts—don’t understand how they work. So building and maintaining an in-house team, with the backup to cover things like vacations and turnover, becomes a challenging proposition.
-Infrastructure – A successful billing operation requires significant technology investment and ongoing maintenance. This includes billing software, reporting packages, integration with EMR systems and other internal applications, upgrades and hardware—plus the IT staff to support it all. Outpatient clinics opting to manage billing and collections internally have to lay out a considerable amount of capital for these capabilities. They also need to make sure those systems and the data they contain are secure, “audit-ready” and compliant with the appropriate regulations at all times. There are also physical space requirements to consider, especially if the practice has plans to expand. The space needed to manage billing and administration, including equipment, hardware and software, takes away from space that could be used to treat patients or launch a new specialty program.
-Efficiency – Limited resources and a full workload can force staff to have to choose between tending to patients and addressing time-consuming, yet necessary administrative tasks. This is especially true in the case of billing and reimbursement, which requires staff to spend valuable time checking patient eligibility, getting authorizations and dealing with payers, which often means waiting on hold or getting passed from one person to the next while fighting for payments. This is the reality of healthcare billing. In a future blog post, we’ll discuss how outsourced RCM services can not only alleviate these headaches, but free owners to rethink the role of the front-desk—moving staff away from low-value phone-jockeying and paper-shuffling to revenue-generating patient-liaison positions.
-Scalability – At the end of the day, outpatient therapy is a business. As in most other sectors, growth and expansion are common goals. Small practices may want to add patients and services. Larger practices or chains may be looking to add facilities or expand into new regions. In either case, they’ll need to adapt their processes and infrastructures to align accordingly. But when is the right time to bring on staff, invest in training and technology? What’s worked so far may change depending on local market conditions, competitors and patient preferences. An outsourced RCM service provides the flexibility to scale up or down, along with billing best practices and knowledge of state and regulatory requirements to help guide a practice along its growth path.
These are just a few of the factors to consider when evaluating whether to “build or buy” RCM services. While the needs and circumstances of each practice differ, it’s worth asking a few baseline questions, including:
- Do you see a lot of back-office turnover?
- What is your knowledge level of outpatient therapy regulations, both state and federal?
- Is your practice experiencing growth or do you have plans to grow over the next year?
- Do you have a handle on where you need help?
- Is your billing function detracting staff from other activities, such as patient care and marketing?
To learn more about the pros and cons of outsourced billing, download this tip sheet or read about Optima’s RCM services.