Questions to Ask Before Choosing An RCM Provider

With healthcare providers facing a convergence of challenges, including workforce shortages, rising operating costs, legislative changes, and shifts in consumer behavior, financial pressures have intensified across the industry. Many costs that have increased such as labor, hospital supplies, and purchased services, are expected to stay elevated over the long term^[1]. Therefore, the providers have no option but to look for improved efficiencies in other operational areas if they are to remain in business.

Within the healthcare systems, focusing on improving efficiency is required with more attention given to the revenue cycle management. This entails looking for the services of a revenue cycle management (RCM) vendor such as a company that deals with the issues of submission of insurance claims, billing and accounts management, financial performance treatment, and so forth.

The growth of RCM services has increased in demand^[2] which has brought about growth in the sector as well as more options to providers. However, amidst this growth, the influx of new vendors underscores the importance for providers to conduct thorough due diligence before entering into partnerships. 

Prior to commencing on an RCM vendor search, it is of utmost importance to analyze and evaluate an organization’s existing revenue cycle. This introspection should focus on three critical questions:

1. What are the main functions of your billing services?
2. Where do you identify weaknesses in your current revenue cycle processes?
3. What are your most pressing operational needs that need to be addressed?

By addressing these questions internally, one can gain clarity on the specific criteria and qualities they need in an RCM vendor. Here are key questions to consider when evaluating revenue cycle management vendors:
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Question 1 – How do they approach denial management?

The management of claim denials is an important part of the revenue cycle which can affect the financial status of a hospital or a healthcare system. They not only take personnel hours for resolution, but can also negatively impact the bottom line even when successfully appealed due to processing inefficiencies. Essentially, the unregulated handling of claims constitutes a financial threat for hospitals and health systems. In addition to the general issue of claim denials, there are important RCM partners questions to evaluate their ability to manage the denials. These inquiries should delve into their follow-up practices for denied claims, including any minimum dollar amount thresholds triggering follow-up actions. Additionally, understanding their success rate in appealing denied claims provides valuable insight into their expertise. A robust denial management system should be a cornerstone of any RCM solution, ideally offering a platform demonstration to showcase its functionalities. The ideal partner should also possess a dedicated team of specialists adept at denial management strategies. In essence, a comprehensive denial management strategy is paramount, focusing on immediate action for denied claims, proactive prevention measures, recovery of lost revenue, and strategic escalation when necessary.
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Question 2 - What kind of training and support do they provide during the onboarding process?

To ensure a smooth transition and maximize the platform's benefits, it's ideal for medical billing service providers to offer on-site training for the staff. These comprehensive onboarding sessions can equip the team with the knowledge and skills to utilize the platform's full potential. Key topics covered in such sessions may include:

• Licensing: Understanding and navigating the licensing requirements for a healthcare practice within the platform.
• NPI Enumeration: Efficiently overseeing and coordinating the National Provider Identifier (NPI) information in the database.
• CLIA Certification: Proper management of Clinical Laboratory Improvement Amendments (CLIA) certification particulars will be ensured if relevant.
• Payer Mix Identification: Competently Recognizing and Handling Different Payor Classes Within Your Patient Demographics.
• Medicare and Medicaid Enrollment: Improving the efficiency of the Medicare and Medicaid program enrollment process via the solution.
• HRSA Set Up: Assisting with the establishment and administration of Health Resources and Services Administration (HRSA) programs if applicable.
• Electronic Data Interchange (EDI) Set Up: Configuring Electronic Data Interchange (EDI) functionalities for seamless communication with payers.
• Coding & Billing Strategy and Implementation: Learning effective coding and billing strategies within the platform to optimize claim accuracy and reimbursement.

By prioritizing user-friendliness and offering comprehensive training, medical billing service providers can empower healthcare organizations to leverage the full potential of their RCM technology platform, ultimately enhancing efficiency and financial performance.
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Question 3 - Can they effectively address the three major revenue challenges an organization faces?

Three significant challenges currently impede revenue generation for healthcare providers:

1. Elevated Back-Office Staff Time Dedicated to Claim Verification: The rich demand and requirement for human personnel to manually validate the claim however, takes a lot of time in the back office. This brings about inefficiencies as well as burdening human resources.
2. Escalating Claim Denials Due to Coding Errors and Insufficient Specificity: Inaccurate coding of the claims, or omission of pertinent details in the insurance claims may result in insurance companies rejecting these claims. These denials not only delay reimbursement but also necessitate additional effort for resolution, further impacting revenue flow.
3. Burdensome Documentation Requirements for Physicians: Being asked to fill up documents as a provider makes them spend less time in patient care. This discrepancy could provoke provider distress and even undermine the standard of healthcare services provided.

An RCM vendor that is active and resourceful can develop an all-inclusive coping mechanism to the aforementioned. Leveraging the services of a leading RCM provider aids healthcare institutions in maintaining a consistent flow of income without the need to recruit more back office personnel. The vendor’s expertise on efficient claim verification, appropriate coding practices, as well as documentation helps to enhance the revenue cycle.
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Question 4 - How is the pricing structured?

Revenue Cycle Management (RCM) providers typically offer three primary pricing models for their services:

1. Pay-per-use: This model charges healthcare organizations based on the specific services utilized. This can be appealing for practices with a predictable workflow or those seeking a la carte solutions.
2. Flat-rate subscription fee: The fixed monthly charge allows a certain limit of RCM services to be availed. This model brings some certainty in financial planning and may not, however, be appropriate in the case of practices that have variations in workload.
3. Collection-based fee structure: Under this model, the RCM provider receives a predetermined percentage of the revenue collected on behalf of the healthcare organization. This approach incentivizes the RCM provider to optimize revenue cycle performance but may not align well with practices with low collection rates.

One of the most important factors in choosing an RCM partner is the assessment of its pricing strategy and the comparison of costs against the services provided. Some RCM services are expensive, but they may cover the entire revenue cycle or even more. The complexity of your practice or sub-specialty should also be a factor in your decision. For instance, practices that have complicated billing systems or practices that have specific problems may need their RCM for a larger number of services, which may also determine the best pricing structure in such cases.
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Question 5 - What key performance indicators (KPIs) do they monitor to measure success and ensure alignment with our goals?

The primary factor that will determine the success of a relationship with an RCM company is its ability to track and evaluate the key performance indicators (KPIs) affecting a medical practice's financial health. An RCM partner, in an ideal situation, should be able to exhibit tracking of a wide range of KPIs based on the industry-standard MAP key metrics of revenue cycle management. These essential metrics may include, but are not limited to:

• Bad Debt: The percentage of outstanding patient balances deemed uncollectible.
• Cash Collection as a Percentage of Net Patient Service Revenue: This KPI reflects the efficiency of collecting payments from patients for services rendered.
• Clean Claim Rate: The percentage of claims submitted to payers that are processed without errors or denials.
• Cost per Claim: Average cost incurred for processing each claim.
• Resolve Rate: The percentage of denied claims that are successfully appealed and overturned.
• Cost to Collect: The average expense incurred to collect a dollar of patient receivables.
• Days in Accounts Receivable (AR): The average time it takes to collect payment on outstanding patient balances.
• Days in Total Discharged Not Billed (TDNB): The average number of days between a patient's discharge and the submission of a claim to the payer.
• Late Charge as Percentage of Total Charges: The percentage of outstanding patient balances subject to late payment penalties.
• Net Collection Percentage: The percentage of total charges collected after accounting for contractual adjustments and write-offs.
• Regulatory Compliance: Adherence to healthcare regulations (e.g., HIPAA, billing regulations).
• Coding Accuracy: Accuracy of medical coding practices and compliance with coding guidelines.
• Return on Investment (ROI): Financial returns generated from the investment in RCM services.
• Revenue Growth: Increase in revenue attributable to improved RCM services.
• Profitability Impact: Impact of RCM services on overall financial performance and profitability.

However, simply measuring these KPIs is insufficient. A strong RCM partner should actively demonstrate how they collect and meticulously analyze this data to generate actionable insights. This analysis should translate into tangible strategies for optimizing the revenue cycle, maximizing revenue capture, and minimizing financial losses. 
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Question 6 - Will we have access to dedicated account managers who offer prompt support?

It is crucial to select a RCM provider that offers access to a dedicated account manager. This dedicated point of contact should develop a thorough understanding of unique needs and operations.

Ideally, this highly skilled account manager should possess the following capabilities:

• Addressing Inquiries: Gives prompt and detailed response to any queries related to RCM system or revenue cycle management.
• Data Insights and Analytics Expertise: Making RCM revenue data analysis useful to make recommendations and improvements on the overall performance of revenue cycle.
• Troubleshooting Proficiency: Successful identification and correction of technical difficulties and issues that the staff experiences with the system.
• RCM Problem Management: Overseeing solving of the problems that the staff incurs from RCM that are operational in nature to avoid business interruptions.
• Regulatory Updates: Providing you with information on changes or announcements issued by regulatory bodies such as Centers for Medicare & Medicaid Services (CMS) in order to comply.
• Proactive Approach: Taking steps to prevent issues such as the absence of signatures from becoming a problem that impacts cash flow.

By prioritizing a dedicated account manager with this comprehensive skillset, one can establish a collaborative partnership with a RCM provider. This partnership will foster proactive problem-solving, data-driven decision-making, and a commitment to maximizing revenue while minimizing potential disruptions.
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Conclusion

Deciding on an optimal RCM provider is an indispensable verdict as it can influence an organization’s financial viability and operational efficiency. While healthcare providers are striving to cope with the challenges posed by impaired workforce, increased cost and changes in legislation for the better, an RCM partner that has been well chosen can prove to be beneficial. After completing a detailed internal evaluation, and engaging in deep, tactical discussions regarding issues such as denial management, training, primary revenue issues, pricing structure, KPIs, and support, one can be confident that an appropriate RCM vendor will be selected. Well structured RCM not only helps improve the revenue cycle management process but also enables health workers to devote much of their time caring for patients which improves the quality of healthcare and promotes the sustainability of the healthcare system.

If you are a healthcare provider and wish to know what questions to consider before choosing your RCM vendor, feel free to write to us at partnerships@homrcm.com.

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^[1]https://www.aha.org/costsofcaring

^[2]https://www.grandviewresearch.com

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