Here’s what 2016 taught healthcare CFOs about revenue management
Battling reimbursement challenges, shrinking margins and compliance hurdles hospitals are exploring options to cut back on costs and increase revenue. The decision to work with professional revenue cycle management companies can be tied back to the bottomline pressures healthcare organizations face. A survey by Black Book reflects this trend.
According to the survey 54% of healthcare CFOs believe outsourcing will help them improve their financial health. And that the outsourced RCM market is growing at a 27% rate. 49 percent of hospital CFOs said outsourcing, including offshoring, is becoming an extremely viable option in 2017.
But there is a blip in the bubble…
Okay. So moving RCM functions out of the office seems to be just what the doctor ordered. But the disturbing and recurrent pattern of healthcare CFOs, routinely switching RCM systems and offshore companies, brings to light the fact that an ill-informed decision is akin to flying from the frying pan to the fire.
Before taking the quantum leap it is imperative that the revenue cycle management directors and CFOs conduct a thorough revenue cycle audit. Why? Because the revenue cycle of a hospital has a lot of moving parts and identifying poorly performing areas enables CFOs to know what to outsource and when and to whom.
Case in point
An anesthesiology group practice in Tampa, Florida outsourced their coding processes to an offshore firm. And their revenue performance was still abysmal. The medical group conducted a third party audit of their revenue cycle and found out that the faultlines lay in poorly performing payer contracts. After auditing their contract management process the group practice has been able to take corrective and incremental steps to building stronger contracts. “We outsourced the wrong process and it got us nowhere. Understanding your revenue cycle truly helps”, explains Cathy Dues, the founder and CFO of the anesthesiology group practice.
A thorough revenue cycle audit should consist of…
- Medical coding audit
2. Contract performance audit
3. AR audit
4. Denial prevention audit
5. Compliance audit