In-House vs. Outsourced Revenue Cycle Management: What You Need To Know?

Good outsourced revenue cycle management will yield reasonable profits and open the gates to some much-needed cash to keep operations going. But the biggest decision to make is whether to outsource the operation or keep it entirely in-house. It can be a tricky decision, but do not worry; we will offer you a clear path to make this decision.  Let us now consider the advantages and disadvantages of both sides of the debate: whether outsourcing could be the change that your clinic requires. 

What exactly is RCM?

Before we start discussing whether to keep RCM in-house or outsource it, let’s define RCM. In simple terms, it is the overall process that pertains to the finance portion of healthcare—in essence, from the moment a patient first walks through the door to the time the hospital gets paid for the services rendered, including patient data verification, insurance claim submission, payment collection, and potential follow-ups as needed to keep things on track. Essentially, these are the steps necessary to ensure that your practice is compensated for the care delivered.

When running smoothly, RCM plays a huge role in keeping your practice’s cash flow steady. It ensures that every service you provide gets properly reimbursed. The real difference, though, lies in how well the process is managed.

In-House RCM: The Familiar Route

The majority of medical practices opt to manage the revenue cycle internally since they are familiar to having their own staff and systems. Although it offers oversight, this has drawbacks of its own. 

Pros of In-House RCM:

• Full Control: With an in-house team, you have complete oversight of the entire RCM process, from patient verification to claim submission. This gives you the flexibility to make immediate adjustments when needed.
• Direct Communication: If an issue arises with a claim or payment, your in-house team can address it quickly, improving communication and speeding up resolution.
• Familiarity: Your team knows the practice’s culture and processes, which can make the RCM workflow smoother without needing to explain your needs to an external partner.

Cons of In-House RCM:

• High Costs: In-house RCM requires a significant financial investment, from hiring specialized staff to training and maintaining RCM software. Continuous updates for compliance also add to the expense.
• Staffing Needs: Managing a full revenue cycle requires various roles—coders, medical billing specialists, claims managers—which means recruitment or cross-training staff. This can be time-consuming and costly.
• Billing Efficiency: Despite being familiar with the practice, in-house teams can still make mistakes due to administrative overload or a lack of specialized knowledge. 

Why Outsourced RCM Is the Future?

Outsourcing RCM is gaining traction among medical clinics that want to reduce administrative workload and improve billing productivity. Medical facilities are outsourcing their revenue cycle needs to RCM partners, who assist with the entire process.

Pros of Outsourced RCM:

• Cost-Reduction: Outsourcing will lower costs by eliminating the need to recruit and train personnel and collect and maintain expensive software. You pay for only what you need.
• Better Billing Efficiency: Outsourced RCM services for providers, with their specialists who handle more complicated billing issues, will navigate insurance codes and claims denials much quicker, leading to quicker reimbursements and fewer errors.
• Focus on Care: Outsourcing RCM is going carefree for medical practitioners, as it charms billing and collections into the hands of outside experts and lets them focus on their true passion: patient care.
• Scalability: As needs evolve, outsourced providers will scale up and down easily at a moment’s notice, allowing you to avoid hiring or letting go of staff. 

Cons of Outsourced RCM:

• Loss of Control: You give up some control over the revenue cycle, relying on a third-party provider to handle the process, which may slow decision-making.
• Communication Delays: Working with an external team may mean slower communication and resolution of issues.

Choosing Between In-House and Outsourced RCM for Efficiency

Why Outsourcing RCM Is the Future?

Whatever it may be, one of the final and crucial points to be taken into account is this: will it be in-house, or will RCM be outsourced, depending on what is most valued by the specific practice: control or efficiency? If you want to cut RCM costs, improve billing efficiency, and reduce staffing requirements, outsourced RCM is probably the best option. 

With outsourced RCM, you get way more than a service provider. You gain a financially committed partner. Let the experts do the hard work with healthcare revenue cycle management while you focus on what anyways matters: delivering quality patient care. 

That’s where Practolytics comes in. As a trusted partner in revenue cycle management, Practolytics is committed to optimizing your billing processes, increasing collections, and minimizing denials. We integrate seamlessly with your practice’s needs, offering scalable solutions that drive financial growth while saving you time and resources. 

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