Outsourcing Medical Billing (RCM) & What it Can Mean for Your Practice

What is RCM in Medical Billing?

Medical billing is the process of submitting claims with health insurance companies to collect payment for services. Meanwhile, RCM is the process of optimizing the revenue cycle to improve cash flow and streamline administrative work.

So, what is RCM in healthcare? In the healthcare industry, RCM refers to the management of money from a patient’s initial appointment to their final payment. It encompasses:

• Registering new patients
• Scheduling appointments
• Verifying insurance eligibility and coverage
• Coding and billing services
• Submitting insurance claims
• Collecting payments from payers and patients
• Following up about outstanding balances
• Reconciling accounts receivable

The goal of medical RCM in healthcare is to increase collections, reduce bad debt, and improve patient satisfaction. Thus, RCM can benefit organizations of all sizes, from hospitals and clinics to physicians’ offices and individual providers.

What Does Effective RCM Look Like?

While most healthcare organizations have RCM practices in place, some are more effective than others. Inefficient RCM can restrict cash flow for healthcare practices, making it difficult to cover operational costs and invest in growth or improvements. 

Just take a look at these statistics:

• An estimated 80% of medical bills contain errors that may delay payments.
• Healthcare providers lose around $125 billion each year due to lost or unsubmitted claims.
• Over 50% of healthcare providers claim that billing and coding are some of their top RCM challenges.

Fortunately, healthcare organizations can solve these issues by refining their RCM. The right RCM practices can enhance accuracy, reduce delays, and improve cash flow, optimizing medical practices’ financial health and resilience.

Stages of the RCM Process in Medical Billing

Medical RCM is a multifaceted process that aims to optimize the following steps: 

• Patient registration and insurance verification – The revenue cycle starts as soon as a patient schedules an appointment. After collecting a patient’s personal and insurance information, you must verify their insurance eligibility and coverage.

  Accuracy is of utmost importance during this stage. After all, around 30% of medical billing errors are caused by incorrect patient information. By ensuring accurate data entry from the start, you can reduce the chances of claim denials and delays down the line.

• Charge capture and coding – Charge capture is the process of recording services and converting them into billable charges using standardized medical codes. Considering that 40% of medical billing errors stem from incorrect coding, getting this process right is essential to RCM. Accurate coding can help prevent underpayments and unnecessary revenue loss.
• Claim submission – Coded information can be used to create insurance claims. Once submitted, it can take one to four weeks to determine if an insurance claim is approved. Timely, accurate claims increase the chances of receiving prompt reimbursements. Since reimbursements make up around half of hospitals’ operating revenue, it’s a crucial step in the revenue cycle.
• Payment processing – Once insurers submit payment, it needs to be posted to patients’ accounts. Payment processing involves posting these payments to the appropriate patient accounts and reconciling them with the estimated reimbursements.
• Denial management – Over 70% of medical billing claims are initially denied by payers. Insurers may deny claims due to incorrect billing, missing information, or insufficient coverage. Denials can also occur when patients don’t qualify for the services or benefits requested. For example, some patients may have pre-existing conditions that negate their eligibility, while others may have yet to meet their deductibles.

  Denial management involves identifying the reason for the denial, correcting any errors, and resubmitting the claim. As with initial claim submissions, completing this process quickly and accurately is imperative.

• Patient billing and collections – If a patient still owes money after their insurer’s reimbursement, you can bill them for the remaining balance. Unfortunately, many people struggle to pay their medical debts on time. If you need assistance in securing a patient’s payment, you can initiate the collections process.
• Account reconciliation – Reconciliation involves reviewing patients’ accounts to ensure all of their services have been billed and paid for. Discrepancies, such as unpaid balances or overpayments, should be resolved promptly. Reconciling accounts regularly protects the financial accuracy of your records and prevents lost revenue.
• Compliance and auditing – From HIPAA to payer-specific rules, the healthcare industry is highly regulated. Failure to comply with all relevant regulations can result in fines, penalties, and legal issues. Unfortunately, over half of healthcare providers claim that regulatory changes present major challenges to their medical billing.

The Importance of RCM in Healthcare

In many industries, customers pay in full for products and services upfront. In the healthcare industry, insurance claims and reimbursements add another layer of complexity to the mix. Reimbursement rates are often lower than the cost of care, requiring hospitals to find other ways to make up the difference. 

Optimizing your RCM is a reliable way to increase your revenues. Healthcare organizations that employ efficient RCM practices save millions of dollars by:

• Streamlining their administrative costs
• Automating error-prone data entry
• Enhancing the accuracy of coding procedures
• Speeding up claim submissions and reimbursements
• Mitigating claim denials and appeals
• Increasing cash flow and reducing bad debt
• Ensuring up-to-date compliance

In addition to fortifying your organization’s finances, RCM can enhance the patient experience by enhancing transparency about insurance eligibility and payment obligations. Most importantly, RCM can free up your healthcare providers’ time to focus on delivering high-quality care.

Best Practices for Optimizing RCM

Since revenue cycle management is so important, you may be wondering how to optimize it. Here are a few steps to do just that:

1. Train your staff on RCM processes and technologies – To fulfill RCM functions accurately and efficiently, your staff needs to be up to date on the latest medical billing terminology, billing codes, regulatory changes, and in-house software.
2. Ensure accurate patient registration and documentation – Successful RCM starts with obtaining accurate patient information during registration. You can improve this step by leveraging automated systems that verify insurance eligibility in real time.
3. Conduct regular audits to identify areas for improvement – RCM requires continuous monitoring and optimization. Scheduled audits can uncover errors, inefficiencies, and compliance issues that may negatively impact your cash flow and profitability.

While you can implement these steps independently, there’s an easier solution—simply outsource your medical billing to a professional RCM service provider like Medisund. Our team can take care of everything from sending bills to insurance companies to collecting payments from patients and insurance companies. In short, we can do all of the tedious work for you so that you can focus on what’s important: taking care of your patients.

Benefits of Outsourcing Your RCM Medical Billing

When you’re running a medical practice, it can be difficult to track and optimize every single detail of your RCM. You’re busy enough keeping up with patient care and ensuring that you have the best equipment, staff, and supplies possible. 

That’s why it often makes sense to outsource your RCM to a medical billing company. Outsourcing allows you to focus on treating patients while someone else handles the administrative burdens. It can also be much more cost-effective than hiring a full-time, in-house staff to carry out the same tasks. 

Most importantly, outsourcing your healthcare RCM can bestow immediate improvements to your revenues. Here are a few notable statistics from surveyed healthcare providers:

• Around 70% claim that outsourcing medical billing improves their revenue management.
• Over 20% report higher collection rates after outsourcing their medical billing.
• Outsourcing medical billing can shorten the time it takes to collect payments by up to 20 days. 

How Does Medisund’s RCM in Medical Billing Work?

With Medusind, our support starts at the beginning of the patient visit lifecycle. With new and existing patients alike, we verify their insurance eligibility and benefits upon scheduling their appointment. This patient data is then automatically populated into the proprietary RCM technology we provide for your healthcare organization.

Once your healthcare providers render services, they can generate a superbill or provide clinical documentation to be coded onto a superbill. Either way, you can keep your existing electronic health record (EHR) or clinical software, since our CRM technology allows for seamless integrations. We’ll scrub and validate your superbills against our rules engine to ensure the claim is clean and has the highest probability of being paid on the first pass. 

After that, the claim can be submitted to the insurer. All claim information will automatically populate into MedClarity, our RCM technology, allowing for easy status tracking. Finally, our team can handle the denial management process, interacting with insurers directly to make sure they pay the claim to contract and reimburse your business appropriately.

How to Know if Outsourcing Medical Billing is Right For Your Practice

Now that you know what an outsourced medical billing process can look like, you may be wondering if it’s right for you. 

Here are a few tell-tale signs that it’s time to outsource this crucial process to a dedicated team of professionals:

• You know you’re not collecting the revenues that you should be.
• Your claims are quickly outpacing your revenues.
• Your only billing department metrics are bank deposit slips.
• You don’t have enough time to deal with denied claims effectively. 

If you’re still unsure if you should outsource, our team at Medusind can conduct a free analysis of your practice to offer more personalized guidance. 

Streamline Your Medical Billing with Medusind Today

RCM in medical billing can optimize cash flow, reduce errors, and enhance the financial health of your practice. However, it can also be quite complex. That complexity is the reason many healthcare organizations choose to outsource their medical billing. 

By allowing a team of professionals to handle your medical billing, you can focus your full attention on providing excellent patient care while enjoying the peace of mind that your profit margins are protected. 

If you’re interested in outsourcing, Medusind can help you develop a strategy to enhance your RCM in an economical way. Thanks to our 20+ years of experience, our customers enjoy:

• CPT and ICD-10 coding for 3 million+ charts
• 10% to 30% increases in cash collected
• 95% average clean claim rate
• 30%+ improvements in self-pay collections 
• 20% improvement days in A/R

Discover how Medusind can help transform your medical billing today.