Uncertainty over which vendors offer the best revenue cycle management platform for them is motivating a growing number of hospitals and physician groups to outsource revenue cycle processes in lieu of making a large investment in software, according to a new report by BlackBook Research.
"As hospitals and physician practices grapple with intense pressure to optimize revenue cycle management processes, outsourcing has emerged as a powerful solution to the challenges of a rapidly changing healthcare model," said Doug Brown, managing partner of BlackBook, in a statement announcing results.
According to the survey, 83 percent of hospitals now outsource some accounts receivable and collections, 58 percent of hospitals outsource some contract management, 55 percent of hospitals outsource some denials management and 68 percent of physician groups with more than 10 practitioners now outsource some combination of collections and claims management.
Learn on-demand, earn credit, find products and solutions. Get Started >>
Looking down the road, Brown says the expected impact of ICD-10 on the revenue cycle will prompt providers to outsource other revenue cycle functions as well.
"Claims management appears to be the next for vendor opportunity as ICD-10 effects begin to impact cash flow, followed by eligibility and benefits management," he said.
Meanwhile, healthcare provider financial decision makers are casting increasingly critical eyes toward their existing vendors. Nearly 79 percent of health organization chief financial officers said next year they need to eliminate financial and coding technology vendors that aren't producing a return on investment, while more than half believe outsourcing revenue cycle processes will make their organizations more efficient and improve their financial health.
Among hospital CFOs, there's little doubt that outsourcing is the answer, at least for now. About 80 percent of hospital CFOs consider outsourcing to be the best stop-gap measure until new software is selected, purchased and installed, they said. Meanwhile, more than two-thirds of hospital CFOs seek new outsourcing agreements extending at least 18 to 36 month.
Larger systmes are even more bullish on the trend. The survey found 93 percent of larger hospitals (more than 200 beds) anticipate supplementing their existing revenue cycle software with outsourcing services in the first quarter of 2016 as fallout from ICD-10 lilkely affects cash flow and more value-based reimbursement opportunities are presented.