Outsourced vs In-House RCM: Which is Best for Your Lab?
Billing is time-sensitive and complex matter, especially for laboratories. When a lab is small and has a limited staff and budget, the management of its finances may fall on one or two admins. But as the practice grows, the staff in charge of its revenue cycle management (RCM) will need to devote more time to it.
In addition to needing to remain on top of government regulations, staff will be required to keep up with the nuances and continuous updates of RCM software. Keeping your computer system updated will be a priority, so it stays compatible with the RCM application. And with larger patient data to manage, the lab billing software will require extra vigilance in its handling as these are very attractive targets for criminal hackers.
It’s clear that as your laboratory practice grows, the financial elements of the business become even more complicated. Maintaining your RCM in tip top shape ensures you are providing the best possible patient outcomes and a reliable and robust income for your practice. When trying to determine whether you should keep your billing in-house or outsourcing it, a good guideline to use is to go by the number of claims you manage per year. If your patient population is small and you submit less than 500 insurance claims per year, billing in-house means lower cost as these types of practices typically do not generate enough income to cover the fixed costs involved with third-party billing. It’s important to note, however, that in-house billing requires that your staff remain knowledgeable and experienced with billing software and up-to-date on all government regulations.
Most successful laboratories are faced with the need to scale very quickly so the remainder of this article will focus on the advantages of outsourcing your billing. If you are still on the fence about whether you should keep your billing operation internally, keep in mind that your billing procedures will shut down for an unknown amount of time if whomever is managing it takes a leave or quits. A practice with high employee turnover rates is a good candidate for outsourcing billing and coding. This is important because workers need to understand HIPAA privacy regulations and the need to protect sensitive patient data. Those are skills that take a while to absorb, so growing practices or those with high turnover will greatly benefit from outsourcing.
Reasons to Outsource your Revenue Cycle Management
1. Reduces Staffing Requirement
To set up a billing system efficiently, the average lab practice needs to hire at least 1-2 properly trained billing and coding employees – per insurance provider. If you’re not looking to assemble such a large staff given the number of healthcare providers you work with, outsourcing your revenue cycle management processes may be the best move.
2. Increases Focus on Patient Care
RCM is time-consuming. Missing one code or making a billing error can lead to hundreds if not thousands of dollars in lost income. You’ll also spend hours going back-and-forth with insurance and collections companies which robs you of time dedicated to serving your patients. If you are tired of spending hours each week filling out paperwork, outsource your RCM services so you can focus on the part of the job that matters most.
3. Makes Reimbursements Timely
Outsourcing RCM leads to timelier payment of bills because the third party can draw on more expertise than your own financial department. With a third party doing medical billing for you, expect that the error rate will go down. This speeds up reimbursement. When you have a dedicated partner handling your RCM you don’t have to worry about all of the paperwork and meticulous monitoring that revenue cycle management involves. An experienced third-party billing company can handle all your interactions with insurance companies, billing reviews and medical coding. Their focus and precision will ensure your lab maintains its income stream without leaving money on the table.
4. Improves Regulatory Compliance
Federal, state and local governments establish and monitor industry regulations, payer policies and compliance. If you fail to comply with rules and regulations, you could lose your license or end up paying a huge settlement. The fact that rules and regulations are constantly changing makes compliance even more important. A qualified RCM provider can help you stay updated and reduce the risk of noncompliance.
5. Provides Automatic Verifications.
Improper verification and eligibility is the number one cause of claims denials. If your staff is currently in charge of verifying coverage, medical necessity, or other claims information, outsourcing your verification services will improve accuracy and reduce the number of hours utilized on procedures that are easily managed by an automated system. Better yet, you won’t need to invest time and effort into keeping staff up to date on coding changes.
6. Increases Monthly Cash Flow
In order to make a profit, you need to maintain your RCM operations throughout the year, no matter the season. If your RCM staff is in-house, though, there are certain times when people will be on vacation or attending events. This is part of operating a business, but it can also slow things down and create a billing backlog. If most of your RCM staff take off at the same time, or as mentioned previously, your in-house billing person suddenly leaves the practice, your bills will just sit there until they return or you hire a new, qualified billing person. By partnering with an RCM company, you will never need to worry about a delay.
7. Decreases Stress
Operating a medical laboratory is exhausting. There are customers to connect with, hires to make, day-to-day operations to manage and more. At the end of the day, this leaves very little time for one of the most important aspects of your business — finances. Partnering with an RCM vendor takes some of the weight off your shoulders. It also puts the number crunching and tallying into the hands of trained and qualified professionals, allowing you to avoid costly coding or billing mistakes.
Ready to take your billing external? We, at Innovative Lab Solutions, have more than 30 years of experience providing cloud-based RCM services to laboratories all over the U.S. Our dedicated team of billing specialists and billing managers have the laboratory-specific expertise that’s needed in today’s complex healthcare space. With a first pass claims rate of 98% and an EHR same-day encounter close rate of 88%, you can count on us to streamline your operations significantly.
If you outsource to us your RCM needs, you’ll have a lot less to worry about. You’ll pay a flat rate each month and receive high-quality billing services. If you desire to upgrade or downgrade service at any time, you will have that option, too. Call us today to learn more.
