Outsourcing Your Revenue Cycle Department Makes Good Cents
With the substance use disorder industry in a state of flux, outsourcing your revenue cycle department is something that should be discussed, explored and considered – especially if you have under 200 beds and are relying on a staff of less than five people to get the job done.
A general rule of thumb is; for every $100,000 in revenue your center collects, you need at least 1.5 – 2.0 FTE to manage the benefits, utilization and billing departments. If you have 100 beds, you will need a minimum of four persons to effectively manage the entire revenue cycle.
Anyone that owns or operates a substance use disorder, mental health, eating disorder or psychiatric center with less than 200 beds will profit substantially from outsourcing their billing department to a third-party biller. Not just because of payroll savings, but because of the human factor. Even if you could hire four staff members, two excellent and two mediocre, what will happen when one goes on vacation for two weeks? Or takes a leave for six weeks? This staff of four cannot effectively manage the skills and tasks necessary to produce maximum results that an expert revenue cycle management team with decades of experience in the field can. It is just not possible.
As a judicious business professional, you already know that having one person doing only one job, is never a sustainable solution. Also, assuming that just because someone you hired is trained in credentialing, single case agreements, out of network contract negotiations, rate negotiations, sending medical records and other ancillary tasks like writing appeals and following up on denials, doesn’t mean that:
# 1- they have the extra time to do every critical task and
# 2- they are going to achieve the maximum outcome for the patient or the treatment center
A responsible, outstanding revenue cycle firm will have individual experts on staff in addition to the utilization, billing and collections specialists. The RCM tasks, when completed timely and correctly, will produce significant income. Completed hurriedly by someone who is not an expert, you will likely see no return on investment.
Case in point: Let’s say that your employees are completing ancillary tasks. With only four employees in the department, who is making collections calls? And if the utilization specialist goes on vacation, who is doing UR? And if the nurse is doing UR, who is passing out the meds? And if the tech is passing out the meds…. You get the picture. The trickle effect is exactly what you want to avoid, the patient suffers as well as your financial sustainability.
If you view the outsourcing of your revenue cycle management as an expense, then frankly you’re missing the point – Outsourcing is an investment that can return multiples with the right RCM company.
When RCM is outsourced
- You will see an increase in key performance indicators (KPI)
- You will be released of the expense of paying and managing a staff of at least four people, remember this includes works space, equipment, disability & health insurance to mention a few
- You will know that a seasoned, established, experienced team of professionals are handling every detail of your revenue cycle
- You will produce additional income and improve your EBITDA
Less money is left on the table, you and your team are not stretched to a snapping point, and can focus on your intended purpose, helping your patients achieve long term sobriety. This is a savings that you will not be able to attach a dollar amount to.
The behavioral health industry has seen many changes in the last five years. The profit margins are getting thinner and thinner. To risk losing income because you hired someone who claimed to be an expert, or they don’t have the time to successfully complete all of the required RCM tasks because they are covering several other duties, is both correctable and avoidable. For smaller, privately owned centers to successfully run, remain open and carry a healthy EBITDA, outsourcing the revenue cycle management is one of the most cost effective, sound business decisions one can make.
The right revenue cycle management firm will be completely transparent, providing you with the analytics you need to make sound financial decisions. When you invest in a 3rd party RCM company like Integrity Billing, you can get back to fulfilling the mission of your center.
Leaders in the SUD and MH industries agree that their time is best spent focusing a center’s outcomes and not a center’s income. They treat their patients and leave the income to the RCM experts.