Fee-for-service reimbursement is pretty cut-and-dried for revenue cycle managers. Profits revolve around billing, collecting from insurers and resolving patient claims on an individual basis. That’s not the case under fee-for-value models, where insurers capitate reimbursement for certain populations — a scenario that has revenue cycle management (RCM) leaders scrambling for ways to handle changes in revenue, compliance and resource allocation.
In this Roadmap to Partnership blog post, I’ll discuss the importance of conducting a business assessment of RCM operations (the Roadmap to Partnership series intro can be found here). The assessment is a critical step to help CFOs decide whether partnering with an external revenue cycle firm makes the most sense.
Step 1 – Assess your current revenue cycle.
To truly understand the current state of your revenue cycle, CFOs and other leaders sChould measure staff productivity, efficiency of processes and the level of automation. Careful study will help determine how RCM functions compare with the rest of the industry, and whether investment in an outside partnership will be more effective and affordable.
Step 2 – Identify a goal or desired objective.
If the decision is made to engage an external RCM partner, health system executives need to determine what they want to accomplish by doing so. Is the move about strengthening capabilities in value-based care? Can the organization put funds required for new RCM technologies toward clinical functions if a partner takes control of revenue cycle responsibilities? Will it improve compliance?
Step 3 – Evaluate and quantify partnership opportunities.
With clear goals in mind, the next step is to dig into the numbers behind keeping revenue cycle functions in-house or contracting with an outside partner. Internally managing RCM requires continued investment in new technologies. Such investments may take money away from clinical care. Leadership should determine whether RCM is a core competency or whether it draws attention away from the health system’s central mission of providing quality patient care.
In my next post, I’ll discuss RCM partnership strategies, what alternatives are available, and how to evaluate opportunities that exist for external partnerships. To view the full Roadmap to Partnership white paper, click here.
Read part 3 of the Roadmap to Partnership series
About the Author:
Le Anne Trachok, Chief Strategy Officer
Le Anne Trachok leads enterprise strategy and innovation with a focus on understanding client needs, industry trends and new opportunities. Her team is responsible for solution design that encompasses services, technologies, content and analytics to improve financial performance and the patient experience for hospitals and health systems. Trachok also oversees and champions Optum360’s brand and culture.
With more than 20 years of experience in revenue cycle management and hospital advisory services, Trachok previously led Dignity Health’s revenue cycle function. Prior to that, she served in leadership positions at Arthur Andersen, UCLA Medical Center, and Tenet Healthcare.
Trachok holds a master’s degree from the University of Notre Dame’s Mendoza School of Business and a Bachelor of Arts degree in business administration from Washington & Jefferson College.