Ambulatory Revenue Cycle Management Services 2023
Exploring Provider Perceptions of Outsourcing amid Mounting Pressures

Provider Organizations Struggling to Manage Changing Authorization Requirements and Lower Allowable Charges

Staff Recruiting and Retention Difficulties Increase Need for Outsourcing

Workforce challenges are prompting provider organizations to increasingly consider outsourced RCM services, with nearly two-thirds of respondents indicating these difficulties influence their outsourcing decisions. Respondents report having to operate under shrinking staffing and training budgets, making it difficult to recruit and retain competent candidates and satisfy candidates’ demands regarding salary and benefits. The high turnover leads to employees who have not gained necessary expertise. Understaffed clinics with undertrained employees are consequently unable to secure the necessary revenue from claims payments. Thus, many organizations outsource to meet their basic revenue targets for collections, A/R days, etc. While respondents view outsourcing as expensive, they say it is frequently more affordable than the expenses tied to recruitment, training, and employee benefits.

“Since COVID-19, we have been extremely short staffed. Our organization is like a revolving door. The staff members don’t know how to actively use the system correctly because they don’t stay long enough to get familiar enough with it.”  —Administrative assistant

Provider Organizations Want Firms That Are Accessible, Transparent, and Invested in Their Success

Provider organizations stress the need for accessibility and transparency in their relationships with RCM services firms, highlighting the value of quick resolution, familiar service representatives, and the ability to easily account for the firm’s actions, accuracy, and follow-through. Clinical leaders often report not having time to double-check claims-submission accuracy, hunt down service representatives, or train new hires on their clinic’s billing and treatment intricacies. When asked what is missing from their current RCM services firm, respondents report lacking a partner who is invested in their success. Along with immediate revenue increases, organizations want education, best practices, and long-term strategies for improving their revenue cycle workflows. Despite RCM services firms being paid a percentage of collected revenue, the lack of reporting and transparency leads respondents to doubt their firm’s dedication to each claim, thus hindering the perceived ROI. To combat this, respondents would like detailed information on claims collection attempts and numerical data supporting changes in claims revenue as well as proactive communication about upcoming billing changes affecting specific patient bases.

“Feedback is missing from the services the vendor currently provides. We want the vendor to let us know what we are doing wrong so we don’t keep repeating the same mistakes.”  —Director

Overall Perception of Offshore Support Is Generally Negative; Provider Organizations Want Firms Who Understand Specialties and Local Regulations

Whether RCM support is provided domestically or outsourced offshore significantly impacts provider organizations’ decisions. Most respondents perceive offshoring negatively; nearly two-thirds say it would affect their decision to go or stay with a firm. Concerns include different operating hours, potential language barriers, and issues with understanding domestic payer processes. This negative perception extends to those with past negative experiences and even those yet to use offshore support; both parties cite concerns about communication and inaccurate information. However, customers who report positive past experiences with offshore support (with either a current or previous vendor) are more open to cost-saving foreign teams. Despite organizations’ resistance to offshore outsourcing, the concerns they raise (i.e., wanting local expertise and easy communication) mirror concerns surrounding domestic support. Firms that provide offshore services can still satisfy customers by meeting key needs for accessibility and accuracy.

“When a firm uses offshore resources, it is hard for us to get them to do the right things. Offshore workers don’t necessarily know the billing guidelines for our state. The firm’s resources are doing the rote work of data entry and of posting payments, but they are not posting things correctly, and we are going back and forth with them.”  —Billing representative

About This Report

This report is a perception study designed to help readers understand how ambulatory provider organizations perceive outsourced RCM services and what deficiencies still exist in the market. For this report, KLAS used a supplemental evaluation to interview 61 primary and specialty care clinics and asked them the following questions:

1. What metric does your organization look at to determine the effectiveness of your RCM services firm?
2. Have workforce challenges played into your staffing and outsourcing decisions? If yes, how?
3. What key needs does your RCM services firm need to meet for you to have a successful relationship with them?
4. What changes in payer dynamics have you seen in the past year that have impacted your revenue cycle?
5. What is missing from the services your firm currently provides that would help your revenue cycle outcomes?
6. What is your perception of RCM services firms that use offshore resources/services?
7. Would a firm’s use of these resources impact your selection of the firm?