Providers Are Outsourcing Revenue Cycle Services Amid Workforce Shortages

Ambulatory provider organizations are outsourcing their revenue cycle management services as changing payer requirements and workforce shortages create challenges, according to a KLAS report.

The report reflects responses from 61 primary and specialty care clinics.

Respondents said that recent changes in payer processes and requirements have led to confusion and additional work, including increased A/R days, denials, and time spent processing appeals and seeking payer guidance on coverage policies.

Payers have implemented confusing claims submission protocols and increased prior authorization requirements, according to provider organizations. Consequently, payers are frequently denying previously covered claims and reducing payment allowances.

In addition, providers have been seeing more patients with Medicare and Medicaid, leading to lower reimbursement and an increase in accounts sent to collections due to higher premiums, deductibles, and out-of-pocket maximums.

These changes have put additional pressure on provider organizations to manage claims cycles, causing them to outsource more tasks to revenue cycle management vendors.

Staffing shortages at payer and provider organizations are also exacerbating revenue cycle challenges. Shortages at payer organizations impact their ability to assist providers with prior authorization changes and claims appeals, while shortages at provider organizations make it difficult to complete tasks.

Almost two-thirds of respondents said workforce challenges have influenced their choice to outsource revenue cycle services. Provider organizations are struggling with recruiting and retaining staff, leading to high turnover and employees with limited expertise. Leveraging outsourcing may be expensive, but it is more affordable than expenses related to recruitment, training, and employee benefits, respondents indicated.

When outsourcing revenue cycle management services, provider organizations are looking for vendors that are accessible, transparent, and accurate. Respondents also reported that a successful outsourcing relationship requires timeliness, expertise, collaboration, and follow-up.

Some respondents noted that their current outsourcing strategy lacks a partner who is invested in their success and requires additional feedback and guidance. Provider organizations also want education, best practices, and long-term strategies for improving their revenue cycle workflows, the report mentioned.

In addition, respondents want more reporting from vendors, including detailed information on claims collection attempts and numerical data supporting changes in claims revenue, to ensure return on investment (ROI).

Rather than outsourcing tasks to vendors that offshore services, provider organizations prefer support that is provided domestically. Nearly two-thirds of respondents said offshoring would impact their decision to go or stay with a firm. Similarly, 62 percent of respondents perceived offshoring as slightly or highly negative.

Offshoring concerns center around different operating hours, potential language barriers, and issues with understanding domestic payer processes. However, concerns like accuracy, communication, and expertise may also apply to domestic support.

Outsourcing revenue cycle management services has become more common among providers in recent years. An April 2023 study from CWH Advisors found that 61 percent of surveyed providers plan to outsource revenue cycle tasks in the next 24 months.