A 5-step process for consolidating revenue cycle vendors and the tremendous benefits that can be realized

Many health systems have 10 or more vendors throughout the pre-service, post-service, and post-adjudication phases of the revenue cycle. Having multiple vendors can add complexity, confusion, and cost.

In a February webinar hosted by Becker's Hospital Review and sponsored by Availity, Linda Perryclear and Krisi Hutson, both product line directors with Availity, highlighted valuable reasons to consolidate vendors. In the discussion, they provided a five-step process for consolidation and shared the results from three customer case studies.

Key insights:                             

1. Eliminate the confusion caused by multiple vendors managing different aspects of the revenue cycle. “In the pre-service, post-service, and post-adjudication areas, you may have many vendors working in each area or even across the entire revenue cycle continuum,” said Ms. Perryclear. “If an issue arises, there can be confusion as to which vendor is causing it and where exactly the data came from. Questions can arise around which vendor is even the right source to report the issue.”

2. Availity has developed the following five-step process for vendor consolidation.

    • Outline and Identify. Outline the specific problem to be solved, which is often related to eligibility, and identify the opportunity.
    • Make a plan. Determine what needs to be changed and what processes can be streamlined. Assess the impact on your budget by inventorying your current vendor contracts and determine how you can leverage existing relationships to consolidate your solutions.
    • Implement. Take a phased approach, have realistic expectations, clearly define your success criteria, and allocate appropriate resources.
    • Measure. Define the key performance indicators to measure success, which are discussed more below.
    • Engage in continuous improvement. Adjust as you go. Consolidating vendors is an ongoing process.

According to Ms. Hutson, making the plan is often the biggest hurdle. "It's important to evaluate your landscape and work with your legal and finance departments to understand how many different vendors exist, what contracts look like, and what part each vendor plays in your system." Ms. Perryclear suggested looking at what needs to be changed, which vendors you're unhappy with, and where overlaps may already exist.

3. Study how long it takes administrative staff to complete activities to establish baseline measurements and to understand current costs. Healthcare organizations must evaluate how long it takes staff to complete tasks such as working an upfront edit, addressing a denial, managing a vendor contract, completing an annual security review, or managing a support issue. Ms. Perryclear walked through a hypothetical calculation using conservative assumptions that showed consolidating from three vendors to one vendor could result in a savings opportunity of $3,736 for just one provider. 

4. Healthcare organizations have experienced significant benefits with Availity Essentials Pro. Ms. Hutson and Ms. Perryclear shared three customer case studies involving large, prominent health systems.

    • One large health system built a process to automate eligibility verification for manual entry payers, resulting in a reduction of operating costs by $2.3 million and staff time by 25 percent. Make a plan. Determine what needs to be changed and what processes can be streamlined. Assess the impact on your budget by inventorying your current vendor contracts and determine how you can leverage existing relationships to consolidate your solutions.
    • One health system reduced its claim error rate from 4.8 percent to only 0.7 percent, and its paper claims were reduced by 60 percent, saving printing costs and reducing days in accounts receivable.
    • One organization worked with Availity and Epic teams to dive into secondary claim volumes, segment the highest-volume payers and automate the top processes. This effort resulted in an 80 percent decrease in paper claim volume in-house, a 75 percent reduction in staff time, and faster reimbursement .

By consolidating and streamlining revenue cycle vendors, healthcare organizations can significantly improve revenue cycle performance, resulting in lower costs, reduced staff work, and higher patient satisfaction.

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