Demand for RCM outsourcing on the rise, according to physician survey

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Physicians are increasingly eyeing outsourced revenue cycle management services as they look to align clinical and financial outcomes, according to Black Book's 2016 RCM survey.

Survey findings from 2,000 independent physician practices and 200 hospital-based physician practices showed traditional patient billing solutions continue to negatively impact profit margins, prompting 59 percent of medical providers and 86 percent of hospitals to make efforts to get rid of inefficient billing methods by the third quarter of 2017, according to a news release. 

According to Black Book, the U.S. market for physician and ambulatory revenue cycle management outsourcing and extended business office services are expected to increase by 42 percent from the fourth quarter of 2016 to the first quarter of 2019. Specifically, Black Book said, it is anticipated that the outsourcing of comprehensive medical business office services will grow by 30 percent among practices of less than 25 physicians in 2017.

This projected growth comes as healthcare navigates the shift from fee-for-service to value-based care. According to Black Book, 90 percent of small, independent practices remain unprepared financially and technologically for the challenges of implementing value-based care.

"Rising healthcare expenditures and the complex technology or staffing requirements to succeed under value-based care is creating the urgent demand for cost-effective, technically advanced business office outsourcing solutions in physician practices across the country," Doug Brown, managing partner of Black Book, said in a statement.

Black Book said nearly 88 percent of groups of 100 or more practitioners are implementing partial to full managed business office services providing outsourced front, mid-process and back end related services to large clinic, multi-specialty groups, and complex physician organization market.

But cost is not the only factor driving more physicians to outsource RCM services. According to Black Book, physicians, practice administrators and corporate financial leaders identified various other factors that prompted their organization to consider outsourcing their billing, as noted by 1,355 independent practice representatives and 406 hospital based physician group staffers who participated in the survey. Here are the survey findings, as stated by Black Book:

  • Ninety-six percent of practice leaders report inefficient billing processes.
  • Ninety-seven percent of independent group and solo practices experience high business staff turnover.
  • Eighty-three percent of hospital-based physicians also report trouble recruiting business office candidates experienced in ICD-10, value-based Care, risk contracting and the Medicare Access and CHIP Reauthorization Act.
  • Ninety-five percent of practices with less than five physicians self-identify as "not tech savvy." 
  • All of the 224 participating "new" physicians seek outside alternatives to office financial and staff management as they launch their new practices.
  • Seventy-seven percent of physicians believe they need to find more direct patient care time currently taken up by business office-related issues.  

 

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