Outsourcing of complex claims is a trend set to expand, Black Book survey finds

Anticipating lower reimbursement and shrinking inpatient margins next year, hospitals are exploring ways to capture more revenue. This has led an increasing number of hospitals across the nation to outsource complex claims to third-party vendors, according to a recent Black Book survey.

The survey, which includes responses from 1,309 hospital CFOs and business office leaders, revealed 39.8 percent of U.S. hospitals outsourced complex claims to a specialized vendor in the third quarter of 2016. That's up from 20.4 percent of hospitals in 2013. 

Hospital billing and collections staff typically does not have experience handling complex claims such as workers' compensation, injury and general liability cases. This causes many complex claims to be written off. "In fact, when compared to traditional claims, complex claims were written off at a significantly higher rate last year," said Doug Brown, managing partner at Black Book.  

Many hospitals hope outsourcing will reduce those write-offs and give their organizations a financial boost. According to the Black Book survey, 49 percent of hospital CFOs said outsourcing, including offshoring, is becoming a more viable alternative in 2017 for more parts of their organizational claim processing.

Black Book projects the market for outsourced revenue cycle management will grow at a compound annual growth rate of 26.5 percent over the next two years, with the market reaching a value of $9.7 billion by 2018.

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