The Importance of Partnership in the Ambulatory RCM Services Market
It is harder than ever for ambulatory healthcare organizations to get paid for the care they provide. Revenue cycle management (RCM) services firms can help organizations fill resource gaps and build processes that optimize reimbursement levels. But because hiring a firm requires a large investment, organizations have a lot of questions about these firms, including the types of engagements they do for different organizations and how well they perform.
KLAS recently published our 2024 Ambulatory RCM Services report. In it, we look at some of the firms being used in this market, the type of work they do, and the client experience.
Organizations’ Challenges & Strategies in the RCM Services Market
There is renewed energy around ambulatory RCM services, and many organizations are relying on outside firms more than they did in the past. This energy stems from organizational challenges in recruiting and retaining staff, combined with looming financial pressures.
The revenue cycle inherently presents complex challenges, so finding qualified people to manage billing work is difficult even without staffing shortages. Often, organizations aren’t operating as efficiently as they could or need to be on their own. Additionally, government-provided funds that were distributed during the pandemic are drying up. Organizations need to optimize reimbursements for the work they are doing, and RCM services firms can provide access to cheaper labor—often via offshoring—to help organizations get paid more quickly.
But there is more to using a services firm than simply offloading work to them; increasingly, organizations are expecting their firm to provide strategic guidance as well so they can reform their operations model. In the Ambulatory RCM Services report, this strategic guidance is one aspect that sets some firms apart. (KLAS will continue asking clients about this to identify any future trends in firm performance and client expectations.)
A Few Trends in Overall Firm Performance
Regarding overall firm performance in this report, a few trends emerged that were particularly interesting. First, the firms’ overall performance scores cover a wide range (there are about 34 points between the highest- and lowest-scoring firms). The higher-scoring firms have generally seen their scores improve since 2021 while the lower-scoring firms have seen their scores decrease. Regardless of the firm they use, all survey respondents said communication and their contact person are top contributing factors to a valuable engagement.
Second, we learned that the number of projects a firm can do for clients doesn’t strongly correlate with client satisfaction. Instead, client satisfaction is largely driven by firm communication and personal touch.
The Evolving Landscape of OffshoringÂ
Outsourcing RCM work is likely to become more common as healthcare organizations seek to fill resource and expertise gaps, and the cost savings of using offshore resources will likely lead RCM firms to further increases of this type of work.
There is generally a negative sentiment around offshoring, but KLAS’ research shows that those who feel more negatively often have not used offshoring before, while organizations with offshoring experience tend to report more positive feelings. Still, vendors in other markets—outside of ambulatory RCM services—believe that their customers’ perception of them has started declining ever since they moved to using offshore resources.
Ultimately, a company’s success with offshore resources comes down to communication and client expectations in terms of the engagement and the value they will receive. In the Ambulatory RCM Services report, some firms are seeing success from assigning each client a consistent, effective account manager who can help bridge the gap between the client and the offshore resources.
Useful Data for Future Clients
As ambulatory organizations continue to grapple with their billing practices, they will need firms with highly specialized expertise. The Ambulatory RCM Services report attempts to shed some light on what different firms can do and how well they can serve client organizations. We hope the lessons that other organizations have learned will help future clients mitigate challenges up front.
KLAS will strive to continue to uncover meaningful insights and trends as we do more research in this market. For example, we want to look more granularly at how different firms serve different types of organizations (e.g., those who bill for specialty facilities), and we also want to identify firm-differentiating insights around offshoring. Be on the lookout for these and other insights in future reports.
For further details, check out the report on our website.
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