4 Key Signs It’s Time to Outsource Your RCM

Billing & Reimbursement Certified Professional Coder Revenue Cycle Management

ID-10052928 Like many other physician practices, you may be undecided whether or not to outsource your billing and Revenue Cycle Management (RCM) functions.  You may have already outsourced payroll and transcription, but when it comes to billing, you might think twice and say, “Won’t that be a mistake?”

You may rethink the idea because you feel the costs would be too much and you might be losing control of this very important aspect of your business. 

It’s a big decision and one that you should not make hastily or without due consideration.  There is an uncertainty that comes with entrusting your cash flow to someone else and also paying them to do it.

What some people fail to appreciate is that RCM isn’t just about getting the bill out of the door.  In fact, billing is just one of the many tasks you need to accomplish before being paid.  You’ll need to confirm eligibility and coverage, assure accurate and optimum coding, provide proper charge posting and timely claims submissions, manage and trend denials, etc. to ensure payment for your services.

Here are four key signs that it might time to consider outsourcing the revenue cycle management functions of your practice: 

  • Billing costs are too high

Many people assume that it is more expensive to outsource the RCM functions than it is to keep them in-house. Such is not always the case.  When looking at the in-house RCM costs, the first thing you should consider are the actual payroll costs.  You might be surprised to see that the payroll taxes and employee benefits account for about 30% of the payroll cost.  The other thing to consider is the non-productive time for breaks and casual inefficiencies.  Another often-neglected consideration is the real estate costs associated with an in-house billing staff, real estate is often the most expensive part of your practice overhead.  This space is being under-utilized in order to chase down dollars already earned rather than increase revenue and probability of the practice.  Moreover, the opportunity cost of employing an in-house billing staff when that real estate could be used for revenue generating activities such as adding additional providers or ancillary services can be extraordinarily high and disproportionate to the value of the in-house staff.

  • When the staff turnover is high

Staff turnover is a challenge in every industry and revenue cycle management companies are not immune to this, but in a medical practice with an in-house billing staff, it’s even more crucial and at times, debilitating.  The practice typically relies heavily on their staff to wear many hats and perform various roles and functions.  When a staff member is absent or leaves, it can cause systemic back-ups to your revenue cycle and decrease in overall cash flow.  Replacing staff, besides slowing down the overall operations, can be costly and potentially financially disastrous.

  • Preparing for ICD-10

The ICD-10 coding system is scheduled to be implemented on Oct. 1, 2015.  This will completely change the way diagnoses and procedures are coded, and will impact how providers will be reimbursed.  It is not sufficient that your in-house coder(s) be familiar with ICD-10, they need to be totally immersed in, and have an expert understanding of the new code set.  Furthermore, they should be a Certified Professional Coder (CPC) and will need to be certified in ICD-10 as well or they will lose their CPC certification.

  • Lack of denial management process

The Medical Group Management Association (MGMA) says that your practice isn’t healthy if you’re receiving more than 4% denials.  Often practices do not have either the resources or the infrastructure in place to implement sufficient denial management policies and procedures to monitor, measure and trend by denial type and payor.  Without proper denial management protocols in place, your practice will not be able to identify issues systemic or acute and effect corrective action to effectively adjudicate them and avoid them altogether.

With the right revenue cycle management firm that already has this in place and makes this a point of emphasis, you no longer have to worry about whether or not denials are being managed properly and if your staff is writing off revenue that should be collected.


When finding an RCM partner, find one that promises to look after your money like it were their own.  Find an experienced provider that will add value to your practice, one that looks to create a partnership for future growth rather than simply a client/vendor relationship. 

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