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Article: Outsourcing coding boosts efficiency, bottom line

Posted by Michael DiMarco on Jan 29, 2018 11:44:52 AM

team-DiMarcoM.jpgHealthcare organizations of all sizes have long outsourced various functions within their revenue cycle to specialists capable of boosting efficiencies across their operation. Historically, functions that require scale and technology to make them more efficient and effective have been the domain of outsource vendors (e.g., medical advocacy, transcription, and bad-debt collections). However, other areas of the revenue cycle, specifically coding, have a much lower adoption rate. Coding can benefit from scale, technology, and analytics just as much as back-office and patient access functions.

We are seeing a paradigm shift emerge as more hospitals and practices integrate outsourcing of their core middle revenue cycle procedures. They see the value of focusing on how these functions can impact revenue and compliance in a meaningful way versus simply being viewed as a cost needed to generate revenue.

Dismantling the myths

In the face of healthcare complexities and the rollout of value-based care, revenue cycle executives may realize the benefits of partnering with an experienced, scalable, and full-service outsourcing provider.

This emerging trend toward collaborative outsourcing is driving a real sense of trust and value among providers who are focused on driving costs out of their systems. More providers are discovering firsthand that an effective outsourcing partnership does not only drive down costs, but can also drive improvement in revenue.

Working with clients, we have been able to quantify the inefficiencies and hidden costs of not using outsourced coding in a smart, strategic manner. For instance, patient volumes, thus chart volume, fluctuate frequently. If a provider staffs to their peak volume, their utilization will be low, driving up cost. If they staff to the average, the staff will either be underutilized at times or scrambling to catch up when volumes spike. Providers can maintain a staff of fully utilized employee coders while scaling with an outsource provider for quick adjustments due to increases in volume.

The best coders are constantly trained, and their performance constantly assessed, utilizing proprietary analytics tools and insight to optimize productivity and accuracy throughout the middle of the revenue cycle.

The end result is a value proposition that enables providers to focus on improving revenue. Based on findings from coding and audits, we are able to identify areas of improvement within clinical documentation. This is a very different approach compared with simply providing temporary staff. We gain significant insight into documentation gaps, which forms the basis for clinician education. When physicians and nurses know how to document properly for both compliance and reimbursement, then revenue will be captured properly.

Our recommendation is to staff to 70-80% of their peak and utilize a partner to flex resources up and down based on their ever-changing needs. This commitment enables an organization to fully invest in managing these resources to ensure they are meeting the client’s needs while giving them better unit economics, better quality results, and the ability to retain control of their revenue cycle.

In cases where a managed outsource coding solution that features resource oversight and quality assurance testing is provided, quality scores among coders improved dramatically by an average of 300 basis points. That bump in quality will drive revenue integrity and greatly reduce claim denials and compliance issues.

As EMR’s proliferated, coders moved outside of the four walls of the facility. This has impacted the local labor market as coders can be hired by outsource firms with a national client base. This has made it more challenging for an individual hospital to compete with the flexibility and career advancement offered by large outsourced vendors, further exacerbating the local labor market shortage. A good partner can solve this issue.

New era of rev cycle outsourcing

With healthcare complexities and cost pressures rising, and fee-based service transitioning into value-based care, hospitals and practices of all sizes are committed to finding ways to elevate efficiencies across their operations and bring more revenue in the door.

Whether a hospital needs to fill gaps or completely reinvent their revenue cycle procedures, more healthcare providers are implementing strategic outsourcing partnerships to realize the full potential of their organization’s financial health and success.

Michael DiMarco has been the Chief Executive Officer of himagine solutions since its formation in August 2014. Michael has received the Ernst & Young Entrepreneur of the Year Award in Healthcare Services. He earned a Bachelor of Science degree in Business Administration from Ramapo College of New Jersey, a Master's in Public Administration from Rutgers University, and a doctoral degree ABD in Management from Webster University.

Topics: Outsourcing