The three questions CFOs should ask their RCM partners

Revenue cycle management outsourcing is no longer just about cutting costs. For many hospital systems, outsourcing is about remaining competitive in the market. 

With pressure mounting to cut costs and improve finances, about 81 percent of hospital leaders have made outsourcing financial services a top priority. But cost-to-collect is not the only metric financial leaders should monitor in their revenue cycle service partnerships.

Tom Furr, CEO and founder of Durham, N.C.-based PatientPay, shared with Becker's Hospital Review critical questions he recommends CFOs ask revenue cycle service providers to ensure both return on investment and optimal financial efficiency.

1. How do hospital revenue cycle metrics compare to the industry benchmark? Tracking and comparing revenue cycle data to industry benchmarks helps hospitals understand how they stack up to their competition. This is the first question hospital CFOs should ask their affiliated financial service providers to evaluate their RCM's performance.

2. Is our revenue cycle service provider achieving at least a 50 percent collection rate for patient accounts? Consumer out-of-pocket expenses are projected to reach $608 billion by 2020, according to Kalorama Information. As patient financial responsibility grows, hospitals' patient collection rates will become increasingly important to ensure hospitals receive maximum reimbursement for services. "If the answer [to this question] is no .... then it is time to get those numbers and have [the service provider] focus on areas to accomplish the 50 percent goal," says Mr. Furr.

3. What are our patient collection rates, and how do we improve? Informed by their experiences in retail markets, consumers are demanding more choice and greater convenience from their healthcare interactions. "CFOs and their RCM groups have to look at patient collections with a new perspective, just like Elon Musk did with the automobile; don't just make it different, make it better," says Mr. Furr. This can include implementing an online payment portal, partnering with an interest-free loan program or reducing paper-based payment transactions in favor of digital methods.