Outsourcing accounts to agencies is a bittersweet endeavor for most providers. On one hand, outsourcing accounts that have not been resolved provides some needed cash. On the other hand, it can feel like a failure to the provider organization, leaving a lingering feeling of not having completed the job. Outsourcing relationships are further strained when an agency ‘skims the cream off the top’, leaving many remaining accounts unworked only to be returned without effort. (Which, as an aside, is unavoidable due the compensation agreement and cost structure of the agency.)
The typical paradigm of the provider- agency relationship is tied to the idea that the deliverable from the arrangement is incremental cash, and not much else. In our opinion this approach limits the value of outsourcing, strains relations, and does not deliver the best outcome for the provider organization.
In the traditional agency outsourcing arrangement, the agency works the accounts, which really entails addressing account errors and issues, and continues to meet the follow up requirements of the payer. This is done by providing transactional services, one account at a time. Little to no effort is spend on providing practical, actionable feedback to allow the provider organization to eliminate the root cause of unresolved accounts in the first place. For the agency, there is little incentive to provide this information, since any fixes the provider puts into place will reduce future revenues for the agency. In summary, a purely cash based relationship is set up to strain relations and perpetuate status quo process quality.
Having an outside entity work accounts should yield much more than pure cash. Working individual accounts provides source information to identify root causes that prevent payment prior to the placement time period- it is detailed detective work, at the ground level of the process, one claim at a time. In a partnership relationship, the agency aggregates this information, in conjunction with higher level analytics, and educates the provider organization on a regular basis. The information goes well beyond simply identifying issues. It outlines what process changes can be made in the provider’s process to prevent non-payment issues. A collaborative review process then prioritizes these efforts and over time, the provider’s process can significantly improve.
At a higher level, this approach strengthens business intelligence to identify priorities for revenue cycle re-engineering initiatives, and can be invaluable in preparation for EMR conversion initiatives. It provides data to focus on critical path processes, and offers an outside perspective at no extra cost the organization.
There are two keys to receiving the additional benefits of an outsourcing relationship. First, the mindset of both parties must be one of actual partnership and collaboration. If either organization is compelled not to disclose process failure information, the exchange will not take place. Secondly, both organizations need to expect improvement in the provider operations, valuing the engagement beyond pure cash.