10 Tips That Every Healthcare Finance Executive Should Know Before Hiring a Revenue Cycle Firm
By Ben Tobin
Engagement Manager
Beacon Partners, Inc.

Healthcare organizations are experiencing greater constriction of reimbursement due to a myriad of issues that include increased government regulations, payor contract demands, and consumer directed health plans. In addition to these weighty issues, healthcare organizations have had to meet the demand for expenditures for new technology to automate systems in order to effectively address this constant change within the industry.

The convergence of constricted reimbursement and the outlay of dollars for technology are impacting the two most important goals of a healthcare organization’s mission – caring for the patient, and securing payment for services performed. Both are reliant on the other, and neither can exist without the other.

With the steady investment increase for systems with more features and greater capabilities, healthcare organizations have been expecting an associated increase in reimbursement. In many cases this has not happened because revenue cycle processes have not been examined and redesigned to work efficiently with these systems, improve customer service, and gain control of all revenue cycle processes.

It is often necessary to assess your cycle’s operations with new and independent eyes. It is very difficult for an organization to internally assess their operations with an unbiased view. Selecting the right set of eyes can and determining the most important aspects to review can be very difficult.

Below are 10 tips to utilize when searching for and hiring a Revenue Cycle Firm to assist your organization in examining the many operational functions that make up the revenue cycle process. From initial patient contact with the organization through the collection of dollars for the services performed, each step along the cycle has to contribute to the efficient collection of these dollars.

An outside Revenue Cycle Firm can greatly enhance your understanding of how your organization currently functions. But, it is important for the firm to outline the opportunities that exist and develop a roadmap that can be followed to take advantage of these opportunities. While some of the tips may seem very basic, they have been developed based on many years of experience and will assist with hiring the right firm for your organization, and contribute to the success of your project.

10 Tips for the Search and Selection of a Revenue Cycle Firm:

1. Clearly understand and be able to delineate why there is a need for engaging an outside firm
   • Be candid in your conversations with the firm.
   • Outline the issues as you as you have identified them.
   • Explain how the issues have impacted your organization.
   • Outline what you already know, and also what you need to know.
   • Explain what payor claim denials are being received and in what volume.
     
     
2. Once you have determined that there is a need don’t delay engaging a firm. Reimbursement issues have most likely occurred over time, and will only be exacerbated by further delays.
   
   
3. Outline your expectations of the firm – what are the deliverables? Ensure that the firm understands and agrees to these expectations. Recommended deliverables should include:
   • Assessment with recommendations.
   • Assessment and implementation of agreed upon recommendations.
   • Project management.
   • Interim management.
   • Performance analysis.
     
     
4. What is the firm’s history with this type of engagement?
   • Do they have experience with your practice size and specialty(s)?
   • What results have been realized by the firm’s involvement with previous clients?
   • What reports, status updates will you receive? Scheduled reports are necessary, but if a problem is recognized that is hindering patient care, is non-compliant with federal regulations, or can be corrected to ensure an immediate input of cash, it’s vital that the firm communicate these on a timely basis.
     
     
5. Understand the firm’s fee structure
   • Hourly rates
   • Expense types
   • Budget limits
   • Risk sharing – If a risk sharing arrangement is agreed to, the firm may require that all recommendations are implemented and adhered to, and they are able to monitor compliance and performance.
     
     
6. Be sure you feel comfortable with the consultants assigned
   • Review their individual experience.
   • How many consultants will be assigned and when?
   • What will be the role of the consultants?
   • Who will manage the consultants, internally and on-site?
     
     
7. Share with the firm your current financials and revenue cycle performance reports.
   • Have the information ready – the work effort by the firm will be more focused and efficient when the consultant has quality background information.
   • Review and understand what information you are giving the firm. Understand the sources of the reports. Have the staff responsible for gathering the information be accessible to assist in interpreting the reports available to the consultants.
     
     
8. Make sure that the appropriate people in your organization are informed that a Revenue Cycle firm is being engaged and the reasons for the engagement.
   • Cooperation from all sources of the revenue cycle is vital.
   • Proper communication in the organization will alleviate unnecessary anxiety and enhance collaboration.
     
     
9. Be sure to examine and assess all elements of the revenue cycle and work-flows
   • Registration
   • Coding
   • Billing
   • Claim submission
   • Edit resolution
   • Accounts receivable follow-up
   • Health Information Management
   • IT support
   • Network design
   • Practice management system
   • Reporting
     
     
10. Your ultimate goal of hiring a Revenue Cycle firm is to ensure they assist you in identifying revenue enhancement opportunities.
    • What does your organization need to do to take advantage of these opportunities?
    • What are the next steps for your organization?
    • Who is responsible for carrying out the plan?
    • What is the project timeframe?

Because of the dynamic nature of the revenue cycle due to the large number of interactions, processes, staff, and system needs, it is easy to lose the perspective of the cycle as a whole. It is necessary, and healthy, to reexamine the cycle to ensure that your organization’s people, processes and technology all properly intersect for optimal results. A quality revenue cycle firm can assist with a thorough assessment, a roadmap for improvement, and more importantly tools you and your organization can use to control your revenue cycle and meet the challenges that the industry is, and will continue to be, faced with.

About the Author
Ben Tobin is an engagement manager at healthcare management consulting company Beacon Partners, and can be reached by email.