With healthcare spending projected to rise to $6 trillion in the coming years, there's a growing demand for revenue cycle specialists (RCSs) to help organizations achieve their financial objectives. But with limited budgets and resources, many organizations face the challenging decision of hiring an in-house specialist or outsourcing the task.
About 80% of hospitals are vetting full revenue cycle management outsourcing, which indicates that more organizations are looking to change how they manage their revenue cycle management functions. Furthermore, as more regulated laws come into effect regarding health funding politics and policies, these numbers are expected to rise as outsourcing can provide cost-effective solutions that are compliant with all regulations.
Despite this clear trend toward outsourcing, there are still many advantages of employing an in-house RCS — namely, enhanced communication and collaboration between departments within the organization. As such, it may be wise to explore both options and decide which solution could provide greater value for your organization's current needs and goals. This guide will review all the factors you must consider to determine the most appropriate solution for your organization.
What Are the Duties of a Revenue Cycle Specialist?
Revenue cycle management (RCM) is a critical function in healthcare organizations that ensures patients' bills are paid correctly and on time. Revenue cycle specialists help manage the entire billing process, from the initial encounter with the patient to the final payment. They're responsible for a wide range of duties, from front-end to back-end RCM.
The front-end RCM refers to the process of capturing patient demographic and insurance information and verifying insurance eligibility before the patient receives care. This process is critical to ensuring that claims are submitted correctly the first time, which leads to faster payments and a more efficient revenue cycle. Revenue cycle specialists in front-end RCM perform the following duties.
Revenue cycle specialists in front-end RCM are responsible for accurately collecting and inputting patient demographic information into the billing system. They must ensure the data is entered correctly, including the patient's name, address, date of birth, and contact information. Any errors or omissions can result in delayed or denied claims, which can impact the organization's financial performance.
Revenue cycle specialists verify the patient's insurance coverage and eligibility. They must confirm the patient's insurance plan, network, coverage levels, and any deductibles, co-pays, or coinsurance amounts. This information is critical for accurate billing and reimbursement.
Revenue cycle specialists collect co-payments from patients at the time of service. They must accurately determine the amount owed and collect it before the patient leaves the office or clinic. Co-pays are a critical source of revenue for healthcare organizations and can impact the organization's financial performance.
Some insurance plans require pre-authorization for certain procedures or treatments. Revenue cycle specialists are responsible for obtaining pre-authorization from the insurance company before providing the service. This requires knowledge of the payer's guidelines and a thorough understanding of the medical procedure or treatment.
Revenue cycle specialists coordinate referrals from the patient's primary care physician. This requires communication with both the physician and the patient to ensure the referral is obtained and processed correctly. Referral coordination is critical for accurate billing and reimbursement.
The back-end RCM refers to the process of submitting claims and following up with payers to ensure timely reimbursement. This process is often the most challenging part of the revenue cycle. Revenue cycle specialists in back-end RCM perform the following duties.
Revenue cycle specialists are responsible for submitting claims to payers. They must ensure that the claim is accurate and complete, including the patient's demographic and insurance information, the diagnosis and procedure codes, and the charges for the service. Claims can be submitted electronically or on paper, depending on the payer's requirements.
Claim denials can occur for various reasons, including errors in coding, missing information, or incorrect billing. Revenue cycle specialists in back-end RCM are responsible for identifying and resolving claim denials. This requires investigating the root cause of the denial and taking appropriate action to resubmit the claim.
Revenue cycle specialists must apply insurance payments to the appropriate accounts. They must ensure the payment is posted correctly and adjustments or write-offs are made as needed.
Accounts receivable management
Revenue cycle specialists in back-end RCM are responsible for managing accounts receivable. This includes monitoring outstanding claims or overdue payments, following up with payers, and resolving outstanding balances appropriately.
Revenue cycle specialists often generate reports to monitor key performance indicators (KPIs). These may include claim submission rates, denial rates, days in accounts receivable, and net collections. KPIs can help identify areas for improvement and guide decision-making to improve the organization's financial performance.
Why Would You Need A Revenue Cycle Specialist?
Healthcare organizations rely on revenue cycle specialists to ensure their financial health. Here are some reasons a healthcare organization might need a revenue cycle specialist.
Growing practice requires more staff
According to the Bureau of Labor Statistics, employment of medical records and health information technicians, which includes revenue cycle specialists, is projected to grow 9% from 2020 to 2030, much faster than the average for all occupations.
As practices grow, they require more staff to ensure accounts receivable processes run smoothly and efficiently, so these services are in high demand. If you don't have enough staff or staff with the right skill set, it can cause a backlog in your processes and lead to delays in payment processes.
A revenue cycle specialist can provide the extra help needed to manage the influx of new patients and improve existing processes.
More denied claims from payers
Insurance companies can deny claims for various reasons, such as coding errors, missing information, or incorrect billing. According to research, the average denial rate for medical practices is between 5% and 10%. Revenue cycle specialists can help identify the root cause of claim denials and take appropriate action to resubmit the claim.
Insurance companies may underpay claims, resulting in lost revenue for healthcare organizations. A revenue cycle specialist can help identify potential underpayment issues before they occur.
By thoroughly reviewing claims before submitting them for payment, they can spot discrepancies or errors that may lead to underpayment or even a denial. This will save time and money in the long run as you won't have to chase down underpayments from payers or appeal denied claims due to errors on their part.
Compliance with price transparency regulations
In January 2021, the Centers for Medicare and Medicaid Services implemented new price transparency regulations that require hospitals to provide patients with price information for common services. Failure to comply with these regulations can result in penalties and fines.
A revenue cycle specialist can help ensure that practices remain compliant with these requirements while also helping them maximize their reimbursement rates according to each patient's insurance coverage before providing services or treatments.
The Benefits of Investing in Revenue Cycle Specialists
Managing your revenue cycle is no small task. It requires staff members to have a deep understanding of the ever-changing regulations, billing processes, and reimbursement models for both government and private payers. Whether you choose to manage the process internally with in-house specialists or outsource to a professional RCM service, there are several benefits to investing in revenue cycle specialists. These experts are well-versed in the latest industry trends, regulations, and technology, ensuring that your revenue cycle process remains efficient and compliant. Let's take a closer look at these benefits.
Improved first-pass clean claim rate
A first-pass clean claim is a claim that's accepted and paid for by the insurance company on the first submission. A high first-pass clean claim rate is essential to avoid claim denials and delays, which can affect cash flow and increase administrative costs. Revenue cycle specialists have the expertise and technology to ensure that claims are coded accurately, submitted on time, and have all the necessary documentation to increase the likelihood of first-pass clean claim acceptance. They can utilize automated claims scrubbing tools to identify errors and inconsistencies in claims before submission, provide ongoing training and support to billing staff, and develop customized workflows and processes tailored to the organization's specific needs.
Decreased days in accounts receivable and better cash flow
Accounts receivable (AR) refers to the money owed to a healthcare organization by patients and insurance companies for services rendered. The longer it takes to collect AR, the more it affects cash flow and the organization's financial health. Revenue cycle specialists can help decrease the days in AR by following up on outstanding claims, appealing denials, and providing patients with easy-to-understand statements and payment options. They can use technology tools such as automated reminder systems and predictive analytics to identify high-risk claims and prioritize follow-up efforts. Revenue cycle specialists also provide patients with clear and concise statements that include all relevant information, such as payment due dates, insurance coverage, and out-of-pocket costs.
Increased net cash collections
Net cash collections refer to the amount of money a healthcare organization receives after deducting contractual adjustments, bad debts, and other expenses. Revenue cycle specialists can help increase net cash collections by negotiating with insurance companies to ensure proper reimbursement and reducing bad debt write-offs through effective patient collections. These specialists often use predictive analytics and segmentation techniques to develop targeted patient collection strategies customized to each patient's financial situation. They are also helpful in identifying and resolving revenue leakage with regular audits and reviews of claims and reimbursement data to identify and address any discrepancies or underpayments.
Enhanced patient financial experience
Patients' financial experience is critical to their overall satisfaction with a healthcare organization. However, research shows that financial responsibility frustrates a staggering 70% of patients. Professional RCM specialists can help enhance the patient's financial experience by providing clear and accurate cost estimates, convenient payment options such as online bill pay and payment plans, and financial counseling to patients who need it. They also have access to price transparency tools that provide real-time cost estimates based on the patient's insurance coverage and deductible status.
The Pros and Cons of Hiring an In-house Revenue Cycle Specialist
For healthcare organizations, having a reliable revenue cycle specialist is essential. But is it better to hire in-house or outsource? Here's a look at the benefits and drawbacks of hiring an in-house revenue cycle specialist.
A dedicated in-house revenue cycle specialist can provide many advantages to your practice. Here are some of the pros.
One of the primary benefits of hiring an in-house revenue cycle specialist is more control over the entire RCM process. The in-house specialist can work closely with other departments to ensure a smooth and efficient revenue cycle. This allows for better communication and collaboration, which can increase revenue and reduce errors.
Greater knowledge of the organization
An in-house revenue cycle specialist will better understand the organization's culture, goals, and values. This can help them create personalized and effective revenue cycle management strategies. They can also identify and address issues unique to the organization, such as specific billing requirements or local payer policies.
Having an in-house specialist allows you direct access to them whenever needed, eliminating delays due to communication issues or misunderstandings between departments or companies.
Recruitment and training costs
Hiring an in-house revenue cycle specialist can be a costly and time-consuming process. Recruiting and training new staff members require significant resources, including staff time and financial investment. Additionally, there's always the possibility of turnover, resulting in lost productivity and increased costs.
An in-house revenue cycle specialist may not have access to the same resources as an outsourced provider. This can include technology, specialized training, and industry expertise. In-house staff may also struggle to keep up with payer policies and regulations changes, which can impact the revenue cycle process.
Risk of burnout
Revenue cycle management can be a stressful and demanding job. In-house staff may become overwhelmed with the volume of work or struggle to meet performance goals. This can lead to burnout, decreased productivity, and increased turnover.
Pros and Cons of Outsourcing Revenue Cycle Management
There're many factors to consider when deciding to outsource RCM. Let's explore the pros and cons of outsourcing RCM so that you can determine what is best for your organization.
Access to industry expertise and tech
Outsourcing revenue cycle management can provide access to specialized knowledge and expertise. Third-party providers have experience working with various healthcare organizations and can offer insights into best practices and industry trends. This can help improve claim submission rates and reduce denial rates. You also gain access to the latest billing and coding technology without a large upfront investment.
Increased focus on patient care
Outsourcing RCM frees up time and resources that can be better spent on providing quality patient care to improve patient satisfaction scores and increase revenue.
An external revenue cycle team can leverage its specialized expertise, technology, and experience to help mitigate various fraud issues, such as identity theft, billing schemes, and embezzlement. They often have access to advanced data analytics tools and can analyze large volumes of transactional data more efficiently to identify potentially fraudulent activities. Additionally, external teams are more likely to have a broader range of experience across multiple industries and regulatory environments, allowing them to bring a more nuanced approach to addressing compliance and fraud risks.
Outsourcing revenue cycle management allows organizations to scale their resources as needed. This can be particularly beneficial for organizations experiencing growth or changes in payer policies and regulations. Outsourced providers can quickly adapt to these changes, minimizing the impact on revenue.
Reduced staffing costs
Outsourcing revenue cycle management can be a more cost-effective option for organizations with limited resources. Third-party providers have the infrastructure and resources to efficiently manage the revenue cycle process, reducing the need for additional staffing.
Outsourcing revenue cycle management can result in less control over the process. Organizations may have limited visibility into the billing process or be unable to customize processes to meet specific needs.
Potential communication issues
Outsourcing revenue cycle management can result in communication issues between the chosen company and the healthcare organization. This can be particularly challenging if the provider is located in a different time zone or if there's a language barrier.
It's important to consider how well your organization's values match those of potential partners before signing any agreements. Misalignment between your core values and those of the potential partner could lead to issues down the line. Healthcare organizations must ensure the external team understands and adheres to their policies, procedures, and values.
Data security concerns
Outsourcing RCM functions gives the company you hire access to sensitive data such as patient information and billing records. Any third-party provider must have proper data security protocols and adhere to industry standards for protecting private information. Given that 30% of all major data breaches happen in hospitals, you must do your due diligence when selecting an RCM provider and ensure that they have adequate measures to protect confidential data.
Lack of flexibility
When you outsource your revenue cycle management, you're essentially handing over control of that process to another company. This means that any changes or updates must be discussed and agreed upon by both parties before implementation — which can be time-consuming and inefficient if they disagree. Some outsourced vendors may not be willing or able to tailor their services to meet your specific needs. This could limit your ability to get the most out of your investment.
In some cases, the costs associated with outsourcing RCM can be higher than expected. Hidden costs include training, monthly maintenance, set up expenses, and termination fees. Doing your research upfront is important to know what you're getting into before signing any contracts. Most outsourced vendors also require long-term contracts, which could tie up your capital and make it difficult to end the relationship if it's not working out.
Why You Should Choose Hire Revenue Cycle Specialists Instead of Outsourcing
Hiring revenue cycle specialists offers several advantages over outsourcing. They can provide dedicated attention to your organization's revenue cycle needs and work closely with your internal teams to develop tailored solutions. They can also develop a deeper understanding of your organization's culture and processes, leading to better collaboration and communication. With in-house specialists, you'll have greater control over the quality of work and can ensure the team is fully aligned with your organization's goals and values.
In-house teams may also be a more cost-effective solution in the long run, as outsourcing may involve additional fees and may not offer the same level of customization and flexibility.
Typical salary for revenue cycle specialists
As of Jan. 26, 2023, the standard salary of a revenue cycle specialist sits at $53,012 but can vary between $46,499 and $60,986 depending on experience and other factors.
How To Hire Revenue Cycle Management Specialists
Qualifications and experience in revenue cycle management can make all the difference in optimizing your healthcare organization's financial performance. When reviewing candidates, look for those that know the full range of RCM activities, from insurance claim submission to patient collections.
Additionally, familiarity with billing technology and software, an understanding of HIPAA compliance regulations, and experience resolving coding issues are invaluable attributes for RCM specialists. Employers should look for individuals with excellent customer service skills who can proactively identify areas for improvement in the revenue cycle process.
Applicants should also show flexibility, enthusiasm for your practice or organization, and the desire to fit into your company culture. A specialist who ticks these boxes will help ensure your organization remains successful.
Healthcare revenue cycle specialist job description example
When hiring a medical revenue cycle specialist, it's important to find a candidate with the right combination of analytical skills, healthcare knowledge, and communication abilities. This job description example can help you identify the key responsibilities, qualifications, and attributes to look for in a successful medical revenue cycle specialist.
Job Title: Revenue Cycle Specialist
Job Summary: The Revenue Cycle Specialist is responsible for managing the financial transactions between healthcare providers and insurance companies. This position requires a strong knowledge of healthcare billing and coding practices and expertise in accounts receivable management.
- Work with healthcare providers to ensure accurate billing and coding practices
- Review and analyze claims to ensure compliance with insurance regulations and policies
- Submit claims to insurance companies on time
- Follow up on outstanding claims to ensure timely payment
- Communicate with insurance companies and healthcare providers to resolve claim issues
- Monitor accounts receivable aging and identify delinquent accounts
- Develop and implement strategies to improve revenue cycle performance
- Ensure compliance with all relevant laws and regulations
- Provide training and support to healthcare providers on billing and coding practices
- Bachelor's degree in healthcare administration, business administration, or a related field
- At least two years of experience in medical billing and coding or revenue cycle management
- Strong knowledge of healthcare billing and coding practices
- Familiarity with insurance regulations and policies
- Ability to analyze data and identify trends
- Excellent communication and interpersonal skills
- Strong organizational and time management skills
- Ability to work independently and as part of a team
- Proficiency in Microsoft Office and medical billing software
Salary: The salary for a Revenue Cycle Specialist varies based on location, experience, and qualifications. The average salary for this position is between $50,000 and $70,000 per year.
Benefits: The benefits package for a Revenue Cycle Specialist typically includes health insurance, retirement plans, paid time off, and professional development opportunities.
Where to source candidates
There are many options to consider when sourcing candidates for a healthcare revenue cycle specialist job. Here are some of them:
- Job Boards: Post on Indeed, Glassdoor, and LinkedIn.
- Professional Associations: Reach out to HFMA, MGMA, and AAPC.
- Referrals: Ask employees, colleagues, and networks.
- Social Media: Promote on LinkedIn, Twitter, and Facebook.
- Recruiting Firms: Partner with healthcare revenue cycle management recruiting firms.
- University Career Centers: Post on university job boards.
What skills to look for in a revenue specialist's resume
When reviewing candidates for your RCM position, look for certain skills that will ensure success in the role. These skills may include expertise in the following:
- Reconciling: Should be proficient in reconciling financial records to ensure the accuracy and completeness of financial data.
- Analysis: Should be able to analyze financial data, identify trends, and create reports and dashboards to track revenue cycle performance.
- Accounts Receivable: Should have experience managing accounts receivable, identifying delinquent accounts, and implementing strategies to improve revenue cycle performance.
- Invoicing: Should have a strong understanding of invoicing practices and be able to generate invoices accurately and in a timely manner.
- MS Office: Should be proficient in using MS Office software, including Word, Excel, and Outlook.
- Databases: Should be familiar with database management and be able to extract and manipulate data to generate reports and analyses.
- Microsoft Excel: Should be proficient in Microsoft Excel, including advanced functions like pivot tables, formulas, and macros, to analyze and manipulate financial data efficiently.
Revenue cycle professional certifications that are nice to have
If you're looking to hire a revenue cycle professional, it's worth considering candidates who have obtained certifications in the field. Some top certifications include the following from the American Association of Healthcare Administrative Management and the Healthcare Financial Management Association.
AAHAM Certified Revenue Cycle Professional (CRCP)
The CRCP certification from the AAHAM is an excellent credential for revenue cycle professionals. It demonstrates proficiency in revenue cycle management across a wide range of healthcare settings.
This certification covers healthcare regulatory compliance, patient access and registration, billing and collections, and revenue cycle analysis. Candidates with this certification have demonstrated a thorough understanding of revenue cycle operations and the ability to manage financial processes effectively.
HFMA Certified Revenue Cycle Representative (CRCR)
The CRCR certification from HFMA is another great certification. This certification covers topics such as patient access, billing and collections, denials management, and compliance.
Candidates who hold this certification have demonstrated a strong understanding of the revenue cycle in a healthcare context, as well as the ability to manage financial processes in a way that meets the needs of both patients and healthcare organizations.
HFMA Certified Healthcare Financial Professional (CHFP)
The CHFP certification from HFMA is a broader certification that covers a range of financial and healthcare-related topics. This certification demonstrates a candidate's healthcare finance and accounting knowledge and ability to apply financial principles to healthcare management.
This certification covers topics such as healthcare accounting and financial reporting, healthcare economics, and financial management. Candidates who hold this certification have demonstrated a deep understanding of the financial aspects of healthcare operations and the ability to use financial data to inform decision-making.
Interview questions to ask a revenue cycle candidate
When interviewing candidates for a revenue cycle position, it's important to ask questions that help you assess their knowledge, experience, and problem-solving skills in this field. By asking targeted interview questions, you can better understand a candidate's ability to manage billing, collections, and denials. It'll give you insight into their experience with revenue cycle technology and data analysis. Here are some questions to consider when interviewing a revenue cycle candidate:
- What experience do you have in revenue cycle analysis?
- How do you ensure data accuracy when analyzing revenue cycle information?
- Can you explain how you identify trends and areas for improvement in revenue cycle data?
- How do you stay current with changes in healthcare regulations and payment models that impact revenue cycle management?
- Can you describe a time when you used revenue cycle data to drive decision-making in a healthcare organization?
- How do you collaborate with other departments, such as finance and clinical staff, to analyze revenue cycle data and make improvements?
- Can you give an example of a successful revenue cycle improvement project you led in a previous role?
- How do you use technology to support revenue cycle analysis and improvement efforts?
- How do you ensure revenue cycle analysis efforts align with the organization's goals and priorities?
- Can you walk us through your experience with revenue cycle reporting and presenting analysis to stakeholders?
What About Software — Can't I Just Automate Everything?
While some RCM software may brag about using artificial intelligence, the complex nature of revenue cycle management requires human expertise to analyze and interpret data, navigate regulatory requirements, and manage patient interactions. However, RCM software can still be incredibly valuable in allowing organizations to do more with less, particularly during staffing shortages. It can help scale RCM efforts by automating certain processes and providing greater efficiency.
Automate Your In-house RCM Workflows and Increase Staff Productivity With MD Clarity
MD Clarity is a revolutionary software solution that allows healthcare providers and revenue cycle management professionals to streamline and automate in-house RCM workflows. With a few clicks, you can quickly optimize your staff's productivity while improving accuracy, eliminating tedious manual processes and costly delays.
Our goal is to make life easier for healthcare professionals, so providers can focus on what truly matters — providing the best care possible for their patients. From patient cost estimates and eligibility verification to resolving claims underpayment issues, MD Clarity takes all the worrying out of RCM tasks, allowing you to spend more time on revenue growth and strategic initiatives. If you're looking for an efficient way to manage your revenue cycle, book a demo and discover how MD Clarity can help achieve those goals.