Many businesses struggle with revenue cycle management, or RCM, spending hundreds of billions each year to get things right. This can happen for a variety of reasons. One common issue is not having a good understanding of their costs. Without knowing production numbers and overhead, businesses can’t accurately price their products or set adequate margins. As a result, they may end up losing money on every sale.
Another common issue is that businesses fail to track or properly manage invoices and payments. This can result in missed payments, late fees, and other penalties. Businesses may also struggle with managing billing and collections. This can include everything from creating invoices to following up on past-due accounts. To these last two challenges, Southwest Recovery Services can be of service!
What is revenue cycle management (RCM)?
Revenue cycle management is the process of collecting payments for goods or services. The goal of RCM is to optimize the revenue cycle so that it is as efficient and effective as possible. This includes everything from first contact with a potential customer to collections and disbursements.
There are three main phases of revenue cycle management: pre-service, service, and post-service. Pre-service operations involve all of the activities that take place before a product or service is delivered. This might include marketing, pricing, and customer acquisition.
Once a customer has been acquired, service operations begin. This is where the actual product or service is delivered. Finally, post-service operations take care of billing, collections, and disbursements.
Revenue cycle management is a critical part of any business, but it can be especially important for businesses that deal with large amounts of money, such as hospitals or insurance companies. By optimizing the revenue cycle, businesses can increase their profits and improve their cash flow.
The pros of RCM outsourcing
There are many pros to outsourcing your RCM to a specialty provider. One of the best ways to illustrate what they are is to look at a specific business type. For our purposes, let’s dig a little deeper into a healthcare practice.
When it comes to managing a healthcare practice, there are a lot of moving parts. From scheduling appointments and filing insurance claims to billing patients and collecting payments. That’s a lot to stay on top of!
This is where revenue cycle management comes in. RCM includes all of the processes involved in managing patient payments, from start to finish. Many healthcare practices choose to outsource their RCM to a third-party company. There are a few reasons why this can be a wise decision.
For one thing, it can free up valuable time. Rather than spending hours on billing and collections, you can focus on providing quality patient care. In addition, outsourcing RCM can help to improve the practice’s financial health with the knowledge that you’re collecting on all past-due accounts and not running into any cash flow issues. Some companies might even have experience working to maximize reimbursements from insurance companies so that your revenue cycle isn’t dependent solely on what the patient is able to pay.
Think about your revenue streams and what it takes to ensure those dollars aren’t just being billed but coming in as well. How much time are you spending away from your business, and how might a knowledgeable third-party provider be able to shift that burden off of you?
The potential cons
There are a few dangers to be aware of when outsourcing RCM. First, an inexperienced RCM provider may not have the knowledge or expertise to properly manage this side of your business. This can lead to errors and inefficiencies that cost you money. A reputable company will always take the time to learn what you do and develop relationships in those sectors while paying attention to compliance matters and best practices.
Secondly, when you outsource RCM, you are relying on the provider to maintain accurate and up-to-date records. If the provider makes a mistake or fails to keep accurate records, it can cause issues. Discuss record-keeping with the provider before you hire them to avoid headaches.
Finally, you may be sharing sensitive information with the provider. Make sure they respect that and are taking important steps to protect the data that you share.
Why you should use our debt recovery service to help with RCM
Not to worry. Most problems can be avoided by choosing a reputable and experienced RCM provider, such as Southwest Recovery Services. When you work with us, you get a reputable and experienced provider that takes the time to learn your business. You can rest assured that your revenue cycle will be managed effectively and efficiently, and your sensitive information will be safe and secure.
Ready to get started? Tell us what your specific needs are, and let us show you how to shed a lot of those cash flow burdens and RCM issues.