October 2020


Five myths about outsourcing revenue cycle management

by Robert McCarville, MPA, Erin Malloy, and Tonya LaRue, MBA

Providing high quality care is crucial to any medical business, but it is an efficient revenue cycle management (RCM) process that keeps the lights on. RCM is the process of managing funds and collecting payments for care provided. Its essential components include: medical credentialing; eligibility verifications; medical coding optimization; charge capture and billing; claims review and submissions; denial management; accounts receivable follow-up; and patient collections.
While some ophthalmic practices and ambulatory surgery centers (ASCs) choose to conduct this process internally, many that choose to outsource some or all of these RCM components have proven there can be many benefits to doing so.
Still, despite their successes, there are several circulating myths about outsourcing RCM services, keeping medical businesses from looking seriously into options that could increase their revenue. It is time to debunk those myths.

Myth #1: Outsourcing to an RCM firm is only for businesses that do not already have someone in house.
This is not true. Outsourcing is one avenue to eliminate downtime when your employed RCM staff are on vacation, maternity leave, extended sick leave, gaps between hiring staff that leave, etc. If your internal RCM staff consists of one or two people, those extended leaves have major impacts on cash flow.
In addition to being beneficial to practices looking to improve consistency of service, outsourcing RCM can help those interested in improving “quality of work.” While internal teams are no doubt working hard, everyone tends to think that their own team is the best—and maybe they are. However, an outsourced RCM firm can show data on the results of several clients, enabling you to compare those results to the performance of your internal staff. If metrics of the RCM firm are quantifiably better, improved results mean more cash flow to outsource vs. keeping internal staff.
Outsourcing to an RCM firm may also be helpful to practices or ASCs concerned with the most up-to-date RCM trends. An RCM firm tends to include more people with a wider range of specialties and RCM experiences than an internal staff, potentially making the firm more knowledgeable and better able to ward off issues facing businesses today.

Myth #2: Outsourcing RCM is too expensive.
On the contrary, RCM can actually be more cost effective, due to its potential to increase revenue through improved collections and reduce internal costs (salaries, benefits, office space and supplies, and training).
The reason many think outsourcing is too expensive is that hiring an RCM firm can in some cases cost more than what you may pay your internal staff. However, that does not take into account what it “costs” you when issues occur, such as employee leaves of absence or staff errors. You are also responsible for the ongoing costs of computer hardware, workspace, health insurance/benefit increases, etc., for internal staff. In the end, if outsourced RCM can demonstrate improved results with solid data, paying more to hire an outsourcing firm may yield better financial results for your business.

Myth #3: By outsourcing, I will lose visibility and control of my RCM operations.
Outsourcing does not mean losing visibility but rather gaining an additional resource to help manage your revenue cycle processes and resulting cash flow. RCM firms should serve as another set of eyes and controls for your practice or ASC, helping free up time for the client management team by actively monitoring revenue cycle billing and addressing issues immediately.
Outsourcing also does not mean your practice or ASC loses control. In fact, a good RCM firm should work with their clients to implement the client’s desired policies and controls. While an outsourced firm may offer perspective as to what they often see, the client should ultimately approve and expect implementation of their policies by the firm.
Additionally, while some RCM firms use their own software, which can affect visibility, others will use your existing software so that all activity, transactions, and reporting is transparent and always accessible by the client.

Myth #4: Keeping all RCM operations inside our organization will keep data more secure.
A trustworthy outsourced RCM firm should be able to show and be willing to agree to secure data transfers between the client and itself. Many RCM firms will log into the client’s system remotely to ensure no data is stored at the firm.

Myth #5: Billing patients is the most important part of RCM; a full-service RCM vendor is not necessary.
While billing a patient is important, it is actually one of the easiest aspects. Many errors occur during other areas of the RCM process. Full-service RCM firms employ an experienced staff with built-in redundancies to handle all RCM components. Full-service RCM firms should:
• Be trained to perform patient phone calls for billing questions and payments
• Have certified coders on hand to review the ever-changing billing codes, ensuring the practice or ASC is capturing all possible revenue while avoiding potential delays due to billing errors
• Have routine processes and people to work insurance denials and “zero pays”
• Have people in place to routinely work aged accounts receivable
• Be able to provide monthly reporting on results
• Be able to verify insurance benefits or interact with all insurance companies as needed
• Be available to troubleshoot issues with the client at all times via phone/email/fax
By never cutting corners, whether in RCM execution or in staff experience, full-service firms may offer significant value to your practice or ASC.


In the world of medical billing, there is no “one-size-fits-all” solution. Some RCM firms address certain parts of the revenue cycle, while others provide a more comprehensive solution. An experienced RCM consultant can help you determine which outsourcing opportunity, if any, makes the most sense and will offer the greatest benefit to your medical business.

About the authors

Robert McCarville, MBA
Managing Principal
and Consultant
Medical Consulting Group
Springfield, Missouri

Erin Malloy
Principal and Consultant
Medical Consulting Group
Springfield, Missouri

Tonya LaRue, MBA
RCM and Accounting Consultant
Medical Consulting Group
Springfield, Missouri

Five myths about outsourcing revenue cycle management Five myths about outsourcing revenue cycle management
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