The Outsourcing Option
A look into why HME providers might want to consider outsourcing their billing and how they can implement it.
- By David Kopf
- Feb 28, 2020
As providers focus more on the core of their businesses
— improving patient outcomes, expanding referral relationships, and driving
revenues — they are taking a second look at the business processes that are
adding layers of cost and complication that keep them from executing on their
One of those processes is billing. Traditionally, providers have thrown
considerable staff resources at this component of their businesses, but is that
really the ideal situation? Does it advance their core business?
Outsourcing could be the answer to those questions. To take a deeper dive
into outsourced billing and discuss how providers can implement it, Joey
Graham, executive vice president and general manager of HME billing service
company Prochant Inc. sat down with HMEB. Prochant was founded in 1999,
and for the past 20 years, it has provided outsourced billing.
HME Business: What are the key pain points for HME providers when it
comes to in-house billing?
Graham: The pain point that we hear most often is providers struggling with
staffing. The U.S. is experiencing record-low unemployment right now, creating
a job-seekers’ market. Wages are on the rise, and many providers are losing
employees they have invested hundreds of hours in training and development
in. Providers are struggling to keep their processes staffed consistently and reliably,
as well as finding new talent.
What was the traditional model for conducting billing within an HME
provider’s operation? Why does that model not necessarily work these
Traditionally, providers would handle all revenue cycle management (RCM)
activities in-house. Over the past several years, the industry has seen a shift
to more and more use of outsourcing for strategic points within the revenue
cycle, such as CPAP resupply management and A/R collections. This is because
providers recognize that their core competence may lie elsewhere and bringing
in the right outsourcing partners can create significant synergies in their business.
I don’t know of any providers who have a real passion for HCPCS and
ICD-10 coding, Medicare LCDs, or complex fee schedules. Instead, their passion
lies with servicing their patients and referrals, being a critical component of
the post-acute care continuum. Couple this with the aforementioned staffing
challenges, and it makes more and more sense for providers to strategically
outsource RCM functions to experts.
Why does outsourced billing make sense? Why should a provider do it?
There are many reasons that providers should consider outsourcing their billing.
We have already discussed the staffing challenges that nearly every provider is
facing, as well as the lack of passion/expertise in HME RCM task management.
One of the biggest draws to fully outsourced billing is the shift from fixed salaries
of a billing team to a collections-based cost structure. Essentially, the outsourced
billing company gets paid when you do. Imagine paying your A/R collectors 100
percent commission based on what they collect. It creates powerful alignment
between the RCM team and the providers’ business goals.
How does outsourced billing work? In other words, do you have a thumbnail
description of a typical outsourced billing arrangement?
Yes, we call it “full-service billing,” and it’s a suite of services that essentially
take over your Medicare, Medicaid, and third party (commercial payer) billing
and collections. We take over starting with order confirmation. We transmit
your claims, work your rejections, help you manage your holds, and take over
denial and A/R management activities. We also post your cash and help you stay
on top of everything with ongoing account management and reporting services.
What kind of gains can be accomplished with outsourced billing?
- Significant improvements to your key performance indicators (KPIs) such
as DSO, 90+ A/R balance, cash flow, and write-off rates.
- Consistent and reliable delivery of your core RCM services.
- Strong communication about your RCM processes and proactive notification
- Experience and expertise, industry best practices.
Is there a typical/archetypal provider that outsources its billing?
No, we have seen providers of all sizes and specialties engage in outsourced
Do you have any advice for providers that are on the fence about whether
or not they should outsource their billing?
We give people the option to start small if they’re uncertain about full
outsourcing. For example, providers can only outsource Medicare, or a certain
list of branches. Or, some providers will only outsource certain processes like
denials or cash posting.
How does the provider work with Prochant?
We partner with our clients by first matching our solutions to their problem
area(s) and then undergoing a formal project management process to map out the
provider’s existing processes and how they will convert over to the Prochant workflow.
Before we go-live, we pilot the new processes with our clients and go through
a QA/feedback phase to ensure the processes are meeting the client’s standards.
How is the business integration accomplished? In other words, how does
Prochant fit in with providers’ workflows, branding, service standards, etc.?
We realize that HME is not one-size-fits-all. Prochant customizes its service
delivery to fit the client’s unique business model and requirements. This is
why we invest heavily in project management to ensure that our solutions are
custom-tailored to the HME provider’s needs.
How is the technology integration accomplished; how does Prochant billing
staff safely, securely and privately “link” with providers’ billing systems?
Prochant takes security extremely seriously. In fact, we are in the final stages
of obtaining HITRUST certification — healthcare’s leading HIPAA certification.
While it has been extremely expensive and time-consuming, we know that the
investment is well worth it for both ours and our clients’ peace of mind when it
comes to data security.
Prochant’s systems integrate with all major billing platforms for a seamless
client experience. Hosted in Azure, Microsoft’s cloud, Prochant’s workflow and
analytics platforms give clients a new level of visibility to the health of their
Are you able to quantify any of the results/gains/improvements that Full-Service Billing achieves for its clients?
Results vary wildly and are primarily driven by the success of the collaboration
and partnership between Prochant and the client. We have seen DSO
improve from 80-plus to the 20 to 30 range. We have also seen 90-plus A/R
balances reduce from 50 percent-plus to the 10 to 15 percent range. And we
have seen net revenue collections rise from 85 percent to over 98 percent. All of
these improvements were the result of deep collaboration and certainly did not
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.