Provider Strategy

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
• Oct 06, 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 core missions.

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 days?

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?

Several gains:

• 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 of issues.
• 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 billing.

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 revenue cycle.

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 happen overnight.