Inhouse vs Outsourced RCM Analytics – The Ideal Choice in Healthcare?

Revenue cycle management (RCM) is managing patient data, claims, and payments from start to finish. Here, we’ll discuss the role of RCM analytics in healthcare and determine the differences between in-house and outsourced analytics services.

The healthcare industry deals with many administrative and financial tasks. From patient applications to transactions with insurance companies, the processes can be complex and time-consuming. This is one of the reasons why billing takes so much time in hospitals, causing more delays and frustration for the administrators and patients. 

Fortunately, RCM provides an effective solution for this. To improve things, RCM analytics identifies the root cause of delays and helps streamline the entire process. But what is RCM? What does RCM stand for?

RCM is Revenue Cycle Management, the process of identifying, collecting, and managing payments from patients of the healthcare center. It is necessary for patient management and financial management. The RCM market is expected to grow at a CAGR of 12.2% between 2025 and 2032 to reach $342.6 billion by 2032. 

Revenue cycle management (RCM) software streamlines and automates revenue cycle management. So, what is RCM software, and how does it work? RCM software is similar to medical billing software that tracks the patient’s case from initial registration to discharge. It is used to calculate the final payment, insurance payouts, etc. It also maintains a proper record of each patient with ID. 

However, healthcare establishments face many problems in medical billing and RCM. RCM analytics provides a reliable solution for these issues. But should a hospital opt for in-house billing or outsource the task? 

Let’s find answers to these questions and more!

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RCM Challenges in Healthcare

Before we explore the differences between how in-house RCM and outsourced analytics work, let’s first understand the challenges of healthcare RCM analytics. 

Human Error 

The hospital staff is often overworked and stressed due to the extensive responsibilities they handle. By asking them to manually manage patient registrations and payments, there’s a high risk of human error or a wrong entry. 

Complex Process 

The roles and responsibilities of front-end and back-end employees are different. RCM has to effectively bridge the gap to minimize confusion, incorrect information, delays, etc. The process is just too complex and stressful without using the latest technology. 

Missing and Outdated Data 

With the administration fragmented into individual departments, there’s a risk of patient data missing from files. For example, if someone forgets to mention the information about the patient’s insurance in a report, it could lead to a series of confusion and miscommunication. RCM data management through modern data warehousing services can solve this problem. 

Changing Regulations 

The regulations in the healthcare and insurance industries can change, resulting in confusion among patients and administrative departments. It could be something as simple as a hospital not having a tie-up with a certain insurer, leading to more paperwork and exploring alternate options. 

Patient Volume 

Hospitals are among the busiest places on earth. Unfortunately, this puts excessive pressure on the staff to work around the clock. The high patient volume directly translates to tons of paperwork, reports, and bills. Using RCM software and data analytics helps handle this high volume. 

Fraud Detection 

The hospital staff also has to deal with fraudulent transactions and wrong insurance claims. Manually investigating each claim is exhausting. What if they can detect and predict such activities proactively? RCM analysis can be used for fraud detection to identify potential frauds in the early stages.

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In-house vs. Outsourced RCM Analytics in Healthcare: Which One to Choose  

RCM analytics can help healthcare businesses overcome various challenges they face in managing patient data and claims. But should they develop an in-house RCM analytics model or outsource RCM analytics to a third-party service provider? Which method is more effective? 

In-House RCM

Let’s first check out what in-house RCM analytics in healthcare and medical billing actually are. In-house RCM is also called medical billing. The entire setup is managed by the hospital staff with little or no input from service providers. The service provider might build the RCM analytics model and hand over the responsibility to the hospital staff. This gives the business more control over the process but also increases workload. 

Advantages of In-house RCM 

• With in-house RCM analytics, the healthcare center will have more control over the process as the staff performs every task. 
• The top management can closely track the process to give feedback and insights to the staff and help them correct their mistakes. 
• The managers can decide when to upgrade the system and which new tools to adopt. 
• Since the establishment would have already invested in a medical billing setup, it would be easier to continue with it and generate returns. 

Disadvantages of In-house RCM 

• Manually working on the medical billing system can be time-consuming and result in many errors. 
• Completing every task will be an extra burden on the staff since the responsibility cannot be shared with others. 
• The establishment will have to call an expert from outside if there’s a glitch the in-house team cannot solve. This costs extra money. 
• The cost of maintaining an in-house billing system can increase as the model becomes old and outdated. 

Outsourced RCM Analytics

Outsourced RCM analytics are offered by third-party companies that handle all the responsibilities of setting up the analytical model, creating integrations between different systems within the establishment, and managing the central repository with patients’ details. What is outsourced RCM analysis in healthcare and medical billing?

It is an interconnected approach to setting up a comprehensive and robust management system on a cloud platform to streamline and automate financial management in the healthcare center. A single interface or platform like the Power BI dashboard can be used by various departments like the front desk, billing, clinical, etc., to access patient data and update the records in real-time. It is a collaborative model aimed at boosting overall efficiency, performance, and revenue for the business. 

Advantages of Outsourced RCM Analytics 

• When a complex task like RCM analytics is outsourced, it frees up many internal resources, especially time. The staff can give their complete attention to patient care. 
• By hiring experts to manage RCM performance analytics, the healthcare center can see greater accuracy and compliance in the records. 
• Third-party and outsourced RCM analytics will be hosted on cloud servers and use advanced technology like AI and ML. This will accelerate the processes and deliver real-time results. 
• The patient data will be stored in a data warehouse which acts as a central repository connected to all systems in the establishment and allows real-time access. 
• It’s likely to cost less to outsource the process than to maintain a complex in-house system. In the long run, there will be more returns and profits. 
• The outsourcing company will keep detailed reports and share them regularly with the healthcare center. This increases transparency in the process. 

Disadvantages of Outsourced RCM Analytics 

• With outsourced RCM analytics, the healthcare center may not have full control over the process and has to ask the service provider for changes. 
• There might be hidden fees and other costs if the establishment doesn’t do proper research in selecting the service provider.

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What are the 12 Steps of RCM?

Data analytics companies offer nearshore and offshore RCM analytics services in the healthcare industry. They set up RCM analytics to streamline the twelve steps of revenue cycle management, manage patient data, track claims, and increase ROI. They start by identifying the KPIs to measure and improve the establishment’s financial health. 

What is a KPI in RCM? KPI stands for Key Performance Indicator, a metric used to measure if the RCM cycle is aligned with the hospital’s vision and objectives and is delivering the required results. 

The twelve steps of revenue cycle management in medical billing are as follows: 

• Schedule the patient’s first appointment with the doctor to help them receive timely care and treatment. This step is crucial as other steps depend on the data added during patient registration.
• Verify patient information to confirm their eligibility to claim insurance and to calculate whether they will have to pay anything out of their own pocket.
• Preauthorize a few services to reduce paperwork and waiting times. This can bring down the rate of claim denials.
• Track patient visits and update their records about their health, medical recommendations, expenses, etc., during the treatment.
• Transcribe the medical jargon and convert it to billable documents like receipts and invoices (consultation fee, cost of medicines, etc.).
• Assign codes for each service/ item on the list to create error-free documentation for processing claims. This accelerates insurer payments.
• Generate claims for submission by creating a detailed bill with the list of services provided to the patient. This becomes the outstanding bill that needs to be paid.
• Apply for payments from insurance companies by sharing accurate records and reports about the patient.
• Generate a secondary bill that the patient (or their family will have to pay) if insurance does not cover the total cost.
• Create invoices for the remaining balance (if any) after the insurer makes the payment on behalf of the patient.
• Tally accounts to match the bill amount with the claim amount sent by the insurance company. This comes under revenue.
• Address denied claims by resubmitting relevant information and cross-checking the data for accuracy.

Fortunately, hospitals can manage all these steps by investing in the latest revenue cycle management technology and partnering with analytics service providers to maintain the system. This reduces the pressure on hospital employees and enhances patient experience. It also maximizes efficiency and increases reimbursements by limiting denials. 

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Conclusion 

Depending on the business’s mission, vision, and objectives, RCM analytics can be developed in-house or outsourced to managed service providers. Both methods have advantages and disadvantages. The right choice is case-sensitive, though most healthcare establishments prefer to outsource the process to revenue cycle management companies. This frees up internal resources, reduces stress on existing staff, and speeds up the billing process. Partner with a reliable data analytics company to adopt RCM analytics and improve the quality of patient care.

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More in Data Analytics Services Providers 

Data analytics companies use advanced technologies like artificial intelligence and machine learning to implement automated RCM analytics in healthcare centers. Streamline medical billing to eliminate errors, shorten the management cycle, minimize claim denials, and maximize reimbursements. Make data-driven decisions to enhance patient care services. 

Read more from the below links to learn how data analytics can help to boost your business. 

• A Comprehensive Guide to Revenue Cycle Analytics- All You Need to Know
• 10 Steps to Create a Data-Driven Culture

Fact checked by –
Akansha Rani ~ Content Creator & Copy Writer

• Data Analytics,
• data analytics consulting,
• data warehouse,
• Inhouse RCM,
• Outsourced RCM,
• RCM Analytics,
• revenue cycle analytics,
• Revenue cycle management,