Outsourcing complex claimsOutsourcing complex claims to a specialized first-tier entities rose 51% from 2013 to 2016, revealed Black Book’s RCM survey.

Both payers and providers cannot find enough specialized talent for reviewing complex cases and claims, especially, behavioral health care. This unfortunately leads to in-house staff making decisions and hoping the decisions stick. Revenue processes need razor-thin efficiency in this new age of healthcare and using experienced personnel for making high risk decisions makes the most of your resources.

The overhead for recruiting, retaining, and utilizing specialized staff challenges the largest groups, let alone the small- to medium- sized organizations. Outsourcing is quickly becoming standard operating procedures for cases and claims needing specialized review talent.

“Outsourcing complex claims allows hospitals to tap in to an infrastructure that can successfully recover this often lost source of revenue,” said Doug Brown, Managing Partner of Black Book.

Releasing in-house staff to focus solely on optimizing traditional claims also improved internal productivity according to 77% of all current hospital outsourcing users surveyed.

Complex claims (typically workers’ compensation, injury, catastrophe and general liability cases) present a mixture of challenges for a hospital’s billing and collections staff, who are usually not experienced in dealing with non-traditional payers.

“These claims also tend to be marginalized because they account for a relatively small amount of total hospital reimbursement and this results in complex claims written off when it’s decided limited hospital manpower is better spent managing traditional claims,” said Brown.  “In fact, when compared to traditional claims, complex claims were written off at a significantly higher rate last year.”

As a result, the complex claims outsourcing market is expected to grow at least 18% annually through 2019, adding to nearly 76% of US hospitals already outsourcing some extended business office tasks.

Only 30% of CFOs reported any hesitation in using external service firms to process their complex claims for further evaluation.

“Hospitals must do more with less, even with the accelerating pressure to streamline claims processing efficiencies and maximize profitability,” said Brown. “Outside vendors are providing hospitals with the scale necessary to optimize revenue from complex claims collections but there is room for improvement…far too few outsourcing firms fully understand the healthcare space.”

Key findings:

  • 81% of hospitals state they lack the specialized talent to resolve very difficult claims, including 92% of hospitals under 150 beds.
  • 69% of hospital CFOs state the must staff with high cost back office employees to compensate for current patient accounting systems which lack in functionality to manage complex types of claims activity.
  • 49% of hospital CFOs acknowledge that outsourcing is becoming a more viable alternative in 2017 for more parts of their organizational claim processing.