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Outsourcing RCM – Boon or Bane?

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It has been established conclusively that the costs of healthcare delivery in the United States is several times more than other developed countries in the world.  One of the major cost components involved is in billing the Insurance payers and collecting from them.  In most cases hospitals and professional physicians avail the services of Revenue cycle outsourcing companies for managing their medical billing and revenues. There are still varying perceptions and opinions about hiring these outsourced RCM companies for performing the medical billing and coding. However, the fact is that with the increase in costs and expenditures of healthcare entities outsourcing the Collections is inevitable in today’s scenario.

Revenue Cycle Outsourcing:

Revenue Cycle outsourcing involves the utilization of a third party to handle the process of medical billing and collections on behalf of the hospital or Physician.  The primary objectives of revenue cycle outsourcing are:

  • To make the process more systematic and organized,
  • To improve the speed of operations and
  • Faster collection of revenues.


The biggest constraints in outsourcing are

  • The fear of ‘losing control’ of the process and collections and
  • Loss of employment for in-house billing staff.


By deploying efficient tools and processes for monitoring the vendor providing revenue cycle outsourcing services, the control can be regained to a very great extent.  Again in several instances, the in-house billing staff has been re-trained to handle bigger responsibilities of managing the vendor rather than being retrenched.  Also, with the liberated bandwidth of resources, the management can aggressively target and acquire new patients that only increase the work load for the in-house staff.


Advantages of Revenue Cycle Outsourcing:


A few possible advantages of outsourced healthcare revenue cycle management are:

  • Collection of insurance payments in a shorter time frame.
  • Smooth running of the hospital organization as less time will be wasted in doing the paper work and senior administration and management can divert their attention and energy in acquiring new patients.
  • Receipt of new and old payments as the outsourced healthcare revenue cycle management vendor diligently works on all unpaid and denied claims.
  • Medical staff can cater to the needs of patients instead of dealing with insurance companies and working on medical billing by filing new claims or re-filing the rejected claims.


At present, the trend of outsourcing healthcare revenue cycle management is being adopted with increased frequency. The biggest challenge being faced by the Providers at present is regarding the maintenance of margins without compromising ‘quality of care’.  For this purpose, they prefer to leverage the outsourced healthcare revenue cycle management services which help them in focusing more on patients and delivering quality care. It is also to be remembered that the complexity of medical billing and its management has become much more complex with new regulations and compliance requirements. Whatever the causes maybe, the hesitancy to revenue cycle outsourcing is no longer to be seen in the Healthcare fraternity.  After all, it is a competitive world and a Provider or Hospital cannot sit idle watching as the competition that outsources its revenue cycle reaping better profits and benefits from the process. 

For more information pls. contact bala at 818-584-1680 or email at   You can also visit for more details.

About the Author:

Tanya Gill is the Public Relations Manager for ecare India based in Chennai, India. She has wide knowledge and experience in the medical industry. ecare India is a leading medical billing company offering end-end medical billing, charge entry, healthcare outsourcing,  physicians billing services and is backed by extensive domain expertise, latest technology and dynamic compliance norms. ecare is HIPAA compliant and is the first Indian medical billing company to get ISO 27001: 2005 certified for information security management. ecare is also ISO 9001:2008 certified for quality management. By providing outsourced medical billing services, ecare makes it feasible.


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