Third of Providers Regret Revenue Cycle Outsourcing Purchase
Buyer’s remorse and dissatisfaction were common among provider organizations using Cerner, nThrive, and Parallon for revenue cycle outsourcing, KLAS reported.
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By - Provider organizations are finding that full revenue cycle outsourcing is not meeting expectations, according to a new market report from KLAS.
For the report “Outsourced Revenue Cycle Services 2019,” KLAS spoke to 140 provider organizations using either revenue cycle outsourcing or extended business office services to identify the vendors delivering the most value.
Of the respondents using revenue cycle outsourcing, one-third said they would not purchase their vendor’s services again, and an even larger number reported dissatisfaction with their vendor’s full revenue cycle outsourcing product.
“Provider organizations investing in outsourced revenue cycle services to relieve cost and resource burdens need their firms to take true ownership of the complex revenue cycle and deliver accordingly,” KLAS stated in the report. “Unfortunately, some firms are falling short—most common for clients using full revenue cycle outsourcing (RCO).”
Buyer’s remorse and dissatisfaction were not limited to one revenue cycle outsourcing vendor, the report found.
In fact, multiple vendors experienced falling overall satisfaction since 2017. Specifically, overall satisfaction decreased by 18 points (out of 100) for Cerner RCO, 13 points for nThrive, and 10 points for Parallon.
Seventy percent of interviewed Cerner clients also said they would not use the IT vendor’s revenue cycle outsourcing services again. KLAS found that nearly one-half of Cerner RCO customers felt the vendor was nickel-and-diming them. A significant number of customers also felt that Cerner oversold their full revenue cycle outsourcing services, with some reporting Cerner resources as “inexpert” and “slow to work on outstanding claims.”
Respondents using nThrive’s revenue cycle outsourcing solutions reported “few consequences for the firm if they underperform.” nThrive customers in the report also said the vendor offered “little strategic guidance” to improve revenue cycle performance.
The report also found providers using Parallon believe the vendor is “quick to give up on hard-to-resolve claims and slow to respond to concerns,” while Conifer Health Solutions customers reported a “cookie-cutter approach and insufficient staffing.”
Disappointing results from full revenue cycle outsourcing is not uncommon. A 2018 analysis from public accounting, consulting, and technology firm Crowe showed that hospitals outsourcing the entire revenue cycle reported higher claim denial rates and longer patient collection times.
A three-hospital system in eastern Washington also recently filed for bankruptcy shortly after outsourcing their revenue cycle, citing the vendor’s failure to process large amounts of accounts receivable in a timely manner.
Despite unsatisfactory results, 80 percent of hospitals in a 2018 Black Book survey said they are considering full revenue cycle outsourcing to reduce costs as the industry transitions to value-based care. The revenue cycle outsourcing market is also slated to grow, reaching $23 billion by the end of 2023.
Many provider organizations are still interested in outsourcing their financial processes. And leaders should turn to top-performers to realize the benefits of outsourcing the revenue cycle. KLAS identifies three such vendors.
Navigant’s revenue cycle outsourcing product earned top spot in terms of overall score. The vendor received a total score of 89 points (out of 100) in 2019, a 2.2 point boost compared to 2017.
Smaller provider organizations with less than 500 beds primarily use Navigant for revenue cycle outsourcing, and they commend the vendor for its flexible approach to contracting for and executing services, KLAS reported. The contracts typically include performance metrics for the vendor to meet.
Provider organizations also highly ranked revenue cycle outsourcing services from R1 RCM and Ensemble Health Partners, praising the former’s ability to identify revenue cycle vulnerabilities and the latter’s engaged executives and proactive recommendations for improving denial rates. However, KLAS noted that the firm had limited data on the two vendors.
Overall, the KLAS rankings for revenue cycle outsourcing vendors with robust data in 2019 were:
- Navigant (89 points)
- nThrive (68 points)
- Conifer Health Solutions (66.1 points)
- Parallon (65.9 points)
- Cerner (52.7 points)
