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The enormous financial pressures healthcare systems face today may seem crippling, from labor shortages and increased administrative tasks to capacity constraints and stubborn inflation. Despite these obstacles, healthcare systems have access to at least one lever it can pull: strategic outsourcing.

Hiring out to a third-party is hardly a new concept in revenue management or cost reduction exercises, but it has evolved into a powerful tactic healthcare systems can use for driving efficiency, improving collections, and giving internal teams space to work on high-impact work. Strategic outsourcing takes it further, by partnering with a provider that focuses on resource-intensive functions (such as billing), so the hospital can focus on the highest quality patient care.

Complex claims — which includes Workers’ Compensation and Motor Vehicle Accidents — are a natural fit for strategic outsourcing. The benefits of strategic outsourcing far outweigh what time-consuming, manual software delivers or what in-house teams can likely accomplish in a standard work day.

Let’s take a closer look at how strategic outsourcing impacts a health system’s bottom line.

Defining Strategic Outsourcing in Healthcare

Whereas outsourcing involves offloading tasks to a third-party, strategic outsourcing means partnering with specialized vendors who align with the health system’s goals. These partners bring deep expertise, technology, and processes to the table.

In healthcare, this can include everything from IT and human resources to supply chain management and revenue cycle functions. The right strategic partner goes beyond handling transactions and develops a plan to achieve the system’s revenue goals.

Why Outsourcing Complex Claims Makes Sense

Strategic outsourcing of complex claims can be a critical component of a health system’s billing success. Complex claims present a wide range of challenges, especially for in-house management.

Workers’ Compensation (WC) and Motor Vehicle Accidents (MVA) are notorious for their difficulty, which explains why they fall under the complex claims category. The difficulty stems from challenges such as:

• Requires a staff member with familiarity in state-specific laws, including deadlines, documentations, regulations, fees schedules, and reimbursement rules.
• Documentation for the injury must be precise and detailed with a WC claim, while MVA documentation must show accident-related care and financial responsibility.
• Needs a substantial amount of time coordinating with insurers, adjusters, attorneys, and employees.
• Must avoid errors that lead to underpayment, denial, or write-offs.
• Engage in legal communications.

With higher potential for incomplete or incorrect information, human error, lack of follow up, and claim mismanagement, it creates a perfect storm for lost revenue. WC and MVA claims are often better managed by outsourcing with strategic partners who focus exclusively on these cases and can navigate each of these nuanced challenges.

Financial Benefits of Strategic Outsourcing

Partnering with the right complex claims management solution provider will benefit a health system’s bottom line in multiple ways.

• Increased collections: A specialized partner draws on their experience with WC and MVA claims to handle tricky billing processes and help hospitals recover more of the money they’re owed.
• Faster reimbursement times: Red tape doesn’t have to be a barrier. A strategic outsourcing partner knows how to cut through administrative complexities and expedite payment.
• Lower administrative costs: Internal teams are likely already stretched to maximum capacity with core claims. Hiring more team members incurs higher administrative costs, as well as costs associated with staffing, coding, collections, and software technology.
• Scalable support: With outsourcing, the vendor can scale with the client, which takes the burden of hiring away from the health system. They adjust seamlessly to changing claim volumes too.

How Patients Benefit with Strategic Outsourcing

Though not directly related to patient care, when a healthcare system adopts strategic outsourcing to handle complex claims, both the system’s bottom line and patient care benefit.

Freeing up an in-house RCM team from complex claims handling means it can focus on core claims from public- and private-insured individuals. It also reduces the heavy backlog and denials that clog up the billing cycle.

Additionally, patients can receive a better experience when their billing questions are handled in an efficient, expeditious manner.

Strategic Outsourcing Positively Impacts the Bottom Line

Strategic outsourcing can be a cost-saving resource and an integral part of a health system’s revenue growth strategy. Health systems that embrace strategic outsourcing in the right areas, such as complex claims, can drive stronger financial performance without sacrificing patient care. By offering lower administrative costs, increased collections, and faster reimbursement times, healthcare can focus on other priority areas.