Many hospitals and health systems have already discovered the benefits of outsourcing revenue cycle management. Some turn the entire function over to an outside vendor, others segment out pieces, such as backlog or specialty coding, self-pay collections or accounts receivable (A/R) liquidation services during a patient accounting system implementation. If you are thinking about going this direction or starting to talk to vendors about how they can help, developing a request for proposal (RFP) is a critical step in the decision-making process.

A good hospital RFP serves multiple purposes. One, it forces you to think through your exact needs and expectations. Two, it helps you identify vendors who have the potential to provide the revenue cycle services and expertise you need. And three, it narrows the field to firms with the financial strength, stability and commitment to be a long-term partner in helping your hospital or health system optimize revenue cycle management.

What to look for

Revenue cycle management and A/R management RFPs are often very detailed and complex. These eight requirements, along with how McKesson Business Performance Services (McKesson) measures up, are a good place to start:

1. Financial strength and stability. Vendors must be able to provide financial information such as a Dun & Bradstreet (DnB) number, credit score and financial stress class; operating capital and profit and loss statements. What you’re trying to determine is their ability to stand the test of time and provide consistent, high quality services without interruption.

A solid benchmark is McKesson, an experienced, financially stable healthcare revenue cycle management company. We have regional centers of excellence and advanced clinical knowledge, process expertise, and technology. Our experienced management, well-trained workforce and dedicated compliance experts produce high recovery rates with unsurpassed efficiency, low costs, high ethical standards and compliance with all relevant laws and regulations.

2. Experience helping customers through a system transition. Whether or not you plan to transition your hospital or health system to a different patient accounting system, ask the revenue cycle vendors you’re considering if they have helped other providers with revenue cycle transition or accounts receivable (A/R) liquidation projects.

McKesson has deep experience and results that meet or exceed industry benchmarks for A/R performance during system transitions. Our dedicated transition team works with customers to include market-specific targets, such as percent of A/R over 120 days, average days in AR, average charge lag and average clean claim ratio, in our contracts. To maintain customers’ cash flow after a transition, we establish a ramp-up period during which a percentage of cash comes from new A/R worked by McKesson, and another percentage from existing A/R work-down.

3. System agnostic approach. Your vendor should be experienced in most major healthcare information systems and electronic medical records (EMR) systems—yours, in particular. They should be able to help you leverage the information technology investments you’ve already made and, if necessary, help you transition from a legacy A/R system to a new one.

McKesson has worked with most healthcare information systems, and has generated, submitted and processed more than 50M claims and posted approximately 68M remits via the client’s specific platforms.

4. Staffed and committed to regulatory compliance. Make sure your vendor has a dedicated team who reviews all payer and governmental regulations and compliance updates and trains staff accordingly.

With an annual compliance budget of more than $7 million, McKesson has a compliance agenda modeled after the Department of Health and Human Services Office of Inspector General (OIG) Compliance Program Guidance for Third-Party Medical Billing Companies. Our culture promotes conduct that conforms to federal and state laws; federal, state and private payer healthcare program requirements; and McKesson’s business policies.

5. Disaster recovery/redundancy. Make sure to include questions about business continuity planning and system redundancies in your RFP. This consideration should be a minimum requirement for the healthcare revenue cycle vendors you are considering.

McKesson has the resources to provide disaster recovery capabilities such as secure data centers on separate power grids, redundant data backup and recovery, and the ability to shift claims processing from one location to another if the billing function is affected. We have systems to back up and store electronic patient information and other operational electronic data offsite and/or through portable storage devices outside the affected area.

6. Referenceable customers. Can your potential vendor provide a list of customer references, preferably current customers who have been with them for several years?

McKesson not only provides a reference list, they encourage potential customers to call references and ask in-depth questions, emphasizing the revenue cycle functions they’re most concerned about and any red flags that have come up during discussions.

7. Collaborative approach. This is a good topic to discuss with the vendor’s references, but you can also glean information with careful questions. Ask about their business approach in various scenarios, such as full outsourcing versus selected revenue cycle functions, a patient accounting system transition, a new hospital versus an established system, etc.

McKesson works closely with customers to understand their needs and proactively address potential issues without being prompted. By offering a flexible delivery model, McKesson tailors each engagement to the culture and goals of the client.

8. Only serves healthcare clients. You know better than anyone the intricacies and importance of complex healthcare regulations, data protection and sensitivity to patients’ healthcare needs. Extensive or exclusive healthcare experience should be another minimum requirement in your RFP for the vendor candidates you are considering. With this focus, they’ll keep up with evolving regulations, hire the appropriate staff and benchmark performance based on industry standards.

McKesson is only in the healthcare segment. We support more than 1,700 healthcare customers representing more than 30,000 providers, and have managed more than 5M calls from patients. Our clients have selected us as their revenue cycle management partner because we deliver on our commitment to their operational and financial success.

Where to go from here

Outsourcing revenue cycle management is a serious decision. Including these key areas in your healthcare RFP will help you select a vendor such as McKesson. Our experienced teams can augment your revenue cycle functions to help you improve your financial health and revenue cycle management efficiently, at the lowest cost and with the highest compliance and ethical standards.

Learn more about how McKesson Business Performance Services can help strengthen your revenue cycle performance to improve the financial health and profitability of your whole organization.

Top KPIs Every Revenue Cycle Leader Should Measure

 

Kamron Lachney

About the author

Kamron Lachney serves as the vice president of Hospital Operations for McKesson. He is currently responsible for acute related revenue cycle management which includes coding, revenue integrity, systems management, billing, follow-up and denials. Lachney also possess an Epic Certification and has been deeply involved in many Epic implementations startups, integrations and turnaround projects. He has over 15 years of experience in both acute and post-acute settings at four of the largest and most prominent systems in the nation which include Memorial Hermann Health System in Houston, TX, Ochsner Health in New Orleans, LA, Kaiser Permanente, Mid-Atlantic Region and WellStar Health System in Atlanta, GA.  Lachney is a task oriented, innovative, articulate thinker that is results driven and leads by using his emotional intelligence and servant leader approach.