Now that you’ve completed your due diligence and you’re sure that implementing a new revenue cycle management (RCM) system is the right course of action, you will need to gain executive buy-in. Typically, this means communicating your conclusions and recommendations to build consensus with IT, Finance, and the executive team that runs the organization.
To make this easier for you, we’ve created some tools to assist you in that communication process:
1. Messaging support
While the days of writing memos are long gone, you’ll still need to develop a succinct narrative to support your recommendation. The following are some ideas that might help:
Briefly describe the internal needs assessment you’ve completed that supports your recommendation.Describe each of the areas in your current billing functions where your team has challenges or gaps in capabilities, and the impacts.Detail all of the functions your team requires to seamlessly complete your revenue cycle management (and whether or not you have those capabilities today). Take into account coding and billing, denial management, patient engagement, compliance, business intelligence, payor contract negotiation, PAMA reporting, keeping the system up to date, and any other areas affecting your revenue.Highlight the advantages of tighter integration between clinical and financial data.
Explain the advantages of additional organizational transparency and visibility to better track key performance indicators (KPIs).
We also recommend being prepared to articulate the options and benefits of managing the RCM process in-house with your own team or outsourcing the RCM process.
2. Understanding your current total cost of billing
Many organizations fail to understand all the various elements that comprise their true cost of billing. In fact, we have found that laboratories routinely underestimate their total cost of billing by a factor of 4X, with one of the largest costs being uncollected cash. As a result, they try to improve their profitability by reducing the cost of individual components of the billing process, such as hardware maintenance or clearinghouse costs. The truth is, there are other more effective, means to achieving a lower cost of billing. This excessive focus on individual components comes at the expense of the bottom line, and can lead to a significantly poorer financial picture and inferior laboratory accounts receivable performance. To understand more about calculating your true cost of billing, download this whitepaper, which specifically addresses how increasing revenue and cash collection can contribute significantly to lowering the Total Cost of Billing.
3. Articulating the risks associated with not making an investment
Because many laboratories and diagnostic providers are running on relatively slim profit margins, your laboratory leadership team may be tempted to defer an investment into a new RCM system. To help them see that this is a risk, it’s important to articulate the true cost of accepting and maintaining the status quo. Doing nothing has very tangible opportunity costs and business risks associated with it.
At its core, revenue cycle management is about getting payors clean, trackable claims that are submitted and reimbursed quickly. Without a modern RCM system, it is so easy for a system to become out of date. To support your position, you can leverage the messaging in the recent XIFIN White Paper “The True Cost of Preserving the Status Quo."
4. Getting prepared to answer likely questions
In addition to preparing your narrative to support your recommendation, you must also be prepared to address the likely questions from your executive team. Here are some example questions and potential responses to support you:
What are the advantages on investing in a new system?
A comprehensive, highly automated RCM system will help us be more efficient, improve our cash collection, improve our compliance, deliver better visibility and control over financial operations and key performance indicators, provide enhanced connectivity, and increase the accuracy of our financial data.
Why is our current system no longer sufficient?
Traditional billing systems lack the referential and financial integrity we need to deliver accurate, auditable information. Instead, we need a technology infrastructure with a solid financial and accounting foundation that delivers full visibility to understand the financial status of every diagnostic activity, at every stage from order submission to payment. We need the information and tools to identify and correct errors, appeal, and take action to ensure maximum reimbursement as well as deliver accurate information for reporting and negotiating contracts, as well as strategically managing the business.
What are the core capabilities we need in a new system?
A strong, cloud-based technology foundationFinancial integrityIntelligent workflow automationBusiness intelligenceExpert managed services including maintenance of data logic
Once you have your executive team bought in, the next step is to select the right RCM solution partner for your business. Look for our upcoming blog post to provide you with some key questions to ask prospective vendors.
To access critical questions to help you select the right RCM solution provider, click here.