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Using EHRs or Enterprise Systems for Revenue Cycle Management of Ancillary and Ambulatory Services? Your Revenue is Being Negatively Impacted

Electronic health record (EHR), enterprise systems, and other practice management software fail to support the unique RCM needs of ancillary and ambulatory services. Lacking the appropriate RCM tools and solutions prohibits these valuable services from having visibility into their RCM processes and being fully reimbursed for the services they provide. As an example, MercyOne Des Moines opted to outsource its revenue cycle management, and that translated into a 15% increase in cash collections.

The time is now to evaluate and challenge the current state of RCM for your ancillary and ambulatory services, such as radiology and imaging, telemedicine, and remote patient monitoring. An evaluation should include a thorough assessment of the systems and services supporting the RCM process ― to ensure your ancillary and ambulatory services can maximize their financial contribution to the hospital and health system. 

Key Questions

To confirm these claims are getting the proper attention and level of visibility needed to increase your revenue and cash flow, start by asking your revenue cycle team the following key questions about write-offs:

  • Are the ancillary and ambulatory services claims subject to automated write-offs based on a dollar amount threshold set in the EHR system?
  • Are automated write-offs of these claims categorized as bad debt since no effort to collect has been attempted?
  • What percentage and dollar amount of these claims end up automatically written off?
  • Can your revenue cycle system deliver edits from the insurance carrier to the ordering system in real-time?

EHR systems and the associated RCM staff are often instructed to concentrate on high dollar claims. Frequently, resource constraints within the health system lead to a policy of automatic write-off of any claim below a certain threshold that requires additional effort. If your ancillary and ambulatory services claims are below the threshold and have missing or invalid information or are denied, they are NOT being worked. No one is making an effort to collect on your behalf, and instead, an automated write-off occurs. 

These write-offs can make up a substantial portion of your ancillary and ambulatory services business. Automated write-offs paint an inaccurate view of your team’s contribution to the larger health system. Further muddying the financial picture, it is common for hospitals and health systems to incorrectly categorize the write-offs as revenue adjustments rather than bad debt, thereby implying the write-offs were not collectible.

To run and grow a profitable ancillary and ambulatory services business, you need easy access to specific data required both to maximize reimbursement and to gather insights into the health and wellness of your business. Many EHR systems are unable to provide quick or accurate answers to the questions posed above, as well as any ancillary and ambulatory services-specific key performance indicators (KPIs). You need to understand the profitability of specific services and clients to ensure your growth is focused in the proper areas. 

Often a health system wants to use an EHR system because the finance team, for example, thinks it will be more cost-effective. A purpose-built RCM solution and service more than pays for itself by increasing cash collections while reducing labor costs, write-offs, and compliance risk.

Key Benefits

In addition to the monetary benefits, a purpose-built RCM solution helps the ancillary and ambulatory services teams:

  • Maximize clean claim rates by improving front end data quality
  • Deliver better patient and client experience through integrated portals and other customer support capabilities
  • Harness the power of diagnostic and financial based business intelligence and analytics for data driven decision making

Purpose-built RCM systems deliver the information needed, often in real time. Analytics help organizations leverage data assets to understand how the ancillary and ambulatory services organization is operating, e.g., by payor, by service, etc. Purpose-built RCM systems provide this insight as well as using analytics to improve business process automation, forecast accuracy, and pricing analysis.

Ancillary and ambulatory services also have specific business intelligence (BI) needs that cannot be met by EHR systems, such as benchmarking to enable tracking and comparing financial and operational performance to industry peer groups and performance against ancillary and ambulatory services-specific KPIs to understand trends and drill-down capabilities to view details.


To learn more about how service-specific systems and outsourcing can improve financial performance, enhance EHRs, and deliver vital information and capabilities to the hospital and health system at large, download this white paper, "Making a Case for Purpose-Built RCM: How Actionable Data and Lab Visibility Benefits Health Systems."

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Published by XIFIN
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