Outsourced Revenue Cycle Operations Experience Higher Denial Rates

Hospitals that outsource their revenue cycle operations experience higher denial rates and higher final denial write-offs than hospitals with in-house revenue cycle departments, according to recent research from Crowe, LLP. Accounts that are initially denied require intervention or correction to secure full payment. When these denied accounts cannot be corrected sufficiently, they become final denial write-offs.

This difference can make a significant impact. An approximate 1 percent difference in initial denial rates between outsourced and insourced revenue cycle operations represents $22.7 million in revenue for a 400-bed hospital.

The report notes that although financial performance is an important element in deciding whether to fully outsource revenue cycle operations, other criteria exist, including the following benefits from outsourcing:

• Lower overall cost structures
• Access to the latest technology
• Centralized talent pools
• The ability to scale operations, such as adding facilities or other entities

Comparison of Denial Rates for Insourced and Outsourced Revenue Cycle Operations