Healthcare organizations increasingly rely on third-party solutions for RCM tasks

While healthcare organizations rely on native EHR functionality for certain revenue cycle management (RCM) tasks, they increasingly look to third-party solutions for others — especially as they prioritize the patient and RCM staff experiences, according to new research conducted by HFMA and FinThrive. The survey, conducted between February and March 2024, includes responses from 160 healthcare directors, CFOs, vice presidents, senior vice presidents and other C-suite executives. It sought to answer these three questions: 

1. For which front-, middle- and back-end revenue cycle functions do you use native EHR capabilities? What about for analytics capabilities? 
2. When do you leverage third-party solutions? 
3. When leveraging these solutions, do you embed them directly into native EHR workflows or maintain two separate workflows? 

Here are a few specific findings. Note that when stratifying data by specific EHR, results vary. 

• Native EHR functionality: Healthcare leaders leverage native front-end RCM functionality most frequently for patient scheduling (72%), patient registration (69%) and patient portal (51%). They leverage native mid-cycle RCM functionality most frequently for chargemaster (53%), discharge planning (41%) and charge capture analytics (40%). They leverage native back-end RCM functionality most frequently for denials management (42%), claim edits (39%) and claim status monitoring (28%). 

• Front-end third-party RCM solutions: Healthcare leaders leverage third-party front-end RCM solutions most frequently for patient eligibility and benefits verification (63%), prior authorization (39%) and appointment reminders (38%).  

“Leveraging third-party solutions has always been necessary because EHR capabilities vary so much,” said Jeff Becker, MBA, vice president of portfolio marketing at FinThrive. “However, what’s interesting is that we’re in an era of hyper mergers and acquisitions within the RCM category to build platforms so buyers don’t need so many vendors to support the revenue cycle,” he added. “In the past, it wouldn’t have been uncommon for hospitals to run 20 or more third-party solutions to support the revenue cycle team. Now there is a collective demand to bring that number down. It’s a lot of contracts, partnerships and data integration to manage. Healthcare RCM is in the throes of a true digital transformation in its classical sense.”  

Improving the patient experience 

Leveraging third-party RCM solutions and RCM platforms comes against the backdrop of more concerted efforts to improve patient engagement and satisfaction, said Becker. 

“Providers are more focused on bringing in a world-class experience for patients and growing their business by winning patient loyalty,” he added. “For example, last year, providers may have leveraged patient-facing capabilities native in their EHR. This year, they’re bringing in third-party solutions for patient payments, self-scheduling and appointment confirmation with current wait times. They want to improve the patient experience through high-end experiential differentiators.” 

RCM platforms that include diverse RCM solutions play an important role in helping healthcare organizations achieve these objectives, explained Becker. “For example, your contract management solution is the heart of your patient estimation solution,” he said. “Five years ago, the back-office director would pick a contract management solution. The front office manager would pick a patient estimation solution. The estimates wouldn’t be very accurate, and the patient experience would suffer. But what we’re starting to see is the value in consolidating and unifying all workflows. As you bring teams together, you drive up patient satisfaction scores.”   

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Solution utilization rate: Front-end third party RCM solutions

Most survey respondents (63%) indicated they use front-end third-party RCM solutions to verify patient eligibility and benefits.

_{Source: HFMA-FinThrive Survey, 2024}

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Solution utilization rate: Mid-cycle third party RCM solutions

Just more than half of survey respondents (51%) indicate they use mid-cycle third-party RCM solutions for billing and coding reference tools.

_{Source: HFMA-FinThrive Survey, 2024}

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Solution utilization rate: Back-end third-party RCM solutions

Survey respondents indicated they use back-end third-party RCM solutions to resolve these top three issues: claims clearing house, bad debt collection and paper patient statements.

_{Source: HFMA-FinThrive Survey, 2024}

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Promoting end-user satisfaction 

In the spirit of enhanced productivity, accuracy and retention, healthcare organizations are also prioritizing the end- 
user experience, said Becker. He said financial leaders should ask detailed questions about the level of integration third-party vendors can deliver with their core EHR. 

“End users shouldn’t have to log into systems multiple times or key information multiple times,” Becker said. “We want to make sure end users have the best experience possible,” he added. “Solutions and platforms that integrate into native EHR workflows are ideal.”  

Creating a revenue cycle-focused analytics strategy 

In a data-driven environment, healthcare leaders increasingly look at third-party solutions to help them leverage their data in meaningful ways. They use these solutions most frequently for denial analytics (24%), claims analytics (23%) and coding analytics (23%), according to the recent HFMA-FinThrive survey.   

The challenge?   

“Bolt-on solutions live in silos, and it’s very labor intensive to pull all of that together in one data environment where you can really see your end-to-end analytics program come to life,” said Becker. “Most organizations don’t have this in place today,” he added. “There are emerging capabilities to bring revenue cycle focused data warehouses and data lakes to market that will bring all the data from all rev cycle solutions and EHR capabilities into one environment.” 

Anticipating RCM innovation 

RCM vendors will continue to evolve commensurate with industry feedback. The top area ripe for improvement? Prior authorizations. Twenty-eight healthcare leaders who said they were highly dissatisfied with front-end revenue cycle technologies also said their prior authorization solution is their biggest source of dissatisfaction, according to the HFMA-FinThrive survey.  

“Prior authorization is the number one administrative burden on the revenue cycle,” said Becker. “Front office staff are on the phone, on hold, working with payers trying to get authorizations approved. It’s a lot of paperwork. It’s not always clear when a prior auth is needed. There’s a lot of problems to unpack in this space. It’s an unsolved problem in the market, and it requires direct innovation.” 

Denial management is another area to watch. One quarter (25%) of healthcare leaders who are highly dissatisfied with back-end revenue cycle technologies said their denial management solution is their biggest source of dissatisfaction, according to the HFMA-FinThrive survey.  

“A lot of innovation is pouring into denial management,” said Becker. “There will be solutions that predict denials before you submit your bill as well as solutions that use machine learning to perform root cause analysis across all denials so you can create bulk appeal workflows. These are all emerging capabilities that will have an impact on the revenue cycle.” 

The solutions with the highest dissatisfaction ratings are end-to-end RCM analytics (31%), underpayment recovery (30%), prior authorization (28%), contract modeling (28%) and computer assisted physician documentation (25%). 

Looking ahead 

As healthcare leaders examine their RCM technology strategy, Becker said it’s important to ask these questions: 

• Where are the biggest RCM gaps in the organization? 
• What RCM technology vendors can fill these gaps? Can a single vendor manage a large subset of the gaps? 
• Does the RCM vendor integrate solutions into native EHR workflows? If not, what is the vendor’s long-term road map for integration? 
• What’s the value in moving to a third-party RCM solution? Can the vendor have an articulate conversation about ROI? 
• How does the RCM vendor promote cybersecurity? “Talking about backup and disaster recovery and overall cybersecurity posture has never been more obvious and necessary coming out of the largest cyberattack in healthcare’s history,” said Becker.  

The most important takeaway?  

“Perform your due diligence,” said Becker. “Ask questions so you know what the RCM technology will and won’t do. It’s ok to focus on plugging holes in your revenue cycle, but you also need to establish strategic partnerships with key vendors.”   

About FinThrive

FinThrive is advancing the healthcare economy. Our 1,600-plus colleagues rethink revenue management to pave the way for a healthcare system that ensures every transaction and patient experience is addressed holistically. We’re making breakthroughs in technology—developing award-winning revenue management solutions that adapt with healthcare professionals, freeing providers and payers from complexity and inefficiency, so they can focus on doing their best work. Our end-to-end revenue management platform delivers a smarter, smoother revenue experience that increases revenue, reduces costs, expands cash collections, and ensures regulatory compliance. We’ve delivered over $10 billion in net revenue and cash to more than 3,245 customers worldwide. When healthcare finance becomes effortless, the boundaries of what’s possible in healthcare expand. For more information on our new vision for healthcare revenue management, visit finthrive.com. 

_{This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.}