Rob Carrera is president, Kim Woodruff is VP of corporate finance & compliance, Kelli McMahan is VP of operations and Carol Ciluffo is VP of revenue cycle management for Pinnacle III.
Q: What are you seeing as some of the driving factors pushing organizations to consider outsourcing parts of their business operations?
A: The continued economic downturn and declines in provider and facility reimbursement are forcing organizations to do more with less, says Ms. Woodruff. "There's also a lack of qualified personnel and the inability to absorb/understand and sustain compliance with the overwhelming number of regulatory changes," she says.
Other challenges facing ASCs which are driving them to consider outsourcing include finding the right personnel; identifying the right number of staff members with the knowledge, experience and expertise required to successfully perform business office functions; retaining qualified personnel and maintaining uninterrupted work flow when in-house employees are ill or on vacation.
"Some geographic locations also have an applicant pool that is small or non-existent," says Mr. Carrera.
Q: What's coming down the pike that may encourage more organizations to look to outsourcing as a feasible option?
A: ASCs can expect to see continual changes in coding, billing and collections regulations, says Mr. Carrera. Changes resulting from healthcare reform, the continued increase in the cost of benefits leading to a desire to limit the number of in-house employees and the need to reduce the organization's liability exposure are all factors which may encourage surgery centers to consider outsourcing.
"As regulatory demands continue to rise and internal business office staff are either ill-equipped or aren't allotted the time necessary to deal with the myriad of issues that face them, they end up having to be a jack of all trades but master of none," says Ms. Woodruff. "Administrators need access to expertise — an outsourcing company they can trust to become an extension of their existing team and look out for the best interests of their organization. Economies of scale have to be employed to sustain a viable business model in today's challenging environment.”
Q: How would an organization know if outsourcing is worth considering?
A: "They would need to know the true costs related to the operations they are considering outsourcing," Ms. McMahan says. "The organization would most likely need to undergo an audit to determine if money is being left on the table and how they perform in comparison to similar organizations."
Such an audit would assess current practices, policies, procedures and processes against industry benchmarks to determine areas where the organization excels and where it requires assistance in order to more efficiently and/or effectively manage components of the organization's revenue cycle. An analysis might also look at the cost of current operations compared to the cost of outsourcing and weigh those costs against the benefits of same.
"Cost versus value needs to be considered," Mr. Carrera says. "We never say outsourcing will necessarily be cheaper in dollars spent - the value and quality of the services is where the comparison should take place."
Q: When is outsourcing not worth considering? Would an efficiently run organization want to consider outsourcing?
A: Outsourcing is not right for everyone, says Ms. Ciluffo. It may not be a good fit for organizations that are well-run with clean A/R and low overhead, or when an operation is very small (i.e., one practitioner, one specialty, low volume, few third-party payors), she adds. It might also not make sense when an organization is large enough to sustain an expansive internal business office staff specializing in defined components of the revenue cycle process (i.e., multiple departments), says Ms. Woodruff.
However, even an efficiently run surgery center may want to explore the potential benefits of outsourcing. "An efficiently run organization may be very insular, not receiving new ideas or information from the outside, and, therefore, not growing in knowledge," says Mr. Carrera. "After all, standing still is going backward." Ms. Ciluffo says organizations facing a potential staff issue may want to consider outsourcing as a means to maintain efficiency.
If an organization is going to outsource, the surgery center will want to do its due diligence and perform a thorough review of any company it is considering partnering with, says Ms. Woodruff. "If you outsource to a company that doesn't understand or honor your organization's values, you are risking loss of valued clientele," she cautions. "Patients need compassionate human contact as part of their overall treatment experience. They want to feel cared for throughout the entire process — from initial appointment setting, registration and financial obligation discussions to final payment of their bill."
Q: Is outsourcing a viable option if an organization loses a critical member of its business staff and is looking for a temporary stop-gap while a search for a replacement team member is performed?
A: This approach will not typically work because, from the outsourcing companies' perspective, there is too much time and energy involved to set up work flows on a temporary basis, says Ms. Ciluffo. With the costs that a high-quality outsourcing group would incur bringing on a new client, most would opt not to take on such a short-term project, Mr. Carrera adds, and many outsourcing companies are hesitant to sign contracts for less than 1-2 years because of these upfront transitional costs.
If a surgery center is considering operational changes as a result of the employee's departure, then outsourcing would become a viable option, says Ms. Woodruff. "Loss of a critical business office member, such as someone responsible for performing only one component of the process (i.e., coding) — can present an opportunity to rework the organization's existing model — moving it forward in positive ways especially, when a 'we've always done it that way' mentality is firmly entrenched."
Q: If an organization wanted to outsource as much of its business operation as possible, what's the minimum amount of staffing it would need to maintain in-house? What work would this staffing still need to tackle in-house?
A: The number of in-house business operations FTEs will vary based on the volume and type of services being performed; however, Ms. Ciluffo notes essential in-house staffing would need to include a dedicated contact person and competent front desk personnel responsible for accurate data entry, upfront collections, communicating changes in insurance information, providing medical records assistance and documenting deposits. "An established workflow for communication is essential for effective in-house/outsourcing collaboration," she adds.
Q: What are some best practices outsourcing company's follow to provide effective outsourcing services that organizations can learn from and emulate?
A: "Establish a continuous improvement program for business office operations similar to what is in place on the clinical side of the business equation," recommends Ms. Carrera. "Obtain an external view of operations on a regular basis to avoid developing inefficient ruts."
Ms. Woodruff suggests ASCs also focus on processes and performance improvement, ensure staff skill sets match up well with task assignments, cross-train and encourage open discussion and collaboration between staff members.
Q: What are some steps an organization can take to help maximize the benefits of outsourcing and improve the outsourcing process?
A: Here are some of the key steps suggested by the Pinnacle III team:
- Document goals for the outsourcing company.
- Institute regular communication with the outsourcing company to assess progress on established goals. Ensure the flow of information to the outsourcing company is consistent, timely (daily), and smooth.
- Determine what types of workflow technology works best for each individual member of the team (i.e., is e-mail or phone contact the preferred method of communication).
- Employ the use of web meetings and conference calls to work through troubling issues and provide ongoing educational opportunities for in-house and outsourcing personnel.
- Don't pass the buck. The work performed in-house combined with the work performed by the outsourcing group reflects on the organization as a whole. The organization cannot afford to adopt an "us versus them" stance.
- Assess what portions of the process already in place in-house can be accessed/utilized by the outsourcing company to create seamless hand-offs of essential information.
- Understand that a provider of excellent service is entitled to earn a profit from providing that service; it should be a win-win proposition for both organizations.
Learn more about Pinnacle III.
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