Revenue Cycle Management(RCM:) Partnering for Success

Volume 10 Issue 6, March 14, 2023

Over the past several years, we've seen a rapid rise in the number of new healthcare revenue cycle management (RCM) companies, existing companies launching RCM divisions, and transactions involving RCM companies. All three developments are tied to the greater demand for RCM services. Healthcare providers are turning to outsourced RCM to better ensure they are paid properly for services provided, reduce costs associated with full-time staffing or expensive part-time and overtime work, and decrease the amount of work and expenses associated with recruitment, retention, and management of internal revenue cycle staff, among other factors. 

One of the most effective ways for revenue cycle management companies to remain competitive and capture more of this growing demand for their services is to take on a strategic partner. The right strategic partner can provide the resources and expertise to help RCM companies overcome their obstacles to growth and taking advantage of new growth opportunities.  

Revenue cycle management companies unsure about whether to consider taking on a strategic partner will want to determine whether they are struggling to overcome challenges standing in the way of short- and long-term growth and competitiveness. If your RCM company is experiencing any of the following challenges, speak with a healthcare M+A advisor to determine if a strategic partner should be in your future.

Low annual growth. If your growth is limited to 2-5% annually, taking on a strategic partner may be essential. This percentage of growth is likely necessary to help offset rising costs and investments required to keep your business on solid footing — and that's on top of increasing expenses associated with inflation. 

Coding shortfalls. A significant challenge facing many revenue cycle management companies is finding and hiring coders with the knowledge and experience needed to support industries served. If an RCM company is short coders or has coders who are unable to effectively deliver timely, accurate coding, this will hinder the submission of clean claims and lead to increases in denials. The results: slower or loss of reimbursement, which can quickly lead to loss of clients due to dissatisfaction with the RCM company's performance. The right strategic partner may be in a position to fill in those coding talent gaps or at least provide support with finding and training coders and then ensuring staff are kept current on ever-changing rules. 

Inadequate marketing. Marketing for new business growth is one of the biggest and most time-consuming challenges RCM companies face. A strategic partner can help create and implement efficient and effective marketing strategies that will help drive this growth. These include developing campaigns that target potential customers, creating a comprehensive website, and leveraging various social media strategies to reach more prospectives clients. 

Inability to break into new business lines. A strategic partner can provide the resources and expertise to help RCM companies make the necessary connections to establish a foothold in new sectors and offer new services. A strategic partner can help an RCM company identify sectors and potential customers worth targeting, bring in the talent required to support these sectors and provide new services, develop a plan to reach out and connect with these customers, and create a strong value proposition. 

Missing capability. Some revenue cycle management companies achieve success but then find that getting to the next level of success is proving difficult because the company is lacking a specific capability. It may be missing personnel who could support a growing need of clients or provide services to a new client base. It may be missing technology that can help improve productivity and performance. It may be relationships with providers and/or payers in a new market. Taking on a strategic partner that can instantly fill a capability gap may be the most efficient and effective way to keep an RCM company's growth momentum going in the right direction. 

Outdated technology. The high cost of software and use of old technology can both present challenges for RCM companies. A strategic partner can help with identifying the best software and technology solutions to maximize efficiency and cost savings. The right partner with a strong grasp of the technology landscape can also help with researching and understanding the latest software and technology solutions, consulting with experts to determine the best solutions for the RCM company's needs, and implementing the solutions to ensure appropriate usage and maximize value. 

Staffing difficulties. Staffing challenges — both recruitment and retention — are facing RCM companies, just like they are many other types of business. A strategic partner can help an RCM company attract qualified personnel, provide training and support, develop a comprehensive onboarding process, identify potential opportunities to consolidate roles and perform cross-training, and strengthen strategies to help with staff loyalty and retention. 

Lack of a strategic plan. Owners of RCM companies are often too busy working to support existing clients and putting out fires to develop and execute a strategic growth plan. The right strategic partner can help RCM company owners reduce the number of fires and help with business growth by providing owners with the resources and expertise they need. This includes developing a business plan, creating a budget, and implementing strategies that maximize growth. 

Finding the Right Strategic Partner for Your RCM Company

In conclusion, partnering with the right strategic partner may be crucial for your revenue cycle management company to reach its goals, remain competitive, and continue growing. Finding a strategic partner that is a strong fit for your company today and tomorrow will likely require finding another type of partner: a healthcare M+A advisor.  

Partnering with an experience M+A advisor can help you identify options for good strategic partners, vet those partners, and complete a partnership that should benefit your RCM company over the short and long term. Please reach out to me or any member of the VERTESS team if we can help you better understand whether the time is right to consider taking on a strategic partner.