Questions to Consider Before Choosing an RCM Vendor | Pharmbills
With a perfect storm of workforce shortages, increasing operating costs, legislative changes, and shifts in consumer behavior, healthcare providers are experiencing increased financial pressure from several different angles.
The big challenge for providers is that many of the expenses that have increased since the pandemic - such as labor costs, hospital supplies, and purchased service costs - are not expected to reduce in price any time soon. Therefore, the only option available for providers to remain viable is to increase efficiencies in other areas.
One of the most effective ways to improve efficiency in healthcare systems is to focus on the revenue cycle. This is typically done through the use of a revenue cycle management (RCM) vendor, who partners with a provider to optimize tasks such as submitting insurance claims, billing and accounts, and analyzing financial performance.
In light of the increasing demand for RCM services, the industry has grown rapidly in recent years. This has improved choice of providers. However, with the large number of new vendors entering the market recently, it is more important than ever for providers to conduct due diligence before entering into a working arrangement.
To help you choose the right RCM partner, we’ve compiled a list of 16 revenue cycle management interview questions to ask vendors to see if they are a good fit to meet your business needs.
If you have any questions after reading the article or want to discuss the range of healthcare-specific RCM and business process outsourcing (BPO) solutions provided by Pharmbills, please contact us today.
Understanding RCM Vendors
Revenue cycle management can be defined as, “the system in the hospital [or clinic/outpatient service] that manages billable events through a single healthcare process and generates revenue as a result.”
Therefore, an RCM vendor is a person or organization who assists with any aspect of this system. As managing finances in healthcare increasingly relies on technology, the term RCM vendor may also refer to a software provider.
RCM Vendor Roles
The exact role will vary according to the vendor and organization being assisted. But common tasks undertaken by RCM vendors in healthcare financial management include:
- Intake and prior authorizations
- Medical coding and billing
- Submitting insurance claims
- Generating invoices for patients
- Managing claim denials
- Charge capture for services delivered
- Handling accounts
- Analyzing and reporting on financial data
Now that we’ve explained what RCM is, let's look at how you might prepare the ideal revenue cycle management questions before you meet with an RCM vendor.
Pre-Interview Preparation
Even though healthcare financial management has common themes across different practice settings, each organization will have unique needs and goals that must be addressed.
To help with RCM vendor selection, it is best to craft revenue cycle manager interview questions that are tailored to your exact needs.
Some of the specific financial pain points your organization might need help with include:
- Higher than average rates of claim denials
- Low reimbursement for services delivered
- Non-payment of patient bills
- Lack of visibility of financial data
- Challenges with budgeting and financial forecasting
As you might expect, achieving RCM performance improvement in any of these areas requires a targeted approach. This means it is essential to craft RCM interview questions in a way that allows you to assess a vendor’s experience, strengths, and weaknesses in each area.
Before approaching an RCM vendor, we recommend spending time getting clear on your RCM needs and organizational goals. After doing this, choosing an RCM provider becomes a lot easier, as you can find the vendor with the right mix of skills and RCM technology solutions to improve the financial situation of your healthcare practice.
16 Key Questions to Ask Potential RCM Vendors
Once you have clarified the financial priorities for your organization, it’s time to craft some revenue cycle interview questions to ask potential vendors.
To help you out with this step of the process, we’ve created a list of 16 key revenue cycle management interview questions and answers. All 16 questions are listed below, sorted by category topic.
Feel free to adapt and adjust these for your own needs. And of course, you might like to develop your own questions based on your organization’s unique needs.
Experience and Expertise
As we mentioned earlier, the financial challenges the healthcare sector has faced in recent years created immense demand for effective RCM strategies.
This has led to a significant amount of growth in the sector. Plus, with increased competition, many providers have improved the quality and breadth of their service offerings.
However, there is no denying that some RCM providers (especially those offering software-only solutions) are attempting to operate in the market without a solid background in healthcare and hospital budgeting and finance.
The questions below are good RCM vendor evaluation criteria for healthcare providers of any type.
- What experience does your company have in the healthcare sector?
While there is some degree of overlap in the software and activities undertaken with electronic health records, accounting and financial management, and RCM activities, they are not similar enough to be interchangeable.
Where possible, we would always recommend going with a company that has a track record of delivering RCM services to clients in the healthcare sector. Healthcare compliance and RCM practices are constantly evolving, so you will want a partner who stays up to date with revenue cycle management trends, like Pharmbills.
- Can you provide case studies or examples of success with clients similar to us?
Healthcare-specific knowledge and experience are great. However, what really matters when it comes to finances is outcomes.
When you ask revenue cycle director interview questions about previous success stories, pay close attention to whether the vendor gives you hard facts about the key financial outcomes they have achieved for previous clients (eg, figures on increased revenue, reduced claims denials, operational efficiencies, etc).
If you get vague answers to this question, it might be wise to consider another vendor who instills more confidence in their ability to help you meet your goals.
Technology and Integration
In an effort to improve efficiency and quality of care, most administrative tasks in healthcare are now heavily reliant on software and technology.
The staff in your healthcare organization likely already use specialized software on a daily basis. Therefore, it’s important to consider how an RCM vendor’s systems will integrate with yours.
This is an important point. Because when not managed well, any efficiencies gained through cost-effective RCM solutions can be lost if administration staff have difficulty using new programs. Ensuring patient data security in RCM platforms is also vital, as mistakes in this area can be incredibly costly.
Try these questions to get an idea of technology and integration issues with a new RCM vendor.
- What technology platforms do you use, and how do they integrate with existing systems?
Make sure you have details on hand about the existing systems in your organization when you ask this question.
Ideally, the RCM vendor will be familiar with your systems and have already worked with them. Or, if not, they should be able to explain to you how they can get their software and technical tools to integrate with your organizational workflow.
- How does your technology support compliance with regulations such as HIPAA?
For healthcare providers in the US, this is a straightforward, non-negotiable question. Any RCM vendor working with US healthcare organizations should be able to clearly explain how their technology is compliant with HIPAA.
Outside of HIPAA, you might like to ask about general security features. Plus, how the RCM provider handles any other relevant regulatory requirements surrounding insurance, reporting, and collection and sharing of data.
Financial Health Checks
Too often, healthcare organizations don’t pay adequate attention to RCM until a state of financial panic is reached.
Whether this is the reason for you contacting an RCM vendor or not, the important thing is to get the financial health of your organization on track and keep it that way.
The best way to achieve this is through regular financial health checks. The questions below are designed to help you gauge whether an RCM vendor pays adequate attention to identifying and addressing financial issues before they become a problem.
- What strategies do you implement for improving revenue cycle performance?
When done right, effective RCM strategies should deliver a positive return on investment (ROI).
Asking a potential vendor about improving RCM performance helps you judge whether they see their role as maintaining the status quo and just doing the basics, or proactively taking steps to improve your organization’s cash flow and financial situation.
- How do you handle denied claims and what is your success rate in overturning them?
Claims denials can be a significant drain on revenue for healthcare providers. Because they are largely due to human error when submitting an insurance claim, the onus generally lies on the provider to fix the error if they want to get paid.
A small percentage of denied claims is inevitable. However, upon querying and following up with the required information, a good RCM vendor should be able to demonstrate a good success rate in overturning denied claims.
Performance Metrics and Reporting
It is encouraging when you receive good answers to your revenue cycle management interview questions. However, this alone isn’t enough to ensure good performance from your RCM vendor on an ongoing basis.
To measure performance, you need to be clear on the key metrics of success your RCM provider is aiming for. And, just as important, you should ensure these are relevant to your organizational goals.
The questions below will help clarify these issues.
- What key performance indicators (KPIs) do you monitor, and how frequently do you report on these?
It’s fine to verbally explore the KPIs a vendor uses verbally to begin with, using revenue cycle manager interview questions like the one above. But, before you sign any contract, ensure you have all of these in writing.
The list of KPIs specified in an RCM vendor agreement (such as cost to collect, denial rate, clean claim rate, net collection rate, etc) are how you can evaluate the performance of your provider after you begin work together. They are also the main mechanism by which you can hold them to account in the event of substandard performance, so please don’t skip this question.
- Can you customize reports to meet our specific needs?
All healthcare organizations are different. So even after you get the list of KPIs and reporting processes from your vendor, you might need to customize them a little.
The main customizations to consider are reporting frequency (eg, monthly, quarterly, annually) and the specific KPIs reported on. Get an idea of whether your vendor can meet specific requests and any additional costs for doing so.
Communication and Support
Healthcare finance can be incredibly complicated. So, even though you want your RCM partner to utilize the latest technology to ensure accuracy and efficiency, it’s important to be able to get support from a human being when you need it.
As a general rule, it shouldn’t feel like you are dealing with a call center. The experience asking your RCM interview questions should give you an idea of how a potential provider handles communication support. But, it also is useful to ask targeted questions on this topic, like the ones below.
- What is your process for handling queries and issues?
The main thing that matters here is that the vendor's processes align with your preferences.
For example, if you hate talking over the phone, you will want to look for email or instant message support. Or, if the speed of response is more important than a consistent support person, access to a range of customer support representatives will be more important than having one dedicated contact person.
- How do you ensure continuous communication and updates to your clients?
While being able to get timely support when you need it is important, a good schedule of regular communication and updates can reduce the time burden on your end when things are running well.
The goal here is to get automatic updates regularly that you can check as required. Plus, it’s a good idea to have a safeguarding mechanism by which urgent matters requiring your attention are sent through promptly and followed up if a response is not received.
Cost and Investment
As we mentioned already, RCM services should offer a positive ROI. Because each healthcare organization is operating on different margins, this factor must be individually assessed on a case-by-case basis.
At Pharmbills, we can generate superior ROI on our services through the use of an outsourcing model that enables us to deploy highly skilled off-site staff at a fraction of the cost of local talent. Through the use of our intelligent staff augmentation solutions, healthcare providers can benefit from access to the skills and resources of a full RCM team, without any of the overheads involved in employing in-house staff.
Try using revenue cycle management interview questions like these to see if a vendor has the ability to generate positive ROI for your organization.
- What is your pricing model, and what does it include?
The most common pricing model is a tiered monthly cost, depending on the products and services being utilized by the customer. Although, a small number of RCM vendors do offer pay-per-use or charge a percentage share of collections.
The main thing to pay attention to with the answer to this RCM interview question is the inclusions. Once you know what’s included in the price, we recommend basing RCM vendor selection on which company is going to offer you the highest ROI.
- Are there any long-term contracts or commitments required?
If everything goes well after choosing an RCM provider, you should see good improvement in healthcare financial management. However, things don’t always go according to plan, so there are times you might need to change vendors.
Asking about contracts and commitments ensures that if the provider you have chosen doesn’t perform as expected, you can end your arrangement without any (or only minimal) financial penalty.
Security and Compliance
There are important security and compliance issues that all RCM technology solutions for healthcare should comply with.
These can vary by organization, but the main considerations are:
- Patient data security and HIPAA compliance
- Adequate record-keeping for insurance claims and audits
- Storage of electronic patient records in line with local/national regulations
- Encryption and security settings to protect against data breaches
The revenue cycle manager interview questions below will help you assess how a vendor approaches these issues.
- How do you ensure the security of patient data and compliance with healthcare regulations?
This is a crucial part of healthcare compliance and RCM. So please, ensure the vendor you are interviewing can give a thorough answer to this question.
While HIPAA compliance is the obvious thing to look out for, also take note of how they discuss general patient confidentiality and any regulations that may be specific to your area of practice.
- What are your policies regarding data breaches or security incidents?
Because patient data security in RCM involves financial details, this area is an attractive target for malicious actors looking to gain access to confidential information.
You will want to get an idea of how the RCM vendor you are interviewing handles data security on a technical level. However, it’s just as important to know what their policies and procedures are after a security incident has been identified.
Partnership and Collaboration
Cost-effective RCM solutions that deliver real value always require an effective partnership between vendor and healthcare provider.
Hopefully, you will get a sense from your revenue cycle interview questions about how the vendor handles partnership and collaboration. But it is always a good idea to ask direct questions on this topic just to be sure.
To gain more insight into how your potential vendor facilitates effective RCM strategies through partnership and collaboration, try the two questions below.
- How do you view the client-vendor relationship?
While you are discussing a business arrangement, the greatest RCM performance improvement tends to come from partnerships, rather than transactional arrangements.
The key thing to look out for the answer to this question is that the vendor seems invested in your organization’s success. Sometimes they might say something specific that indicates this is the case. Although, more often than not, it will be a feeling you get from the interaction during the interview.
- Can you describe a situation where you had to adapt to a client’s changing needs?
The healthcare regulatory environment changes fast and often. Also, while you currently operate in one area, you may want to expand your business to other niches in healthcare.
Asking how the vendor adapts to changing needs is a good RCM vendor evaluation criteria because it helps you understand if you are talking to a partner who can grow as your needs develop.
Evaluating the Answers
Under each of the questions above we have provided some specific points that can help with RCM vendor selection.
In terms of general ways to assess the responses from RCM vendors, here are our top tips:
- Make sure you get a clear answer for each question. Even an, “I’ll have to get back to you on that,” is better than a vendor who talks in circles and tries to avoid hard questions
- Request written specifics on the most important revenue cycle management interview questions. This is often around things like costs, contract commitments, and KPIs
- Trust your instincts. Even if the vendor answers all your questions well, if you don’t feel comfortable interacting with them or confident that they can meet your needs, it probably isn’t a good fit.
If you need tips for evaluating the answers to a specific question, you might like to revisit the overview we provided on each topic.
Red Flags During Interviews
We’ve already mentioned a few issues of concern to look out for throughout this article.
To recap, here are the top 7 red flags you should keep an eye out for when conducting a revenue cycle management interview questions and answers session
- Saying “You don’t need to worry about that”
- Refusing to provide written information
- Giving vague details about KPIs
- Not committing to a firm cost
- Lengthy contract commitments
- No policy for dealing with security incidents
- No (or limited) specific experience in healthcare
If you come across any of these red flags during your interview, it is probably best to consider other RCM vendors.
Making Your Decision
Once you have all your information, it’s time to make a decision.
First of all, we recommend waiting at least a couple of days after your interview session before deciding to go ahead with a vendor. It is also best practice to interview at least 2 or 3 providers, so you have something to compare the answers against.
Perhaps the easiest way to weigh the pros and cons of each vendor is to create a document with the vendor names, questions, and answers. Then, you and your team can sit down together to evaluate the answers.
Trust and Alignment
Overall, the main things you should be looking for in an RCM vendor are trust and alignment.
Trust is essential because you are giving an external provider access to financial data for your business and for your patients.
Alignment matters because the best outcomes happen when a healthcare organization and their RCM provider are working toward the same goals.
Conclusion
Running a successful business in the healthcare sector has become increasingly difficult since the pandemic.
Issues like workforce shortages, changing regulatory requirements, decreasing reimbursement, and rising cost of labor and supplies are not going to change anytime soon. Therefore, the best strategy for providers looking to get ahead is to look for opportunities for operational efficiencies that can improve margins and profitability.
One low cost, high yield way to do this is through RCM services, However, with the large number of providers in the market today, choosing the right vendor for your needs can be a challenge.
Fortunately, with the right set of revenue cycle management interview questions (like the ones we covered in this article), you can make a thorough assessment of which RCM vendor is best placed to help your organization meet its goals.
Remember, trusting the financial health of your practice to an external agency is an important decision. So please, don’t rush the interview and assessment process. Give choosing an RCM provider the due diligence and strategic consideration it deserves.
At Pharmbills, we provide a suite of healthcare-specific RCM and business process outsourcing services. To find out how we can help your organization meet its financial goals, please contact us today.
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