When the Time is Right to Outsource Emergency Department Services

Today’s independent emergency groups are tasked with more challenges than ever. Increasing operational costs, decreasing reimbursements, and fewer opportunities for expanding revenue sources are just a few of the reasons independent democratic groups are failing or consolidating into larger staffing companies.

The reality is healthcare is no longer just taking care of patient health, it’s a cost-driven initiative and more focus is being placed on efficiency and squeezing the most out of every dollar.

Reimbursements, arguably, are the driver for all financial decisions. Let’s take a look at the consideration and implementation of outsourced emergency department services so you can decide if they are right for you.

Outsourcing Is Not The Same As Offshoring

Before I dive into some of the considerations for outsourcing your emergency department services, I want to make an important distinction regarding outsourcing — contracting work to an external, specialized organization — and offshoring — getting work performed in a different country.

Offshoring does have its benefits in certain industries, however, emergency medicine isn’t one of them. On the surface, offshoring companies have very competitive prices but their advantage seems to end there. In offshored medical billing and coding for example, there seems to be a strong correlation between improper evaluation and management (E/M) claims being paid in error than other Part B services.

This has resulted in the Department of Health and Human Services publishing recommendations that include the following:

  • Physicians being better educated on coding and documentation requirements
  • Erroneous claims for E/M services followed up on
  • Physician groups encouraged to have contractors review E/M services billed for by high-coding physicians

This is not to say that poor coding can’t happen by American contracted companies, but it does bring to mind the cliche “you get what you pay for.” DuvaSawko, an American company that specializes in ED revenue cycle management, collects 30% more for their clients on average. This is one example of when outsourcing ED services works, and I’ll detail other areas below that your practice may want to consider.

Outsourcing IT Services (ICD-10 & Billing & Coding Services)

When The Time Is Right To Outsource Emergency Department Services

When considering ways to improve your practice’s bottom line, you’ll of course want to start with potential outsourcing partners that can help increase your revenues.

These services are heavily versed in information technology (IT) and the effective collection and analytical interpretation of data. The other benefit of bringing in a billing and coding partner is specialization.

New, confusing codes within the ICD-10 can create short and long-term revenue issues. Over and under-coding have been represented in the media frequently, with Medicare filing lawsuits causing ED’s to take a harder look at coding internally. These processes can be outsourced to companies like DuvaSawko, or your practice can continue to handle billing and coding in-house, but get outside help (also offered by DuvaSawko) to audit the efficiency, compliance and productivity of your processes.

The trend, as indicated in the top 5 graph, seems to relate to expertise as well as cost savings.

Outsourcing Patient Care Services

According to some experts, there will be a rise in the outsourcing of clinical and patient care services. The main patient care services to be outsourced include those that are essential to acute-care hospitals but not dependent on long-term patient relationships.

These services include: anesthesia, emergency department, dialysis services, diagnostic imaging and hospitalist staffing.

When The Time Is Right To Outsource Emergency Department Services

Increasingly, the expertise of the vendor, cost savings, and request by physicians are the main reasons to outsource patient care services.

 
When The Time Is Right To Outsource Emergency Department Services

The Positives Of ED Outsourcing As It Relates To Financial Performance

Your practice can look to save money in its support functions like laundry or food services, or it can look for more sophisticated outsource partners that improve revenue more long-term.

Outsourcing the revenue cycle process can lead to a centralized physician billing, coding and collections system with on-the-spot auditing and analytics to help visualize and plan for future growth. Further to this, when an outside vendor is brought on, the profits are redeemed by the practice while the vendor expertise and cost savings are still in plain sight.

The benefits of outsourcing patient care services also provide cost savings and allows hospitals to offer a full-suite of services without having to employ specialized physicians. This seems to be the more common method of outsourcing at 57%, whereas just one-third of hospitals surveyed mentioned taking advantage of IT services.

The Risks And Challenges Of Outsourcing

There is a perceived loss of control when entrusting outside vendors to handle critical processes within a hospital. These challenges can be addressed with a proper request for proposal (RFP) that asks the right questions before the partnership begins.

RelatedEmergency Medicine Billing – 5 Things To Consider When Soliciting An RFP

With all partnerships, the way the contract is executed is of utmost importance. Clearly, executives should identify metrics for which they are seeking to improve as well as determine the solutions that provide for the most cost effective patient care. In this capacity, there are three types of patient care agreements, each with their pros and cons:

3 types of patient care agreements

  • Joint-venture agreements
    Profits are split amongst the venture partners
  • Contractual agreements
    Vendor assumes the risks and rewards of providing a service
  • Outside vendor agreements
    Profits are retained entirely by hospital
When The Time Is Right To Outsource Emergency Department Services

Should I Insource Or Outsource?

In the aforementioned survey results there is a strong indication that outsourcing is a good option for practices seeking an experienced vendor or looking for ways to save on costs. These survey results are mimicked across outsourced IT as well as patient care services.

With more complex cases and coding requirements challenging profits, perhaps now is the time to consider outsourcing these areas so that your main focus can be patient care.

To learn more about revenue cycle management services for emergency practices, contact DuvaSawko today.

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