Changing reimbursement models and declining margins have fueled demand for consultants as hospitals and physician practices upgrade or swap out their revenue cycle management technology, according to an announcement about recent research from Black Book.
In Black Book's most recent survey, hospital executives said they expect their expenses for RCM consulting to double by 2015 as they seek help dealing with payment reforms, accountable care participation, ICD-10 coding challenges and problem collections. It previously valued the hospital RCM software and services industry at $2.5 billion.
However, in a previous survey, Black Book also found that roughly two-thirds of hospitals that in 2012 predicted they would replace their core RCM solution in 24 months have yet to initiate a plan to do so.
"Real end-to-end RCM transformations require complex technology optimization, strategic assessment of patient mix and payers, analytics, decision support tools, staff training, outsourcing and new software implementations," Doug Brown, managing partner of Black Book, said in an announcement.
"Next-generation RCM will not be achieved via old-school directives to cut staff, slash expenses, and pushing RCM work to the lowest-cost outsourcer. The new era of how providers get paid is going to impact the entire organization and most hospitals aren't remotely prepared for it," Brown said.
Among the findings in the survey:
- 90 percent of those who use RCM consulting services expect their expenses to double for add-on RCM projects in 2014. Thirty-six percent of "light users" of consulting services said their expenses could quadruple.
- 86 percent of hospital C-level executives expect new RCM consulting engagements to be under way through the end of 2014. Fifty-seven percent expect new projects to begin by June 2014.
- 66 percent of RCM-centric consulting firms and 92 percent of general management consulting firms expect to be hiring additional RCM financial and technology experts in this high-growth area.
Among the challenges the executives cited to the RCM projects:
- 77 percent have not begun a strategic plan for transforming RCM solutions for known deadlines because of lack of internal experts to do so.
- 80 percent of CIOs said they do not have the IT staff in-house to transform RCM end-to-end.
Changing reimbursements and claims complexities are creating "significant opportunities" for independent and niche RCM consultants, the survey found, though many of those organizations report difficulty finding staff with the necessary expertise as well.
Pre-authorization and bill estimation were the functions organizations most wanted to improve in a recent study from HIMSS Analytics.
To learn more:
- find the Black Book announcement