There are some things that are just a jab in the eye, pointing out that you are getting old.  Most of these involve either a) a failing body part, b) some form of technology, or c) your children.

Sometimes, you get one from out of nowhere that really stings.

A few years ago, Oldsmobile ran an ad campaign stating, 'This is not your father's Oldsmobile.'  You get the message...We not that old, stodgy car company that we used to be.

My first car was an Oldsmobile.  Ouch, that hurt. 

Alas, they are now out of business and dead, but that is little consolation.  I was used as a punch line in a marketing campaign aimed at the cool and desirable demographic, a group to which I no longer belong.

[Time for the 'out of left field' transition that connects the lead to something related to the physician world.]

And that is a lot like what has happened with revenue cycle management (RCM) for physicians.

We got into this business about ten years ago. We bought a little billing company that, like almost all billing companies at the time, was a highly manual operation. Successfully performance was mostly predicated on having a good team of billers that worked the phones to pound on the payers to shake loose the denied claims.

My, how things have changed.

Recently I spoke to a group of physicians about the world of the EMR.I wanted to make the point about how much the technology and business processes would change in the coming decade. I wanted to caution them about not getting too fixated on current software features and functions, because they will change.  I wanted them to take the long view when evaluating options.

To make the point, I showed them a chart of the changes that have happened in the past decade on the RCM side of the business. The list of things that are now standard in the RCM process that were not even around ten years ago was staggering. And compared to the nascent EMR side of things, RCM is supposed to be the old, mature process that has been figured out, where everything is stable.

Hardly.

This is not your father's billing process.

RCM is now a fully IT-enabled business process (and changes are still coming) that more closely resembles the financial services industry than it does physician billing of the past. Yes, there is still a critical role for talented RCM professionals, from coders on the front end to A/R follow-up folks on the back end. But to be fully effective, these people must now sit atop a very robust technical infrastructure that is exchanging complex data with outside organizations at levels that go way beyond simple electronic claim submission.

And this has changed the game, and reframed the question for physicians about whether or not to outsource their billing.

Granted, I have a dog in the fight, so I am not an unbiased observer, but the case is compelling.

In the old days, when the process was highly manual, the economics between doing billing in-house or sourcing it to a third party were sort of apples to apples. 'I can hire people to work my claims, or you can hire people, but we both have the same fundamental cost structure. And since that is the case, my desire for control trumps the discussion, so I'll keep it in house.'

But now, as technology plays a larger and larger role in determining whether the RCM process collects 92% of the contractually allowed amounts (about what the average in-house billing shop produces) or 97-98% (the best practice standard), that equation has changed.

To reach optimal performance, you have to make material investments in technology, and most practices cannot justify that.RCM companies that spread the technology investment across multiple clients can.

Here are just a few examples of how technology is changing the RCM game.

• Automatic eligibility verification: If you don't verify eligibility before providing care, thank you for your charitable donation to the community. You just provided free care to a lot of patients.If you verify manually, that costs you a lot of money. Technology can do it cheaper.

• Automated claims statusing:It is expensive to have the biller follow-up on unpaid claims, so you want to do it at the right time -- not too early and not too late. Automatically checking the status of the claim with the payer lets you focus that costly human intervention at the right moment.

• Denials analysis: Simply put, a claim denial points to a failure of the RCM process at some point. Some level of denials are inherent in the business, but if your denials are higher than they should be, your RCM cost goes up, your cash gets held up in the pipeline (How do you like the fact that you are making an interest free loan to United Healthcare? How does that feel?), and ultimately, you lose some money that is rightfully yours (Oops, that free loan just became an outright gift.)With good data, you can see not only your denial rate, but what is causing the denials. Then you can go fix the process.

By the way, let's put this in context. A 5% improvement in collections for a practice running a 50% overhead expense ratio produces a 10% increase in personal income for the physician. When was the last time you were offered a 10% increase?

Maybe it is time to revisit your RCM process and performance. Maybe partnering with a competent third party billing company now makes sense.

If that is something you are considering, check out this blog about How to Evaluate Medical Billing Services from Chris Thorman at Software Advice. This is an independent company with no connection to ALN. It is a good site to help you with both RCM and IT decisions.

Don't let your RCM process get old and stodgy. Your business might go the way of Oldsmobile.