Insourcing vs. Outsourcing Revenue Cycle
Written By: Corey Chapman, VP of Client Services, SGS
For EMS organizations, the insourcing versus outsourcing conversation is rarely as simple as choosing one model over the other. Some agencies fully outsource billing to a third party billing company. Others manage the revenue cycle internally. Many fall somewhere in between.
The better question is: What should we own, what should we outsource, and how do we maintain visibility and accountability either way?
If Billing Is Fully Outsourced
Fully outsourcing billing can make sense for organizations that do not want to build or manage an internal revenue cycle operation. A strong billing partner may provide the staffing, technology, payer expertise, and day to day management needed to process claims and collect revenue.
But outsourcing the work does not mean outsourcing responsibility for the results.
Leadership should still receive regular reporting on collections, accounts receivable, aging, denials, payer mix, credit balances, write offs, and other key performance indicators. More importantly, someone within the organization should understand what those reports are saying and know what questions to ask.
There is still a role for outside support even in a fully outsourced model. Independent audits can validate coding, documentation, and claim processing, while consultants can help leadership evaluate the reports provided by the billing agency, identify trends, and determine where additional questions or follow up may be needed.
If Billing Is In House
Organizations that own their revenue cycle internally have more flexibility in deciding what to keep in house and what to supplement externally.
Revenue cycle leadership, payer strategy, compliance oversight, process improvement, and coordination with operations generally benefit from staying close to the organization. Other functions such as coding, insurance verification, payment posting, and accounts receivable follow up may be good candidates for outside support.
That does not have to mean permanently outsourcing a department. Temporary staffing shortages, turnover, PTO, volume spikes, or backlogs may be better addressed with project based support. Models such as RevClarity fit into this space by providing supplemental production resources while the organization continues to own and manage the overall revenue cycle.
Finding the Right Balance
The goal should not be to outsource as much as possible or to keep everything in house. The goal is to determine where the organization gets the best combination of control, visibility, expertise, flexibility, and accountability.
Two practical steps can help:
Define what you truly need to own. Review each major revenue cycle function and determine whether it requires organizational knowledge or strategic oversight, or whether it could be effectively supported externally. As part of that review, look closely at return on investment. The lowest cost option is not always the best one. Consider the full cost of staffing, management time, training, turnover, productivity, and the financial impact of work not being completed timely or accurately.
Create an independent way to measure performance. Whether billing is internal or outsourced, establish a consistent set of KPIs and periodically validate the underlying work. If billing is outsourced, make sure you are receiving meaningful reports and have someone capable of evaluating them. For a practical starting point, see our CFO Guide to EMS Revenue Cycle KPIs.
The strongest revenue cycle model is rarely defined by whether it is fully insourced or outsourced. It is defined by whether leadership understands the performance of the revenue cycle, maintains accountability, and has the flexibility to bring in outside support when it adds value.
If you are evaluating your current revenue cycle model or simply need an outside perspective on where additional support may make sense, our team is always available to help.
