MARCH 25, 2021

A Costly Separation

When acquiring medical groups, acquiring organizations, have imminent and important decisions to make regarding the medical group revenue cycle function. Due to the perceived benefit of economies of scale, combined expertise, and a perceived leverage, the tendency is to “take over” the medical group business office. The risk becomes removing revenue cycle functions and responsibilities from the operations of the medical group. 

Largely this risk centers around operational accountability and responsibility.   

Ironically, a common question asked by our physician partners is “Why does my counter-part in the geographic boundary get paid more, for the same service that I provide”. It is an honest question of value, not wanting to feel under-valued in the work and service that they are trained to perform. However, when a hospital takes over the revenue cycle, members of the operations team are delighted to separate themselves from the end determinate of financial value, “the payment for my services”.

Commonly, well intended physicians will say that a benefit of becoming acquired is that they no longer need to worry about the cause and effect of a bill getting paid, to their compensation. It is now the hospital or acquiring organizations responsibility. “A relief from my private practice days”. Though this may have been used as a recruiting carrot phrase, nothing is further from the truth. 

The end game of revenue cycle provides the resources to fund a physician’s interest in growth, the ability to support and pay for staffing, the ability to keep compensation at market rates, and fund enhanced patient services, such as costs in managing patient populations. 

The revenue cycle touches every aspect of the medical practice. The process starts when that phone rings for an appointment, continues through the pre-registration and registration, through to the visit including any point of care testing, any procedures, and then through medical decision making to coding and then finally to claims and billing. Notice how much of the revenue cycle truly happens outside the business office! Ability to impact collections occurs at the “touch points” of the patient. 

As acquiring entities move the medical group revenue cycle function to a more centralized or combined service, an unintended common result is an operational separation. A very costly separation. Practice Managers and Directors soon feel that accountability and responsibility shift to a “processing function outside the practice”.  As front desks become so busy and staff time is stretched thin, priorities shift away from a firm understanding of those process that improve collections.  After all, more times than not, the metrics and performance indicators have also shifted away from the front lines.

The long and short of it is that every staff member has an accountability to revenue cycle. Organizations that have found a seamless separation in job responsibilities and accountabilities with the right metrics experience the best outcomes.  

It is a costly separation. Without payment, abilities to improve technology, improve outcomes, and insure adequately staffed and safe processes are at risk. As that common thread, revenue cycle needs to be the priority of every operations team member.