From Cost Savings to Revenue Growth: How Outsourcing RCM Benefits Providers?

Outsourcing RCM benefits

Prompt payment to healthcare providers for their services is crucial for a detailed discussion on managing macro costs, quality, and equity. Without it, addressing the issue of rising healthcare costs becomes challenging.

Healthcare providers are well aware that getting paid is not an easy task. A quick search for revenue cycle management (RCM) reveals 16-step pie charts, highlighting the complexity of this $140 billion market in the United States, which employs 188,000 medical records specialists. Successfully managing revenue cycles, which involves capturing fair payment with minimal effort, is a specialized business function. The complexity and labor-intensive nature of RCM make it difficult for a typical healthcare practice to master.

If you find yourself spending too much on RCM staff and processes or if your claims denial rate is higher than the industry average, outsourcing your medical billing may be a solution to your problems. By allowing experts to handle payment collection, you can focus on providing care, receiving payment, and improving your key performance indicators.

Outsourcing RCM: A Sensible Choice for Providers

More and more health care providers are turning to outsourcing their revenue cycle management (RCM) tasks, with up to 61% planning to do so in the future. Kaufman Hall’s 2022 State of Healthcare Performance Improvement report found that 63% of hospital and health system leaders have already pursued at least one outsourcing solution, with revenue cycle functions being the most popular at 27%.

The global RCM outsourcing market is expected to grow by 17% annually, from US$23.7 billion in 2022 to US$62.4 billion by 2028. As in-house RCM becomes more challenging due to new regulations, financial pressures, and market changes such as mergers and acquisitions, outsourcing RCM has become an increasingly attractive option for healthcare providers seeking more efficient cash flow.

Breaking Down the Benefits of RCM Outsourcing

Outsourcing your RCM (Revenue Cycle Management) offers numerous benefits for healthcare providers. Here are eight compelling reasons why it’s a smart choice:

Scarce Healthcare Talent:

Rather than diverting resources to recruit and retain administrative staff, healthcare providers should focus on maintaining a full staff of clinicians. Outsourcing RCM to specialized companies allows healthcare experts to hire healthcare professionals while RCM companies efficiently handle payments and claims management, utilizing their expertise to find and vet skilled employees.


RCM is a complex science, and dedicated RCM companies have honed their processes and technology to operate at a consistently lower cost-per-full-time-employee compared to in-house RCM staff, even after accounting for profit. External RCM companies optimize every stage of the patient life cycle, resulting in cost savings from patient registration to collection.

Additional Cost Savings:

Outsourcing RCM also leads to direct cost reductions in office supplies, technology, claims, and compliance management for healthcare organizations. The overall savings achieved through outsourcing typically far exceed the outsourcing fees.

Increased Revenue:

External RCM services can lead to a significant boost in revenue. For instance, a healthcare provider replaced its seven-member RCM staff with an external RCM service and saw a substantial increase in revenue, surpassing their previous capitation levels. Many organizations experience higher profits after choosing to outsource.

Elimination of Claims Denials:

Dealing with claims denials and resubmissions can be burdensome for healthcare businesses. Outsourcing RCM to experts alleviates this issue, as dedicated teams specialize in clean claims submission and efficient appeals handling.

Enhanced Accuracy:

Specialized RCM teams are less prone to errors like incorrect coding since clean claims are their primary focus. Additionally, outsourced RCM companies increasingly leverage artificial intelligence to automate the conversion of clinical notes into optimal billing codes, further improving accuracy.


As healthcare practices grow, their RCM staff needs to expand accordingly. Outsourcing to a third-party company provides the advantage of easily scaling up when required, as the external company already has trained and capable staff ready to join the team as needed.

Better Value-Based Care:

For providers committed to value-based care, outsourcing RCM can be a strategic move. By partnering with the right RCM service, healthcare providers can offer their care at a measurably lower cost, thereby enhancing the value of their services.

Outsourcing your RCM Service is a smart decision that can save you time, money, and headaches. It’s a way to free up your staff to focus on providing care, while ensuring that your claims are processed accurately and efficiently.