As billing becomes more complex, many healthcare practices are asking an important question: Is it time to outsource revenue cycle management?

Staffing shortages, claim denials, rising patient responsibility, and time-consuming administrative tasks can make it difficult for practices to manage the revenue cycle effectively while keeping their focus on patient care.

In this episode, we explore why healthcare practices may choose to outsource revenue cycle management and how the right RCM partner can help reduce administrative burden, address revenue leakage, improve collections, and accelerate payments. We break down key stages of the revenue cycle, including eligibility verification, claims management, denial follow-up, accounts receivable, patient billing, payments, and collections.

We also discuss how modern technology and automation can improve the patient financial experience through pre-visit billing, digital billing notifications, automated payment reminders, two-way messaging, and flexible patient financing.

Tune in to learn how choosing to outsource revenue cycle management can help your practice strengthen financial performance, simplify billing operations, and give your team more time to focus on patient care.

Transcript

Narrator: 00:00

Welcome to the Billing Blueprint Podcast, your go to resource for innovative medical billing solutions. Each episode we explore the latest industry trends and share proven strategies to help your practice streamline operations and get paid faster. Now here are your hosts, Brad and Sarah.

Brad: 00:23 Have you ever, like, opened your mailbox weeks or maybe even months after going to the doctor, and you pull out this medical bill that just leaves you completely baffled?

Sarah: 00:33 Oh, yeah, constantly.

Brad: 00:34 Right. You look at this piece of paper and you're trying to decipher all these line items that basically look like ancient hieroglyphics, and you're just wondering if your insurance actually paid anything at all.

Sarah: 00:47 Usually it feels like they didn't.

Brad: 00:48 Exactly. And, you know, if you think about your last actual visit to the clinic, like the physical waiting room, have you noticed how stressed the front desk staff looks?

Sarah: 01:00 It's palpable.

Brad: 01:01 Yeah. The phones are constantly ringing. They're juggling clipboards, insurance cards, those little payment terminals. I mean, they look completely exhausted before the day has even really started.

Sarah: 01:09 Yeah. It is a very specific type of tension you feel in a clinic these days. It's not just about, you know, the medical care itself or the health anxiety that patients naturally bring in. There is this massive administrative weight just pressing down on the entire room.

Brad: 01:26 Yeah, totally.

Sarah: 01:27 And it fundamentally alters the dynamic between the patient and the practice.

Brad: 01:31 Well, that administrative weight, that is actually the core of our mission today. We are taking a deep dive into an article from BillFlash.

Sarah: 01:38 Right.

Brad: 01:38 It's about a concept called Revenue Cycle Management, or RCM, outsourcing.

Sarah: 01:43 Yes, RCM.

Brad: 01:44 And we are going to explore this hidden crisis in healthcare. Like why the simple act of a doctor getting paid for their work is completely breaking down.

Sarah: 01:53 Breaking down is the perfect way to phrase it.

Brad: 01:55 Yeah. And how outsourcing this backend process is somehow helping practices increase their collections by up to 60%, which is wild. So, okay, let's unpack this, because what you experience as a slightly annoying bill in the mail is actually a symptom of a massive systemic business failure happening behind the scenes.

Sarah: 02:16 Yeah. And to understand, like, the sheer scale of this failure, we really have to look at the workforce data driving it.

Brad: 02:22 Okay, let's hear it.

Sarah: 02:23 So the sources highlight this recent report from the American Academy of Professional Coders, the AAPC, and they found that 63% of healthcare providers are currently experiencing staffing gaps in their RCM departments.

Brad: 02:36 Wait, 63%?

Sarah: 02:38 63%. So more than half the very people whose entire job it is to ensure the practice gets paid, they are simply missing. There are just not enough of them in the labor market right now.

Brad: 02:50 I mean, that is a staggering deficit for a function that literally keeps the lights on.

Sarah: 02:55 Exactly.

Brad: 02:55 And the impact of that shortage, it obviously bleeds directly into timelines because the sources cite a 2025 report from JP Morgan on healthcare payments trends.

Sarah: 03:04 Right, the JP Morgan one. Yeah, yeah.

Brad: 03:06 And they found that 71% of respondents say it takes more than 30 days post visit just to receive a payment. Over a month, more than a month, just to get paid for a service you already provided. I mean, think about it like this. Imagine going out to eat at like a really nice restaurant. You finish your meal and you ask for the check. But instead of handing you a simple bill for your steak and your wine, the waiter basically drops a labyrinth of alphanumeric codes and insurance policy clauses right on your table.

Sarah: 03:36 Yeah. And says, good luck.

Brad: 03:37 Right. Tells you to go home and says they will mail you the final total in a month or two, which is insane. And when they finally do mail it, it might be for a completely different amount than you originally expected. All based on a decision made by some third-party corporation.

Sarah: 03:53 Yeah. You would never eat at that restaurant again.

Brad: 03:56 Never. But what's fascinating here is the domino effect this creates for the clinic's financial stability.

Sarah: 04:02 Absolutely. What's fascinating here is, well, when you combine that 30 plus day wait with the reality of those understaffed billing teams we just talked about.

Brad: 04:11 Right, the 63% shortage.

Sarah: 04:13 Exactly. The system just simply buckles under the pressure. The source material points out this major shift in the industry, which is the rise of high-deductible health plans.

Brad: 04:21 Oh, yeah, everybody has those now.

Sarah: 04:23 Right. So a much larger portion of the financial responsibility now falls directly on you, the patient, rather than the insurance company just cutting one single massive check to the clinic.

Brad: 04:35 Right, so the clinic has to chase down the patient for the money.

Sarah: 04:38 Yes, but the clinic's billing team doesn't have the manpower to follow up manually on hundreds of individual $50 or $100 balances.

Brad: 04:48 Because they're already short staffed.

Sarah: 04:50 Exactly.

Brad: 04:50 Yeah.

Sarah: 04:51 So when those manual follow up calls don't happen, you get what the industry calls revenue leakage.

Brad: 04:56 Revenue leakage?

Sarah: 04:57 Yeah. Claims slip through the cracks, balances go completely uncollected, and suddenly the clinic is experiencing highly inconsistent cash flow.

Brad: 05:07 I mean, they are doing the medical work, but the money is literally just not making it into the bank.

Sarah: 05:12 It's not.

Brad: 05:12 It's like the silent killer of a small business. You can have a packed waiting room every single day, but if that revenue is leaking out through, you know, administrative cracks, the doors are eventually going to close.

Sarah: — They really are.

Brad: — But to understand how that money just vanishes into thin air, we kind of have to look at the gap between the doctor writing a chart and the bill actually arriving. So, earlier you mentioned RCM, Revenue Cycle Management. We really need to define the anatomy of this beast.

Sarah: 05:40 Yeah, let's do it. So the BillFlash article defines Revenue Cycle Management as the entire lifecycle of a patient account.

Brad: 05:46 Okay.

Sarah: 05:47 It starts the actual moment you call to schedule an appointment, and it does not end until your account reaches a zero balance.

Brad: 05:54 Wow.

Sarah: 05:55 Yeah, the sources break down these steps pretty clearly. You have insurance eligibility verification, demographic and charge entry, the actual claim submission, denial management and accounts receivable management.

Brad: 06:06 Okay, wait. I need a quick translation on that last one. Accounts Receivable.

Sarah: 06:09 Oh, right. So it's a standard accounting term often abbreviated as just AR.

Brad: 06:14 AR. Got it.

Sarah: 06:15 Yeah. It simply means the balance of money due to a firm for goods or services delivered but not yet paid for by customers. So in this context, it's the outstanding money the insurance companies or the patients owe the doctor. Managing that AR means actively chasing down those unpaid debts before they become totally uncollectible.

Brad: 06:36 Okay, that makes sense. But honestly, hearing that entire list of steps, like insurance verification, charge entry, denial management, chasing down accounts receivable, I keep thinking about how we're used to retail transactions. You do the work, you generate a bill, you mail it. Why does generating a medical bill require an entire cycle management department?

Sarah: 06:57 It sounds like overkill, right?

Brad: 06:59 It does. It feels like we are completely overcomplicating an invoice.

Sarah: 07:02 Well, that assumption makes perfect sense until you look at the hidden complexities of the healthcare ecosystem.

Brad: 07:07 Okay, explain that.

Sarah: 07:08 Sending the invoice is merely the final tiny tip of a massive administrative iceberg. Long before you even step foot in the clinic, the RCM process has begun with pre-claim services. The clinic staff has to verify your active coverage, figure out your exact copay amount, check your deductible status, and secure any necessary referrals or prior authorizations from your insurance provider.

Brad: 07:32 That's a lot of upfront work.

Sarah: 07:34 It is. And if they don't lay this foundation flawlessly before the visit even happens, the claim will be dead on arrival when they finally submit it weeks later.

Brad: 07:43 Oh, wow.

Sarah: 07:44 Yeah. The insurance company will simply refuse to pay.

Brad: 07:47 So the invoice is completely useless if the groundwork wasn't perfect.

Sarah: 07:51 Exactly.

Brad: 07:51 And the text specifically notes that even tiny coding errors or missing documentation can lead to these claim denials.

Sarah: 07:59 Oh, absolutely. Let's walk through exactly how that happens. Because in healthcare, every diagnosis and every procedure has a specific alphanumeric code.

Brad: 08:07 Oh yeah, I've seen these on my bills. They usually have like a bunch of letters in front of them. Like CPT codes.

Sarah: 08:12 Yes, CPT codes.

Brad: 08:14 What does CPT actually stand for?

Sarah: 08:16 It stands for Current Procedural Terminology. It is a universal language used to report medical, surgical and diagnostic procedures to entities like physicians, health insurance companies, all those guys. So let's say a doctor gives you a minor knee injection.

Brad: 08:30 Okay. Pretty standard, right?

Sarah: 08:32 There is a very specific CPT code for that exact injection. Right. But the insurance company's automated computer system demands that the doctor's written notes perfectly justify that specific code.

Brad: 08:45 Oh, I see.

Sarah: 08:46 So if a short staffed medical assistant accidentally enters one wrong digit, or if the doctor, you know, just forgot to document which specific quadrant of the knee was injected.

Brad: 08:55 The payer's algorithm spots the mismatch instantly.

Sarah: 08:58 Instantly. And it rejects the claim outright.

Brad: 09:00 It just kicks it back to the clinic.

Sarah: 09:02 Precisely. And now the labor intensive part of the cycle actually begins because someone has to fix it. An understaffed clinic has to pull that denied claim out of the system. A human being has to read the denial code, cross reference it with the doctor's original chart, figure out what went wrong, correct the edit, write an appeal, and resubmit it to the insurance company.

Brad: 09:24 That sounds exhausting.

Sarah: 09:25 It can take hours of administrative labor for a single claim. So when you multiply that by hundreds of claims a week, you see why a 63% staffing shortage is catastrophic. They literally don't have the time to fight with insurance companies over a missing modifier code.

Brad: 09:40 So they just write it off as a loss.

Sarah: 09:42 Exactly.

Brad: 09:43 And the revenue just leaks out of the practice. So the in-house RCM machinery is simply too complex and honestly too fragile for these burned out clinics to handle alone.

Sarah: 09:54 Right.

Brad: 09:55 Which brings us to how the industry is attempting to solve this crisis, which is by outsourcing this entire operation to specialized companies.

Sarah: 10:03 Yeah. And this is a massive structural shift in how healthcare operates. The sources bring in a 2025 poll from the Medical Group Management Association, the MGMA.

Brad: 10:12 Okay.

Sarah: 10:13 And it found that 36% of respondents are already outsourcing or automating at least part of their RCM.

Brad: 10:18 Over a third.

Sarah: 10:19 Yeah. Mostly focusing on collections and medical coding. It is rapidly transitioning from a niche service to the industry standard.

Brad: 10:26 And the benefits outlined in the BillFlash article, they really show us why. They list faster claims processing, proactive denial management and reduced accounts receivable days. Plus, it gives these local independent clinics access to, like, enterprise level technology without adding any overhead costs to their own payroll.

Sarah: 10:48 Which is huge for them.

Brad: 10:49 Totally. But the statistic that just jumps off the page is the revenue impact. Partnering with the right RCM company can increase a practice's collections by up to 60%.

Sarah: 11:00 60%.

Brad: 11:01 Which is wild. So what does this all mean? We're basically looking at a local race car driver in the middle of a high stakes race, driving at 150 miles per hour. That driver is the doctor providing patient care.

Sarah: 11:13 Okay, I like this.

Brad: 11:14 Suddenly that driver has to pull over, jump out of the car, try to change their own tires, and refuel the car completely by themselves before getting back on the track.

Sarah: 11:24 Right.

Brad: 11:24 That is a clinic trying to handle their own billing. Now, outsourcing is hiring a highly specialized elite pit crew. The clinic stays in the driver's seat, focusing entirely on driving, while the pit crew handles the revenue engine in the background.

Sarah: 11:39 That pit crew analogy perfectly highlights the operational difference between an in-house assistant and a specialized firm. Because companies like BillFlash, they don't just act as passive data entry clerks.

Brad: 11:51 They're not just typing in numbers.

Sarah: 11:53 No, they actively plug the holes in the boat through data backed reporting. The article highlights their focus on proactive denial management, which involves something called root cause analysis.

Brad: 12:04 Man, that is how you get a 60% bump in collections. You stop the leak at the actual source. But you know, looking at this solely from the back office perspective kind of misses half the equation.

Sarah: 12:14 How so?

Brad: 12:15 Well, if the system is perfectly optimized on the back end, but the patient still feels overwhelmed or refuses to pay, or honestly simply can't figure out how to pay, the revenue cycle still fails.

Sarah: 12:27 Oh, that's a great point.

Brad: 12:28 Yeah, we have to look at how specialized RCMs actually alter your experience as a patient.

Sarah: 12:33 Well, the patient experience is no longer just a separate customer service issue. It really is the most vital component of the revenue cycle itself. The sources share this consumer statistic that should honestly be a wake up call for every medical practice out there. Over 70% of patients under the age of 35 are willing to switch providers just to get a better healthcare payment experience.

Brad: 12:57 Wait, 7 out of 10 young patients will literally leave a medical professional they like and trust just if the billing process is too annoying?

Sarah: 13:06 Yes. The tolerance for manual disconnected workflows is practically zero among younger consumers. They expect the quick, accurate digital responses they get in every other area of their commercial lives. From, you know, ride sharing to food delivery.

Brad: 13:23 Absolutely.

Sarah: 13:24 And a company like BillFlash, which has honed these solutions for over 20 years now, they step in to completely restructure the patient interaction to remove all of that friction.

Brad: 13:35 Yeah. The article actually mentions a suite of specific tools they use to create this friction free environment.

Sarah: 13:41 Right.

Brad: 13:41 First, they have this thing called PreBill, which notifies you of your estimated balances before the scheduled visit so you aren't blindsided.

Sarah: 13:49 Which is huge.

Brad: 13:50 So huge. Then they use eBills and PayReminders. So instead of the clinic staff having to print an invoice, lick a stamp, and mail you this confusing piece of paper, you get an automated text or email with a direct link to view and pay your bill online.

Sarah: 14:05 It's clicking a button, right?

Brad: 14:06 It completely replaces the manual staff follow up.

Sarah: 14:09 Yeah.

Brad: 14:09 They also feature something called Payer Messages, and that uses a portal called PayWoot.com, allowing you to ask billing questions directly to an expert without ever having to call the clinic and sit on hold.

Sarah: 14:20 No more waiting on hold, which is the dream.

Brad: 14:22 And finally, they have FlexPay, which is patient financing. And this pays the healthcare provider upfront in full, but it allows the patient to spread out their payments over time. It boasts a 90% approval rate, 0% interest options, and no hard credit check.

Sarah: 14:40 It's a really solid setup.

Brad: 14:41 It is. But here's where it gets really interesting, though. I hear all this tech, you know, texts, portals, financing. But does a text message actually overcome the fundamental sticker shock of a high medical bill?

Sarah: 14:55 What do you mean?

Brad: 14:56 Like if I owe $2,000, a nice portal doesn't magically put $2,000 in my bank account.

Sarah: 15:02 That's very true. But if we connect this to the bigger picture of behavioral economics, we find that getting paid is rarely just about the absolute dollar amount.

Brad: 15:12 Okay, then what is it about?

Sarah: 15:13 It is heavily dictated by the psychology of consumer friction and something called cognitive load.

Brad: 15:19 Cognitive load being the amount of mental effort it takes to complete a task?

Sarah: 15:24 Yes, exactly. When you receive a confusing paper bill for $2,000, the cognitive load required just to understand it is immense.

Brad: 15:32 Oh, totally.

Sarah: 15:33 Your only option to decode the charges is to find time during your own working hours, call a busy clinic, sit on hold, and likely argue with a stressed receptionist who doesn't have the time to explain the nuances of your specific insurance deductible.

Brad: 15:47 Yeah, they just want you off the phone.

Sarah: 15:48 Right. So the mental barrier is so high that human nature just takes over. You are highly likely to throw the bill in a drawer and just ignore it until it goes to collections. The friction itself prevents the payment.

Brad: 16:00 Out of sight, out of mind. The mental tax is just too high to deal with on a random Tuesday afternoon.

Sarah: 16:06 Exactly. But when you remove that friction, the behavioral dynamic completely changes. If you can ask a question via an asynchronous portal like PayWoot.com while you're just sitting on your couch at 9pm and then get an immediate clear answer on your phone the next morning, that cognitive load drops drastically.

Brad: 16:25 That makes a lot of sense.

Sarah: 16:26 And more importantly, if you click a text link and can instantly set up a 0% interest payment plan without a hard credit check affecting, you know, your mortgage application, suddenly that $2,000 sticker shock becomes a highly manageable $50 a month. The patient feels in control.

Brad: 16:43 It's all about control.

Sarah: 16:45 Yes, making it procedurally easy and psychologically safe to pay is just as vital as the patient having the funds to pay. By removing the barriers, you transform this adversarial debt collection process into a collaborative.

Brad: 17:00 Consumer experience, which dramatically increases the likelihood of actually collecting the money.

Sarah: 17:05 Exactly.

Brad: 17:06 I mean, that reframes the entire concept of billing. It is not just about sending a demand for payment. It is about engineering a pathway where the absolute easiest option for the patient is to just click approve.

Sarah: 17:17 Yes.

Brad: 17:17 And honestly, that brings us to the core lesson of this deep dive. We have been talking about the granular details of medical billing, CPT codes, root cause analysis, insurance denials, but the fundamental truth here applies to absolutely any business.

Sarah: 17:31 Absolutely.

Brad: 17:32 When the administrative burdens, you know, the back-end paperwork, the chasing down of invoices, the putting out of operational fires, when that overshadows the core service that the business is meant to provide, the whole system just degrades. It falls apart, the product suffers, the employees burn out and the customer gets a terrible experience.

Sarah: 17:50 And healthcare has just been historically slow to adapt to this universal business truth. The core service is supposed to be healing, but the operational reality has just become accounting.

Brad: 18:03 Yeah, that's exactly it. So the next time you go to your doctor and you notice they are using some new digital check in system, or you get a text message with a link to set up a payment plan instead of being handed a clipboard and a piece of paper, don't be annoyed by the change.

Sarah: 18:17 Definitely.

Brad: 18:18 Because this deep dive explains exactly why they are doing it. They are outsourcing the headache. They are hiring the pit crew so they can get back to driving.

Sarah: 18:25 Right.

Brad: 18:26 And that is a good thing for everyone. From the front desk receptionist who is finally getting a break from those ringing phones to you in the waiting room.

Sarah: 18:35 Yeah. It allows the practice to survive financially in a landscape of shrinking margins while basically reallocating their human energy back to where it truly belongs, which is patient care.

Brad: 18:47 Which leaves us with a final thought to ponder today, something that builds on everything we've uncovered about this automation. If AI and specialized outsourced RCMs continue to perfectly streamline the financial side of healthcare, like if they render those waiting room clipboards, the ringing phones, and all those stressful billing conversations at the front desk completely obsolete, will this fundamentally change the doctor patient relationship itself?

Sarah: 19:12 Well, that's interesting.

Brad: 19:14 Think about it. When the stressful transactional business element is completely removed from the physical clinic and it's just handled quietly in the cloud, does healthcare finally get to just be about health again?

Sarah: 19:26 That's a great question.

Brad: 19:27 I mean, think back to our restaurant analogy. If you never have to see the bill or decode the menu prices or wait around for the check, you get to just enjoy the meal and the company. Maybe that is the future of going to the doctor. Thanks for taking this deep dive with us.

Narrator: 20:00

Thanks for tuning into the Billing Blueprint podcast. For more insights or to dive deeper dive deeper into today's topics. Head over to billflash.com. Don't forget to subscribe and we'll catch you next week with more strategies to keep your practice running smoothly and getting paid faster.