In this episode, we uncover why outsourcing RCM in medical billing has become essential for healthcare practices to stay profitable in 2025. Once viewed as an optional efficiency move, RCM healthcare outsourcing is now a strategic necessity as practices face rising costs, staff shortages, complex regulations, and mounting claim denials.

They dive into the $260 billion lost annually to inefficient billing processes and explain how outsourcing transforms fixed overhead into performance-based partnerships that improve cash flow, reduce burnout, and streamline operations. With insights from BillFlash’s integrated RCM medical billing solutions, this episode reveals how outsourcing empowers practices to get paid faster, deliver better patient experiences, and focus on what truly matters—quality 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 00:18

Welcome to the Deep Dive.

Sarah 00:22

We're talking about the outsourcing revolution in revenue cycle management. Rcm. 

Brad 00:27

Exactly. And our mission today is really to understand why. Why now in 2025, has this gone from just an option to, well, almost a necessity for staying profitable? 

Sarah 00:39

And you really have to start with the. The scale of the problem. The financial leakage in the system right now is immense. 

Brad 00:45

Huge stakes, right? 

Sarah 00:46

Absolutely. That's driven by, well, a few big things. Rising costs, these critical staffing, shortages, everyone's feeling. And just this crushing weight of, you know, regulations changing all the time. 

Brad 00:58

Every practice, big or small, is feeling it. 

Sarah 01:00

Oh, definitely. The pressure is enormous. 

Brad 01:02

And that pressure is costing the industry. I mean, the number of these sources is staggering. Hospital systems alone losing up to $260. 

Sarah 01:08

Billion a year just from unchecked revenue cycle problems. That's. 

Brad 01:13

That's revenue that should be there. It's just lost to, well, broken processes. 

Sarah 01:16

It's money just left on the table. So. Okay, maybe we should quickly define RCM for everyone, just to be clear. 

Brad 01:22

Good idea. 

Sarah 01:23

Right, so, rcm, Revenue Cycle Management. Think of it as the financial engine room of any practice. 

Brad 01:30

Okay. 

Sarah 01:30

It's the whole process, end to end. Managing the patient's financial side starts way back at pre registration. 

Brad 01:37

Checking insurance all the way through coding, billing. 

Sarah 01:40

Yep. Collections, and finally posting that payment the whole life cycle. 

Brad 01:44

We know it's the engine room, but like you said, it's complex. And that's where practices stumble. What are the two main ways practices handle this? The operating models. 

Sarah 01:54

So basically you've got two paths. There's in house, rcm. That means your own team, your staff handles every single step. 

Brad 02:02

Okay. Direct control. 

Sarah 02:03

Direct control. Yes, but. And it's a big but. It comes with huge fixed overhead. You know, salaries, benefits, constant training, the technology costs. 

Brad 02:12

Right. 

Sarah 02:12

And the other option, that's outsourcing, where you partner up with a specialized third party company. 

Brad 02:17

And that's the key strategic move we're seeing. Right. Swapping those fixed costs for variable ones. 

Sarah 02:22

Absolutely. That's the core of it. It gives practices operational agility. You take those high fixed staffing costs and you turn them into variable fees, often based on, you know, how much they actually collect for you. 

Brad 02:34

Performance based. 

Sarah 02:35

Exactly. So practices can suddenly react better to regulatory changes or staff leaving without this huge Scramble to hire and retrain. It builds in some stability, you know, in a market that feels pretty unstable right now. 

Brad 02:49

Okay, let's unpack. Why now? Why 2025 if the old way is so inefficient? What's really pushing this acceleration right at this moment? What makes this the tipping point? 

Sarah 02:59

Well, the market size alone tells a story. Look at the numbers. The RCM outsourcing market, it hit $32 billion in 2024, but the projection, it's expected to basically triple, reaching almost $109 billion by 2033. 

Brad 03:12

Wow, that's a. That's not a small jump. 

Sarah 03:14

Not at all. It's a huge structural shift. And we're seeing it in practice intentions too. Sources say 36% of practices are planning to outsource or seriously automate their RCM this year in 2025. 

Brad 03:24

That tells you leadership gets it now. Waiting is actually costing more than making the change. So let's break down those forces. You mentioned a few key drivers creating this perfect storm. 

Sarah 03:36

Right? Four main things. Number one, and this is fundamental number the surge in high deductible health plans. HDHPs. 

Brad 03:44

yes, everyone's dealing with those. 

Sarah 03:46

Exactly. Around half 50% of workers in private industry now have these plans. And that just turns collections upside down. 

Brad: 03:54

 How so?

Sarah: 03:55

 Because instead of getting one larger check from an insurance company, providers are now chasing lots of smaller balances directly from patients.

Brad: 04:03

 Right.

Sarah: 04:03

 Much more work, way more work. More resources spent. And it shifts the whole burden of collection onto the practice and onto the patient relationship.

Brad: 04:11

 And that needs different skills. Right. Patient communication skills that maybe the back office team doesn't have or frankly doesn't have time for. What's pressure point number two?

Sarah: 04:19

 It's the one everyone's talking about. Staffing shortages and burnout. It's crippling.

Brad: 04:23

 Numbers are scary there too.

Sarah: 04:24

 They are. We're looking at a projected 3.2 million worker shortage in health care overall by 2026. And it's not just bodies, it's the specialized knowledge. You can't just pull someone in off the street to learn complex medical coding overnight, especially when it keeps changing.

Brad: 04:41

 So you lose experienced people, you lose.

Sarah: 04:43

 Experienced, you struggle to replace them. And the administrative burnout is just. It's palpable and it starts affecting patient care eventually.

Brad: 04:50

 Okay, so staffing is killer. And that stressed out, short staffed team is also trying to navigate these incredibly complex coding rules you mentioned.

Sarah: 04:59

 Exactly.

Brad: 04:59

 Which sounds like it leads straight into the third factor. Claim denials.

Sarah: 05:03

 It's a vicious cycle, really. Denials are just Soaring insurers denied almost one out of every five claims submitted in 2023.

Brad: 05:11

 One in five.

Sarah: 05:12

 And in some markets, some specific insurance plans, it can be as high as 1/3 of claims getting kicked back.

Brad: 05:18

 That's unbelievable.

Sarah: 05:19

 And think about the work involved. Each denial means staff has to stop, figure out why, fix it, resubmit it. It's a massive administrative black hole. Time and money just evaporating.

Brad: 05:30

 Doing the work, getting denied, doing the work again. It's the definition of wasted effort. Okay, and the last driver, it's the.

Sarah: 05:37

 Big one that ties it all together. This constant inescapable pressure to do more with less, especially for smaller practices. They're just overwhelmed. Yeah, the feeling is, look, billing and collections are vital, obviously, but they're still fundamentally secondary tasks to patient care. So outsourcing this specialized function is seen as frankly, the main way to stay afloat, stay profitable, and let the clinical team finally focus on patients.

Brad: 06:05

 Okay, we've definitely painted a picture of the problem. It's severe. But now let me play devil's advocate for a second. If I outsource my billing, isn't that risky? I'm handing over my entire cash flow to someone else. What are the real tangible guarantees this won't just create different headaches. What are the benefits I can actually measure?

Sarah: 06:22

 That's exactly the right question to ask. And the primary benefit, the one providers see almost immediately, is faster payments and much improved cash flow. It's demonstrable.

Brad: 06:31

 How do they achieve that?

Sarah: 06:32

 Good RCM partners have optimized workflows. They use sophisticated tech, and crucially, they have expert coding teams. Their whole focus is getting claims paid quickly and correctly the first time. The mgma, the Medical Group Management association, points this out. Vendors manage the whole submission process proactively to minimize those denials right from the start.

Brad: 06:53

 Okay, faster cash, that obviously leads to a reduced administrative burden. Right? If my team isn't fighting insurance companies or chasing down patient payments, what can they do?

Sarah: 07:04

 They can focus on higher value work, patient care, improving the patient experience in the clinic. You literally eliminate those back office billing distractions, costs and headaches, as one source put it. And importantly, you help retain your good clinical staff because you remove a major source of their frustration.

Brad: 07:20

 Plus, you're not just offloading tasks, you're gaining access to experts.

Sarah: 07:24

 Precisely. These RCM companies are the experts. It's all they do. They have teams dedicated to staying on top of every changing payer rule, every new CPC or ICD 10 code update, all the compliance stuff.

Brad: 07:36

 Stuff my internal team just can't possibly.

Sarah: 07:38

 Keep up with exactly that. Specialized knowledge is key to minimizing errors and speeding up the whole collections process.

Brad: 07:46

 And I like that. This also loops back to the patient. Patients hate getting confusing medical bills. How do these RCM partners improve that experience?

Sarah: 07:55

 They modernize the whole payment process. They use tools patients expect now, like E bills sent by text or email. Oh yeah, those link to easy online payment portals, paywoot.com as an example. And they use automated pay reminder gentle nudges. Right. Sent maybe three times a month. Strategically like 7, 14, 21 days after the statement goes out. It just makes it simpler for patients to track and pay what they owe. Less confusion, less friction.

Brad: 08:20

 Now the feature that really jumped out from the sources, especially for tackling that high deductible plan issue, was this Flexpay financing option. That sounds potentially revolutionary.

Sarah: 08:29

 It really addresses the core cash flow risk for providers. Flexpay lets patients break down their balance into manageable monthly installments. The application is quick, like under a minute. Importantly, there's no hard credit check involved. And here's the kicker. Every patient who's approved gets a guaranteed zero percent interest option.

Brad: 08:49

 Zero percent interest? That's huge for patients. But what about the practice?

Sarah: 08:53

 This is the key insight. The provider gets the full payment upfront from the RCM partner. So the practice gets paid immediately. The RCM partner takes on the financing and the collection risk. The debt management is completely off the practices plate.

Brad: 09:08

 That that literally solves the problem. Practice gets paid, patient gets an affordable plan. Collection risk is gone. That's incredibly powerful. Okay, and the last benefit mentioned was scalability and flexibility.

Sarah: 09:22

 Yeah, this is crucial if a practice wants to grow or maybe change its focus. If you suddenly get a lot more patients or add a new specialty, your.

Brad: 09:29

 RCM needs change overnight.

Sarah: 09:30

 Right? An outsourcing partner can just allocate more resources, more staff, more bandwidth almost instantly. The practice doesn't have to go through a massive time consuming internal hiring and training process just to keep up.

Brad: 09:41

 Okay, so the benefits are clear. Speed, expertise, better patient experience, risk transfer, scalability. If you decide, okay, this makes sense for us, how do you pick the right partner? What are the absolute non negotiables you need to look for?

Sarah: 09:57

 Number one, without a doubt, integration with your existing systems, Your ehr, your practice.

Brad: 10:02

 Management software has to talk to each other seamlessly.

Sarah: 10:05

 Has to. If the RCM vendor forces you into tons of manual data entry, or if their system creates sync errors with yours, the whole efficiency promise just collapses. The MGMA guidance really hammers this point. Check their tech capabilities up front.

Brad: 10:21

 Okay. Integration is key. But what about getting locked in? If I rely entirely on their proprietary system and maybe they start underperforming a year later, how hard is it to switch? That feels like a big risk.

Sarah: 10:32

 It is a risk. And that's exactly why. The second non negotiable is transparency in communication. A good partner isn't a black box.

Brad: 10:39

 Right.

Sarah: 10:39

 They should provide regular clear reports. They need to share key performance indicators. KPIs like your days and accounts receivable or AR. That's the metric telling you how fast money is actually coming in.

Brad: 10:50

 You need to see the numbers.

Sarah: 10:51

 You need to see the numbers. They shouldn't hide anything. Look for partners who schedule regular monthly review meetings where you actually sit down together, look at the AR performance and talk strategy.

Brad: 11:02

 Okay. Transparency is crucial. Let's talk about the money it sells. The pricing model. What should practices look for there?

Sarah: 11:09

 You need to understand the options. Typically there are two main models. One is a percentage of collections.

Brad: 11:15

 Okay.

Sarah: 11:16

 This is often preferred because it perfectly aligns incentives. The RCM partner only makes good money if you make good money. They're motivated to collect effectively.

Brad: 11:25

 Makes sense. And the other?

Sarah: 11:26

 The other common one is a flat fee per claim submitted regardless of whether it gets paid.

Brad: 11:31

 Okay. Different risk profile.

Sarah: 11:34

 Right. You need to carefully compare the total expected cost under each model. Weigh it against the likely roi. And this is critical. Scrutinize the contract for any hidden fees or extra charges. Get clarity on the total cost of ownership.

Brad: 11:49

 Got it. No surprises. And the final piece of due diligence before you sign on the dotted line.

Sarah: 11:55

 It's the track record and support. You absolutely must. Verify their compliance credentials, then ask for references. Talk to practices similar to yours, same size, same specialty, who use their service. Ask for case studies showing tangible improvements in financial metrics. That documented history is the proof you need.

Brad: 12:14

 Okay, so integration, transparency, clear pricing and a proven track record with solid compliance makes sense. Now to make this really concrete, let's look at that specific example from the sources. Bill Flash. How do their offerings stack up against these criteria? What does a comprehensive partner look like in practice?

Sarah: 12:31

 Right. Looking at Bill Flash helps illustrate how these pieces fit together. First, on integration, they explicitly mention compatibility with over 100 different EHR and practice management systems.

Brad: 12:41

 Okay. That addresses the integration point for a wide range of practices.

Sarah: 12:45

 Exactly. Especially helpful for smaller or mid sized practices that might not use one of the dominant EHRs and don't want to switch just for their RCM.

Brad: 12:54

 And what about tackling those awful denials we talked about earlier? How do they prevent problems up front?

Sarah: 13:00

 That's where their pre claim services come in. Before the claim even goes out the door, their teams are doing the upfront work, verifying the patient's insurance eligibility, getting any needed pre authorizations. And this is vital. They scrub the claims. Basically they check for common coding errors, missing information, anything that might trigger an instant denial.

Brad: 13:21

 So they clean it up before it gets submitted.

Sarah: 13:23

 Precisely. It builds a foundation for a clean claim that's much more likely to get paid on the first pass. Reduces that whole denial and appeal cycle significantly.

Brad: 13:31

 And their pricing and support model, does it align with what we discussed?

Sarah: 13:34

 It seems to. They offer flexibility with both flat rate and contingency pricing options. The example given was for ambulatory practices using that Flexpay patient financing feature, they could get a clear 6% flat rate deducted from their deposits. Pretty transparent.

Brad: 13:49

 And the support it matches the best practices clients. Get a dedicated account manager. That person runs those essential monthly review meetings to discuss performance plus practices. Get an online dashboard for real time tracking of claims payments ar you're not left in the dark about your money.

Sarah: 14:07

 So pulling this all together, what's the big picture takeaway? It really feels like the decision calculus for practices, especially small and mid sized ones, has fundamentally changed. It's not a luxury item anymore.

Brad: 14:20

 That really is the core strategic takeaway here. The question has shifted. It's no longer why should we think about outsourcing rcm? It's become is now the time we absolutely need to outsource rcm?

Sarah: 14:30

 Yeah.

Brad: 14:30

 This whole trend is effectively leveling the playing field. It's giving smaller players access to the kind of sophisticated technology and deep specialization that previously only the really big hospital systems could afford internally.

Sarah: 14:43

 And the data we've looked at suggests that sticking with inefficient in house processes or just delaying the decision, it has a real quantifiable cost. Absolutely. Slower cash flow, more denials piling up, frustrated staff burning out. Outsourcing is becoming the industry's standard strategic response to just how challenging the financial environment is in 2025. Failure to adapt has consequences.

Brad: 15:07

 Okay, so as we wrap up and knowing critical thinking is key in this information age, let's leave our listeners with a final thought to chew on.

Sarah: 15:15

 Right. Consider this. If a good RCM partner's incentive, getting paid a percentage of what they collect for you is perfectly aligned with your financial success, how might that dynamic really change the day to day priorities? The whole focus of your internal staff, the ones who are now freed up.

Brad: 15:31

 From billing headaches, are they now truly focused on the highest value work which is patient care. Powerful question to consider. Is your most valuable resource, your people being used most effectively? Definitely something to think about.

Narrator: 15:45

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

Sources:

Why More Practices Are Outsourcing Revenue Cycle Management in 2025