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Understanding the opportunity of outsourcing RCM in optometry practices
By Barbra Dey,
Dey Ophthalmic Consulting
April 16, 2025
Revenue Cycle Management (RCM) is a critical yet often overlooked aspect of optometry practices. Many prioritize clinical care over business operations, leading to missed revenue opportunities.
A lack of understanding of how insurance billing and collections impact cash flow, coupled with time constraints and competing priorities, contributes to this issue. Owners and managers may not fully grasp the importance of timely claims correction and re-submission in maintaining financial stability.
Doctor-owners typically receive little-to-no formal training in RCM, as their education focuses on patient care rather than financial management. The demands of patient care, regulatory compliance and daily operations often push RCM to the background.
However, neglecting a strong RCM strategy can lead to lost revenue, delayed payments and financial instability.
The Benefits of Prioritizing RCM
Prioritizing RCM can significantly enhance financial performance, operational efficiency and patient satisfaction. When properly managed, RCM ensures accurate revenue capture and timely collections, improving cash flow and financial stability.
Regular data analysis helps identify revenue leakage and areas for improvement. Automating administrative processes and implementing standardized workflows can increase efficiency, reduce errors and free up staff to focus on patient care.
Additionally, clear and transparent billing processes enhance the patient experience by reducing confusion and frustration.
Challenges in Collecting Outstanding Balances
One of the biggest challenges in RCM is collecting outstanding balances once they exceed 90 days. The difficulty varies between insurance and patient payments:
- Insurance Payments: Many insurers impose strict claims submission deadlines. If a claim is not submitted within the required time frame, the insurer is no longer obligated to pay, resulting in lost revenue. Additionally, denials due to incorrect coding or missing information must be corrected and resubmitted promptly to avoid forfeiting payments.
- Patient Payments: Once insurance processes a claim and the patient is billed for any remaining balance (such as deductibles, co-pays or non-covered services), the likelihood of collecting decreases over time. If a balance reaches 120 days, collection becomes nearly impossible. Practices can mitigate this issue by collecting expected overages upfront, including deductibles and co-pays, which significantly improves accounts receivable (AR) balances and reduces the burden of chasing overdue payments.
Strategies for Effective RCM
To fully realize the benefits of RCM, practices must implement proactive strategies. One key approach is for the billing team, practice manager, or owner, to review RCM data on a monthly basis using key reports and benchmarks.
Key RCM Reports and Benchmarks
- Accounts Receivable (AR) Aging Report: Tracks outstanding balances by age categories (e.g., 0-30 days, 31-60 days, 61-90 days, 91-120 days, and over 120 days). High ratios in older categories could indicate billing inefficiencies, payer delays or ineffective collections. Identifying trends and conducting payer analysis can help refine collection policies.
- Denial Management Report: Analyzes denied claims to uncover trends, such as common denial reasons and payer-specific issues. Addressing these issues can improve approval rates and reduce revenue loss.
- Charge Lag Report: Measures the time between service delivery and charge entry. Reducing charge lag improves cash flow and minimizes revenue delays.
- Collections Report: Compares the amount of revenue collected against the total billed. Practices should track this metric to ensure they are optimizing collections and addressing outstanding balances promptly. Example: Collecting deductibles at the time of service can prevent future collection issues.
Outsourcing RCM: What You Need to Know
Many practices opt to outsource RCM to specialized companies that handle billing, claims processing and collections. This can be a viable solution, especially in today’s environment where skilled billing employees are hard to find.
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However, outsourcing RCM does not mean “set it and forget it.” An internal billing expert or practice manager must serve as a point person to oversee the RCM company, review reports and ensure collections remain on track.
Vetting an RCM Company
Before outsourcing, practices should carefully evaluate potential RCM providers.
Here are some key factors to consider:
- Experience in Optometry & Ophthalmology: Ensure the company has expertise in medical and vision insurance billing, understands payer contracts and is familiar with optometric coding and vision plan reimbursement policies.
- Transparency in Reporting: The RCM company should provide detailed, real-time reports on claims, denials, AR aging and collections. Practices should have full visibility into their financial performance.
- Technology & Integration: Confirm that their systems integrate with your practice management and electronic health record (EHR) software. This ensures seamless data flow and minimizes manual entry errors.
- Claims Follow-Up Process: Ask how the company handles denied or delayed claims. A good RCM company should have a structured denial management and re-submission strategy to prevent revenue loss.
- Fee Structure & Hidden Costs: Clarify pricing—whether they charge a flat fee, percentage of collections or per-claim fee. Be wary of hidden costs for claim follow-ups, patient statements or software integrations.
- Onshore vs. Offshore Staff: Many RCM companies use offshore teams for claim processing while keeping account managers in the U.S. Understand who will be handling your claims and ensure you have an accessible, responsive point of contact.
- Client References & Performance Metrics: Request references from current clients and ask about their experience. Inquire about performance metrics like average days in AR, first-pass claim acceptance rate and denial resolution times.
- Contract Flexibility & Exit Strategy: Avoid long-term contracts with rigid terms. Ensure there’s a clear exit strategy in case the service doesn’t meet expectations.
Benefits of Outsourcing RCM
When managed correctly, outsourcing can offer significant advantages:
- Access to Expertise: RCM companies bring specialized knowledge, improving claims accuracy and reducing denials.
- Cost Savings: Often more cost-effective than hiring and training an in-house billing team.
- Scalability: Services can be scaled up or down based on practice growth or seasonal fluctuations.
- Focus on Patient Care: Reducing administrative burden allows staff to dedicate more time to patient interactions.
Conclusion: Capturing Easily Lost Profitability
Revenue Cycle Management is a critical component of any healthcare practice. While it is often overlooked, prioritizing RCM can lead to improved financial performance, increased efficiency and enhanced patient satisfaction. Implementing proactive strategies, such as regular financial reviews, AR management and denial tracking, can prevent revenue loss.
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For practices considering outsourcing RCM, selecting the right partner is crucial.
However, outsourcing is not a hands-off solution—an experienced internal billing point person must oversee operations, review reports and ensure collections remain a priority.
By taking a strategic approach to RCM, practices can maximize revenue, streamline operations and ultimately strengthen their financial health.
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Barbra Dey, President of Dey Ophthalmic Consulting, brings over three decades of experience to help eyecare practices thrive in today’s competitive market. Barbra specializes in assessing practice operations, delivering actionable strategies, and working alongside leadership teams to implement transformative change. Her mission is to empower eyecare practices to unlock their full potential and achieve sustainable growth. Contact Barbra at barbradey@outlook.com
