Vendors are an integral part of every revenue cycle solution. From software/technology to outsourcing/AR management – and everything in between. In an ideal world – vendors would run autonomously and produce expected results without management or oversight. Unfortunately, this is not the case – and if not managed effectively, can end up being costly from several angles: resources and time, patient satisfaction / customer service, and financial performance.
While vendor management is a broad and extensive subject, this article is going to focus on managing the basics of a subset almost all organizations are leveraging to some degree, outsourcing and AR management. Some of the more common examples are self-pay/early out, low balance and financial counseling etc. Regardless of the population – once handed over, the outcome is now in the hands of your business partner. While the size and scale of managing outsourcing vendors will vary based on organizational factors (location, technology, size/scale, budget, demographics, etc.), the core components remain constant.
As a Revenue Cycle Leader – Here a few questions to ask yourself about your vendor management strategy.
- Do I have standing meetings with my outsourcing vendors? – Setting up timely standing meetings with a standing agenda and set expectations is the first step to ensuring consistent and transparent performance.
- If so, how often? – Meeting at least monthly limits extended gaps in monitoring performance and helps maintain momentum. This can (and should) be adjusted up or down depending on project period and performance. E.g. If this is a relatively new vendor, or performance has been deteriorating – increasing the frequency to weekly or bi-weekly would be recommended.
- Are the meetings driven by consistent, meaningful and timely reporting/data? It is important to have clear and timely data (not distributed 5 minutes before the meeting) to help drive the conversation. This should include goals and results for operational indicators (inflow, production/activities, untouched accounts, call volumes etc.) as well as performance outcomes (collections, adjustments, conversions). Overall, it should be abundantly clear where performance is meeting expectations and where it is falling short.
- Have you developed structured workflows, process and procedures with your vendor partner? These help establish expectations, avoid process breakdowns and play a critical role in performance management (See audit program below). In some cases these can help build out structure and detail into the performance reporting. Both sides should be crystal clear on how populations of accounts are to be managed.
- Does the vendor have an effective audit program? The devil is in the details – especially when it comes to AR management. Vendors should have an internal audit process, down to the staff level that they are able to share and review with you. If not, it is critical to work with a vendor to set one up. These can include phone audits, account reviews, transaction reviews and portfolio evaluations. It is important to understand the vendor audit process and ensure it incorporates the process/procedure/workflow information above.
- Is there a timely and consistent reconciliation process? Black holes and gaps in workflow are a constant concern within revenue cycle, especially as technology and data management becomes increasingly complex. Finding large populations of accounts that neither side has been working can be a backbreaking discovery. To help prevent these types of landmines, there should be at least a monthly reconciliation of accounts to identify mismatches or discrepancies. A portion of the standing meeting should be used to review and evaluate root causes, and ways to minimize discrepancies going forward.
While this is not meant to be a comprehensive discussion of vendor management – it does lay some of the basics for a solid foundation. For additional information on effective vendor management, please contact Brian Felland at email@example.com.