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Debunking 3 Myths About Offshoring Your Revenue Cycle Management

By Rajendra Joshi

July 23, 2022

Despite the popularity of offshoring in many industries, adoption in healthcare has been slow. Partly because there remain some preconceived notions. Revenue cycle managers and healthcare organization leaders have experienced a mindset shift over the past 10 years and now embrace offshoring some, or all, of their revenue cycle and coding/HIM functions because of the immediate benefits. Globalization has helped healthcare executives use external talent to address pressures to reduce, if not eliminate, leakage in the revenue cycle. And they are finding great success, not just in containing revenue, but also in optimizing other resources – time, talent, and tech.

While the healthcare industry has embraced outsourcing, there are still some myths about offshoring revenue cycle functions. We’re debunking the most common.

MYTH 1: When outsourcing to an offshore team, you lose control over your business and work strategies.

The reality is that offshoring your revenue cycle (partially or fully) provides billing companies and central billing offices access to well-trained, experienced college graduates who can help expedite billing activities, denials follow-ups, credit balance resolutions, and HIM/coding functions. With access to a broader talent pool, healthcare organizations see an increase in cash collections, cleaner A/R, and the ability to keep DNFBs (Discharged, Not Final Billed) within acceptable parameters.

Many offshore companies are more flexible, adapt to changes, embrace new strategies, share best practices, and work closely with their partners to achieve desired goals. The critical question: “Do you consider the offshore company a vendor or an extension of your team?”

Organizations that treat offshore partners as extensions of their teams:

  1. Work together to train staff
  2. Openly communicate
  3. Meet regularly to align on goals and achieve the desired outcomes

MYTH 2: Offshoring decreases work quality and process visibility.

One of the top misconceptions about offshoring your revenue cycle is that “it brings down the work quality or overall accuracy.” Studies show if the engagement is set up and implemented correctly, offshore revenue cycle companies perform ~15-20% better than in-house central billing offices. Often, offshore organizations are more organized, data-driven, and follow six-sigma methodologies to monitor day-to-day operations, process improvements, and workflows. Such a focused approach ultimately reflects in overall productivity and work quality improvement.

The right offshore partners share insights, trends, and help overcome challenges based on their experience with a variety of clients. Through my own experience working in this industry for 20 years, offshore partners also help document SOPs and workflows, which many central billing offices (CBOs) lack.

MYTH 3: Offshoring is mostly used to help cut costs.

Yes, offshoring does help reduce operational costs; however, that isn’t the only reason to engage an offshore provider. An offshore revenue cycle partner will also help improve your quality of work, increase productivity, provide you access to analytical dashboards and reporting, and keep you informed with trends and insights to help leaders to make data-driven business decisions.

Offshoring medical coding functions have helped hospitals and other billing companies get access to experienced, certified coding resources and management. The time difference helps keep the coding, and other billing work queues cleaner and current, which helps to keep DNFBs within desired KPI levels and yields faster claim submission. The follow-up and denials management teams working offshore follow U.S. work hours, which allows onshore CBOs to connect with offshore team members when needed.

Considerations when Outsourcing to an Offshore Provider

If you are considering outsourcing part or all of your revenue cycle management functions, here are a few recommendations to ensure you have a successful partnership.

  • Be open and honest about your key pain points and current results with the offshore partner and positive/negative experience(s) with other vendors.
  • Ask your potential partner to share reporting packages for similar engagements, which can help you understand what to expect from them.
  • Clearly define scope, expectations, roles, and responsibilities at the onset. If possible, take the PMO approach to keep it organized. This will help to monitor progress and identify potential issues ahead of time.
  • Expect your partner to dedicate a customer success liaison as a primary point of contact. This person will offer strategic and operational guidance.

Ultimately the decision to outsource your revenue cycle management should be based on organizational need and strategic alignment. Don’t let myths about offshore vendors keep your organization from making a decision that can significantly influence the financial situation of your hospital or healthcare center.

Rajendra Joshi

Rajendra Joshi


Regional Vice President, Customer Success

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