For homecare agencies operating on thin margins, revenue cycle management (RCM) is more than an operational task—it’s essential to survival. You might be delivering excellent care and growing fast, but if you’re not collecting the revenue you’ve earned, your agency simply won’t thrive.
If your agency is under pressure, you may be scrutinizing your RCM processes and wondering if there’s room for improvement. But here’s the dilemma: the more time you and your team spend managing billing operations, the less time you have to focus on other critical parts of your business. It’s a common crossroads for agency leaders—and one that often sparks the question: Is outsourcing RCM the right move for us?
This guide walks you through how to evaluate that decision, from identifying internal challenges to performing a cost-benefit analysis, to selecting and managing the right outsourcing partner.
A homecare agency’s revenue cycle—the series of steps from intake to reimbursement—is its financial lifeblood. When performance falters, agency leadership often gets pulled into the weeds. But that attention comes at a cost: less focus on client care, strategic growth, and organizational development.
Today’s homecare environment offers both challenges and opportunities. But only agencies that think strategically, not reactively, can capitalize on them. Overcommitting leadership bandwidth to in-house billing risks missing those opportunities altogether.
Consider the dynamics outlined in the chart below. Industry-wide trends like EVV mandates, payer diversity, and value-based payments can either be disruptive or a growth lever—depending on how much time and energy you have to respond.
Agencies that manage reactively instead of strategically risk missing these key opportunities especially if too much time is spent chasing revenue cycle issues.
There are challenges, risks, and costs associated with managing billing in-house (especially if your team is not well-equipped to do so) including:
Outsourcing RCM can help agencies:
But outsourcing isn’t an all-or-nothing decision; it’s about balance. The below diagram presents this clearly: concerns like cost, control, and service must be weighed against gains in scalability, performance, and expertise.
Thankfully working with the right RCM partner will alleviate many of these concerns.
Outsourcing isn’t the right fit for every agency. In some cases, insourcing can be the more practical and cost-effective option, especially if you already have a very capable team in place and aren’t facing challenges in other areas of the business.
Pros of Insourcing:
If your agency chooses to keep billing in-house, there are powerful billing tools and systems available that can help make that choice more manageable. From automated claims management to real-time reporting dashboards, the right technology can streamline internal workflows and reduce the operational burden.
Before you decide if outsourcing is the right choice for your agency, you need to assess how your billing operation is really performing.
Start with a simple analysis:
Compare total receipts to total net revenue for the year (after adjustments). Then compare how much of that was accurately posted to accounts receivable (AR).
This can be handled by a junior accounting resource and should highlight your true collection rate. Reviewing revenue billed vs. cash deposits vs. payments applied smooths out monthly anomalies and surfaces key gaps.
To understand how internal RCM performance can impact your bottom line, let’s take a closer look at a real-world agency analysis.
The chart below illustrates an agency which reviewed its revenue billed vs. cash deposits vs. payments applied over a 12-month period. By smoothing out monthly fluctuations, the data painted a clear picture of performance gaps. Here’s what the analysis uncovered:
All these issues signal deeper inefficiencies and point to the first potential benefit of outsourcing: a knowledgeable partner can identify underlying root causes and recommend process improvements that internal teams may not have the time or expertise to uncover.
Once you’ve identified the problems, it’s time to evaluate how best to fix them. Is your agency better served by diverting management to internal remediation, or by handing it off to experts?
A cost-benefit analysis makes this comparison clear. While outsourcing fees may come in higher than internal costs (make certain you include ALL internal costs in this analysis), the increase in cash flow performance might eclipse that cost difference, making outsourcing a reasonable investment.
And that doesn’t account for the added value of leadership refocusing on care, growth, and strategy.
Great question. Even with full outsourcing, you’ll still need infrastructure for tasks like:
Outsourcing is delegation, not abdication.
Not all outsourcing vendors are created equal. Your partner must:
The three major vendor qualification areas are as follows:
Expertise
Organization
Service
Your potential vendor should be able to demonstrate their qualifications in each of these areas and elements. That will come from interviews, references, and industry reputation. Additionally, ensure contracts include:
Outsourcing doesn’t end with onboarding. The vendor management process is a cycle that includes the following processes:
Even with a great vendor, your agency must stay involved to ensure goals are met.
Whether you manage your billing in-house or outsource it, the decision must be deliberate and data-driven. Use real performance metrics, weigh the tradeoffs carefully, and choose a partner that fits your agency’s goals and growth path.
HHAeXchange offers a free RCM performance review and outsourcing ROI analysis. Ready to explore if it’s right for you? Reach out—we’re here to help.
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