Revenue cycle vendor R1 RCM announced Monday it has signed an end-to-end agreement with the medical group Mednax.
Chicago-based R1 said in a statement that it expects to improve Mednax's clinical, financial and operational performance as well as patient experience for the prenatal, neonatal and pediatric services provider. R1's model uses a proprietary technology platform, intelligent automation, data analytics and technical experience, the company said.
"With our sophisticated technology assets and unique operating model, we have demonstrated how organizations can improve both patient experience and financial performance," R1 CEO Joe Flanagan said in a statement. "We are confident we can deliver the same strong results for Mednax."
The announcement is R1's first end-to-end win of fiscal 2021, according to a report from SVB Leerink Analyst Stephanie Davis. Not only that, Davis wrote that the partnership covers $1.5 billion in net patient revenue, bringing R1 closer to its target of $4 billion in net patient revenue wins this year.
SVB Leerink predicts the contract will contribute about $23 million in revenue in fiscal 2021 and $68 million at its full run rate, likely in fiscal 2025.
"We view this win as the first of many post-pandemic—recall COVID accelerated the shift towards outsourced RCM—and believe R1 remains in the catbird seat as the market leader in the space," Davis wrote.
Indeed, experts who follow the industry have said the pandemic has sped up the pace at which providers outsource their billing and revenue collection. Only 5% of health system finance chiefs said they outsourced their revenue cycle in 2016. That was up to 51% by October 2020, according to a Baird survey.
Mednax provides services through a network of more than 2,300 physicians in 39 states and Puerto Rico. Mednax CEO Mark Ordan said in a statement the collaboration is designed to ensure consistency across his company's revenue cycle operations and enable meaningful operating expense reduction.
"We believe this is another major step toward furthering our company-wide focus on our core services and will allow our affiliated physicians and clinicians to concentrate on what matters most – delivering the highest quality care to our patients," he said.