Hospitals and health systems considering consolidating revenue cycle management vendors should prioritize cash flow protection, transition costs and operational continuity rather than assuming fewer vendors will lead to savings, according to an October 2026 Black Book Research report shared with Becker’s.
The report outlines key considerations for hospital boards evaluating whether to consolidate outsourced or co-sourced revenue cycle functions as they prepare their 2027 budgets.
In the initial survey, 96% of respondents rated information about the time between service delivery and cash collection as essential when evaluating vendor renewals. Another 95% prioritized visibility into the full cost of collections, including hospital resources retained internally, while 57% considered estimates of transition costs essential.
Black Book emphasized that vendor consolidation alone does not guarantee lower costs or improved financial performance. Hospitals must evaluate the financial and operational implications of proposed changes and establish measurable expectations before moving services between vendors.
Ten priorities for hospitals considering RCM vendor consolidation, according to the report:
1. Evaluate service coverage. Hospitals should identify all contracted revenue cycle functions and determine whether consolidating vendors would leave any service gaps.
2. Compare vendor performance. Leaders should assess vendors using comparable performance data across equivalent functions, patient account populations and reporting periods.
3. Protect cash flow during transitions. Consolidation plans should establish safeguards for billing continuity, outstanding account backlogs and cash collection monitoring.
4. Account for transition costs. Hospitals should calculate the full cost of switching vendors, including system migrations, implementation expenses and temporary duplicate operations.
5. Assess ongoing costs. Beyond vendor fees, leaders should consider technology expenses and internal staffing or resources that will remain necessary after consolidation.
6. Preserve specialized expertise. Hospitals should identify specialized revenue cycle functions, including complex claims management, that require experienced personnel throughout and after the transition.
7. Clarify accountability. Leaders should establish clear ownership of revenue cycle responsibilities, particularly when accounts move between departments, functions or vendors.
8. Evaluate vendor concentration risks. Consolidating services with fewer providers can increase reliance on individual vendors. Hospitals should review business continuity plans and alternative operating capacity in the event of disruptions.
9. Ensure data portability. Hospitals should verify that vendors can transfer usable data, including historical account information, without compromising operational continuity.
10. Plan for future vendor changes. Consolidation agreements should address potential exit costs, transition assistance and the practical requirements of moving services to another vendor.
The report also recommends evaluating vendors’ financial stability and determining which revenue cycle capabilities hospitals need to retain internally. For hospitals that have already consolidated vendors, Black Book recommends measuring results against documented transition costs, time since implementation and actual financial performance.
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