Aside from patient care, there are many supporting back-office roles that keep a medical practice functioning. One of the most crucial of those is medical billing. And, if your medical practice is like most, you probably still handle billing in-house.
After all, when it comes to outsourcing medical billing services, you’re probably concerned about things like doctor-patient confidentiality, HIPAA regulations, transparency, and oversight of your practice.
However, have you ever stopped to think of the possible benefits of working with a professional outsourced billing company? For example, to shore up your own team or take over your billing activities completely?
In this guide, we’ll help you understand medical billing inside and out as well as the possible impact it could have on your practice.
What is outsourced medical billing?
Outsourcing medical billing is exactly what it sounds like. It’s contracting out your billing activity to a third-party services provider. Usually, a medical practice engages such a provider because they don’t have the in-house time, resources, or know-how to handle billing or they are experiencing issues related to efficiency, accuracy, or scalability when it comes to in-house medical billing.
Outsourced billing for medical practices takes many different shapes and forms. Below, we’ll avail you of everything you need to know to successfully work with an external billing company.
Differences between handling billing in-house and outsourcing medical billing
Before you decide whether outsourcing medical billing is the right move for you, here are some key differences you’ll experience from handling it in-house:
Efficiency and accuracy
Contrary to intuition, outsourcing to a medical billing company will probably improve the overall functioning of your medical billing activities. This is the core competency of these types of companies and they are finely honed machines at processing claims in a timely fashion with the proper software, equipment, experience, and staff.
Control over billing activities
Of course, you’ll be able to exercise less control than if billing was conducted by your internal office staff. However, it’s exactly this freedom of concern why many go this route in the first place.
Cost and resources
Comparing internal and external medical billing in terms of cost is kind of comparing apples and oranges. Having an internal billing system comes with a large number of costs to your practice in terms of software licensing, hardware acquisition & maintenance, training, HR, payroll, etc.
In contrast, hiring a medical billing company, you’ll likely only pay a single, neat package deal. It might not always be cheaper, depending on your needs, but it will most likely be simpler to predict and calculate your costs.
The benefits of outsourcing medical billing
So, why should you outsource billing to a third party? Well, you’d be surprised at the wide range of possible benefits there are to working with a professional billing company. From improving your cash flow to delivering excellent customer service, it has the potential for all-around improvements over your in-house billing.
Free up time and resources
While it’s not possible to run a medical practice without proper billing, it’s not your core business competency. Any additional department or discipline you choose to handle in-house comes with a large number of strings attached.
For example, you’ll need to hire and manage more in-house employees, give them the necessary tools and resources, and dedicated extra resources to HR and payroll management.
This will all distract from the decision-making process which might start to affect your key performance indicators.
Improved reliability-centered maintenance (RM) and transparency
It’s a common misconception among many practices that outsourcing billing will always lead to a lack of proper communication, transparency, and accountability. In fact, in many cases, the opposite is true.
Usually, outsourced medical billing companies are bound by strict SLAs (service-level agreements). They also risk their reputation by betting on being able to help boost your organization’s success.
They often set a high bar for themselves in terms of measurable metrics, such as first-pass payments, denial rates, collection ratios. Through regular, comprehensive performance reports, you’ll get full transparency into your practice revenue and whether they are achieving their targets.
As a healthcare practice, you know that it can be an expensive business with tight margins. Solid financial performance is crucial to you being able to meet all of your responsibilities, not only to your own staff but when it comes to your patients’ interests as well.
If you tally up all the overhead expenses of running your own entire billing department you’ll see how the rates billing companies charge are actually extremely reasonable. What’s more, your costs will likely be tailored exactly to your needs and budget.
An in-house billing team will also incur unexpected expenses as a matter of doing business on a daily basis, while billing outsourcing will likely be a stable, fixed-cost expense.
Accurate and error-free billing
Billing errors or blips in your collection process can have a serious impact on your revenue cycle. Outsourced billing services, however, are well-oiled machines with it comes to the medical billing process. They will likely employe cutting-edge technology and practices to ensure that billing goes without a hitch.
Not only will this help you generate more revenue, but also ensure an excellent customer experience when it comes to processing medical claims.
Insurance and medical billing is a complex and intricate field where the fine-print can have a massive impact. From revenue cycle management to dispute resolution to continually adapting to an ever-changing industry, the challenges never stop.
A third party with expertise in medical billing can help you achieve success by providing you with expert advice regarding the entire billing lifecycle. By outsourcing your medical billing, you’ll also gain access to a wider pool of talent, expertise, and idea.
They can also advise you from an unbiased outside perspective which can help you detect and weed out inefficiencies, assess your billing needs, or find opportunities to streamline.
It can be a nightmare to try and navigate the intricate web of compliance, especially on a global, cross-jurisdictional scale. An experienced medical billing service should be well versed in all healthcare industry protocols, such as protocols Medicare, Medicaid, and third-party payers as well as data privacy legislation, such as HIPAA. Not to mention stay up to date with the constantly changing information and guidelines.
Enhanced customer experience
Because professional medical billing services are not distracted by other activities like actual medical practices, they become extremely efficient at what they do. Often, this means you’ll actually be able to process claims in a more timely manner for your clients.
Not only will it result in faster reimbursements, but more accurate medical billing with fewer billing errors should also result in a more enjoyable experience. And, as we all know, happier clients is good news for your practice, particularly in the long run.
Scalability and growth
At any one time, a medical billing company likely outsources its services to multiple companies with auxiliary on-call staff. This means that they can easily redirect resources and staff between themselves and other practitioners as needed.
So, if you’re a growing company, an outsourced billing team can provide a level of stability and shield you from the growing pains of another department, including the need to continually grow your in-house staff.
How to Choose the Right Outsourced Medical Billing Company
As healthcare practice managers, you’ve already got your hands full managing patient flow, requisitions, and making sure that the day-to-day that’s needed for treating patients is taken care of. So, you don’t have extra time or energy to spend worrying about what happens outside your medical office, such as whether your billing company is doing its job.
What outsourced medical billing services do they provide?
Even within the field of medical billing, there are many sub-disciplines and supporting billing processes. Not all outsourced billing services offer services with the same scope and responsibilities. For example, some may offer a complete, A-to-B revenue cycle management service while others may only focus on specific billing services, such as billing compliance, transmitting claims, or claims adjudication.
How soon can they start processing claims?
In most cases, it’s not as simple as the outsource medical billing services company showing up and taking over the medical billing process from you with a handshake. There will undoubtedly be some lead time as they integrate with your operation and prepare to take over the billing process.
For example, they might not use the same, or compatible software, or they might practice billing, compliance, or financial reporting in a completely different way. In any case, it’s best to be patient during this time to allow for a customized solution that doesn’t disrupt your practice.
As a general rule, it can take anywhere from 30-60 days to fully move towards outsourcing your medical billing.
Staff training and expertise
This information might be harder to come by as you’ll have to ask the medical billing services company to furnish it for you. However, it’s essential that their staff are professionally trained with the relevant skills for outsourcing medical billing services. Not only that but their training should continually be updated and refreshed to be in line with existing standards and practices. At the very least, they should also be aware of HIPAA guidelines and their impact on medical billing.
Do they handle current accounts receivable? (ARs)
ARs are your existing insurance claims or medical billing processes that are being processed. Depending on your arrangement, your medical billing services provider might or might not take over your ARs when you hire them for your billing outsourcing.
Take note that, if they do take over your existing claims, it might make the initial process of moving towards outsourced billing more complex. They might not be used to working or processing claims in the same way as you which will require some form of onboarding or conversion.
If you do decide to handle your own ARs, just prepare for your internal and outsource medical billing services to run concurrently for a couple of months, at least.
Understanding your outsourcing medical billing services provider’s reporting practices is important for a number of reasons. First of all, regular, detailed reports will help keep you abreast of what’s happening regarding your medical billing services and how it affects your revenue cycle management.
Secondly, it’s important for creating common ground regarding responsibilities and accountability between you and your billing outsourcing provider. Without it, it will be hard to establish and confirm success metrics.
Important Questions to Ask your Outsourced Medical Billing Provider
When first engaging an external medical billing company on behalf of your practice, you will have many questions. However, asking and getting answers to the following is crucial to ensure that you’ll receive an appropriate and worthy solution for your practice:
Which billing activities will need to stay in-house?
Depending on your needs, and the provider’s capabilities, you may not be able to outsource all medical billing functions. For example, many practices prefer to keep customer support and relationship management in-house. So, ask your provider how they can accommodate the unique situation your medical practice is in for a healthy relationship.
Do they provide customer support?
If you will be retaining control over some billing activities, you might need technical or other customer support from your service provider. In this case, you’ll want to make sure that their availability suits your office hours and that the quality of their customer service is legit. If you want to outsource the entire billing process, you should make sure they have the ability to offer support to your patients as well.
How will they help you achieve your objectives?
Aside from all the typical benefits associated with outsourcing, there might be specific objectives you want to achieve. For example, reducing error rates, improving revenue, improving the experience for patients, specific revenue goals, etc. A billing services company must have a clear vision and roadmap for helping you hit your targets.
Will it affect your patients in a meaningful way?
At the end of the day, the satisfaction and well-being of your patients is the most important thing. If there will be changes that affect reimbursement and the claim process for your patients, you need to be aware so that you can clearly communicate this to them. This will help avoid any misunderstandings between patients and your practice and allow for a smoother transition.
On its own, medical billing is a complex and full-time job. If you want to spend more time looking after the needs of your practice and patient care, it might be time to cut the fat and outsource your medical billing needs. After all, those operating in the healthcare industry have far more pressing concerns on their mind, such as the health and well-being of their patients.
Luckily, your practice can take advantage of outsourcing in a variety of ways, depending on what your priorities and needs are. Not every practice is the same, and your billing solution should be catered to help achieve your goals and present a united healthcare practice to the outside world.