Physician practices tend to struggle frequently with the decision about whether or not they should outsource their billing processes. It can be quite the balancing act weighing the pros and cons. What is good for one practice might not work for another.
Pros
- Cost Efficiency
In most cases, the cost of handling billing in-house is more expensive than if it were outsourced, when all related costs are considered (personnel, software, hardware and infrastructure, etc.) - Improved Billing Process Efficiency
The medical billing service manages the billing process from initial claim submissions, through collections, including follow-up on rejected claims, collection activities on delinquent accounts and patient invoicing for self-pay and balance billing. - Higher Collections
As a result of improved revenue cycle management, a practice can expect a 5-15% increase in the amount they are able to collect by switching to a billing service.
Cons
- Variable Cost
Fees paid to a medical billing service are typically based on collections. The industry average is approximately 7% of collections. - Relinquishing Control
The practice no longer has control of the billing process when they outsource to a medical billing service. - Fees
In addition to collection fees, the practice may be billed for implementation charges and additional fees for reporting or other ancillary services, such as invoicing patients, preparing statements, etc.
Key Questions
How does your practice billing and collection metrics
compare with industry standards? Do you believe your billing and
collection procedures and systems would benefit from upgrades? Are
your billing and collection operations keeping up with the
practice's growth?
Reimbursement models and payer requirements are evolving constantly. So, be sure your revenue cycle processes and technology are up to the challenge. For example, is your practice able to keep up with changing compliance and payer policies?
Have you had difficulty recruiting and retaining qualified billing and collections staff? Do staff members spend too much time trying to resolve denied claims? And last, do you have any concerns about misappropriation of funds or fraudulent billing?
Depending on your answers to these questions, your practice may want to consider subcontracting billing and collection functions to an outside vendor, which could save time and money.
Finding the Right
Third-Party Billing Vendor
This function should offer several flexible, value-based
contracting options in which payments are tied to the practice
revenue results achieved. In addition, the services it offers
should be tailored to the practice's structure and
requirements. Solutions in the vendor's package should function
seamlessly with the practice's EHR and practice management
systems.
Look for an experienced vendor that employs a full staff in all phases of revenue cycle management, as well as the related technology. The services should be in HIPAA compliance and support both ICD-10 and Meaningful Use in all stages.
The vendor's operations should include the ability to electronically process the submission of claims and remittances and the use of credit cards. Additionally, the arrangement should allow the practice access to all of its billing data, up-to-date reporting and analytics competencies in real-time.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.