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To Outsource or Maintain In-House Services: What You Need To Know About Medical Billing

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If there is one thing most practicing health care providers can agree on, it is the necessity and complexity of medical billing. Without effective billing operations, a health care practice cannot maximize profits, limiting its overall contributions and effectiveness in a community. 

Whether people like to admit it or not, a medical practice is a business, and to remain functional and beneficial to a community, it must place some emphasis on collections and accounts receivable. Unfortunately, most small practices are not equipped to handle this complicated and laborious task, meaning they quickly become inundated with past due accounts, leading to a decline in net collection rates and an increase in denied claims. 

A possible solution to the medical billing conundrum is outsourcing. Many private or small practices often want to keep billing in-house, but that choice can increase expenses and is not feasible for many operations. Outsourcing billing services is a practical option with tremendous upside, but there are several things to consider and understand before moving forward. 

The Advantages of Outsourcing Medical Billing Services 

As health care practices grow, many find a growing need to outsource billing services, but it is not only an option for expanding operations. Most startups can benefit from outsourced billing because of the lower costs and unpredictable patient volume. Outsourcing the billing department is an excellent option for practices that do not want to deal with an administrative team. 

Outsourcing allows a practice to focus on medicine and caring for patients. Doctors do not have to take the time to hire, train, and manage billing staff. They also do not have to worry about staff turnover, vacations, or sick time delays. 

Finally, outsourcing allows a practice to reallocate space and funds. A business can convert space for billing teams into functional practice areas. Also, the unpredictable expenses of in-house teams are transferred to a set percentage of operational costs. 

The Need for Outsourcing 

When assessing the need for outsourcing medical billing services, a practice should consider its current operations and expectations. Several questions to ask might include: 

  • Are accounts receivable too high? 
  • Is the practice’s net collection rate declining? 
  • How complex are the coding and billing standards for the practice’s specialty? 
  • Is the practice finding it challenging to maintain adequate billing staff? 
  • Are technological issues (software, hardware, IT, etc.) causing disruptions? 
  • Are billing operations taking away from the medical focus of the practice? 

While this is not an extensive list of questions, it is a decent beginning to figuring out whether outsourcing is best for a practice. If an owner answers yes to most of the above questions and others, outsourcing is likely a good choice for their operations. 

However, many operators need to come to terms with what outsourcing entails before signing a service contract. When a practice outsources its billing services, it means all day-to-day billing functions are handled offsite. Still, offsite management does not necessarily mean less or more restricted access. When hiring a professional and qualified service, an operator still owns the data. 

The Risks of In-House Practices and the Need for Change 

While there are several advantages to keeping billing services in-house, like greater control, ease of communication, and experienced billing personnel on-site, the practice must maintain such operations for the right reasons. Sometimes, an owner keeps an unsustainable in-house billing operation because of ego — the sense that no individual or service can handle operations better than themself. 

Confidence is crucial in business, but ego is detrimental. An inflated sense of self leads to slip-ups and operational errors that cost a practice more than funds; it costs longevity. Many businesses fail because of owner or operator mistakes. 

The decision to maintain in-house medical billing services is an acceptable option, and it might even be the right choice for some practices. Still, it is crucial to acknowledge that a decision made today is not set in stone. Operational needs change as a business evolves, meaning that while outsourcing might not be necessary today, it might be tomorrow. 

The Task of Identifying Potential Medical Billing Services 

If a practice determines that outsourcing billing services is a practical and acceptable solution, it must take the time to identify legitimate companies. The primary criteria for any medical billing service are certification and HIPAA compliance. 

Additionally, a practice should verify a service’s experience. While a company might claim 10 years in the billing industry, does that equate to 10 years of medical coding and billing experience? 

A qualified service should provide references that are comparable to the scope, size, and specialty of interested practices. The company should also explain the qualifications of its employees. 

Before hiring any service, the practice owner should ask to communicate with the individual who will be responsible for the account. It is best to schedule a meeting in person. The face-to-face interaction can help resolve any unmitigated feelings of doubt or uneasiness. 

A practice owner will require frequent updates and reports about the financial state of their business. It is best to arrange for the regular delivery of such information, typically weekly. Additionally, how will the service deliver the data — in person, over email, by phone? Knowing how a service communicates is essential to developing a working professional relationship. 

Finally, the owner will need to determine what items a prospective service handles. Not all billing service companies will deal with everything related to billing. Clarifying the specifics of a contract is necessary for avoiding any missteps. Most billing companies will make arrangements to meet the client’s needs, but those changes will affect the client rate. 

Medical billing is one of the most complicated aspects of operating a health care practice, and it is often the least enjoyable part of managing. As a medical practice owner, there is nothing wrong with searching for help outside of in-house teams. For help selecting and sorting through the numerous billing services available, contact Billing Direct, which provides a list of top medical billers based on specific practice needs. 

Types of Medical Billing Systems: Which One Is Right For You?

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The primary purpose of a medical provider is to improve the health of patients. However, medicine is also a business, and one of the most time-consuming and complex aspects of running a medical business is collecting payment for services rendered. This is where medical billing systems come in. 

What Are Medical Billing Systems? 

Medical billing is a collection of processes used by medical providers to create and send invoices or claims to collect payment from insurance companies and patients for services rendered. In the past, medical billing relied on paper systems, but now the majority of transactions are processed using medical billing services and software. 

What Are the Different Types of Medical Billing Systems? 

There are three basic types of systems: 

1. Closed 

A closed system centers on one medical practice and uses electronic medical records. EMRs are the digital versions of the paper charts most medical providers once used. In these systems, records are only accessible to personnel at one particular medical provider and are not shared with other parties. 

2. Open 

Open systems are more commonly used than other types of medical billing systems. These systems allow the transfer of records between different health care providers. 

In an open system, each patient has a unique electronic health record number. The patient’s EHR follows them from one provider to another. This allows each provider to review and update the patient’s records. However, because of privacy laws, only authorized parties with a legitimate medical purpose may review these records. 

Users of a closed system tailor records to the specific record-keeping style of one practice. An open system needs to be compatible with the systems used by other providers, and the records need to be standardized so that they can be understood by all parties who need to access them. 

3. Isolated 

With isolated systems, patients, rather than health care providers, control and maintain their personal health records. Patients may use these PHRs to update their records with various providers, but only the patient maintains a physical copy of the records. This system provides patients with the highest degree of privacy, but PHRs can not legally replace official records from health care providers. 

How Are the Different Medical Billing Systems Used? 

The setup of a health care organization often dictates which type of system it should use. 

Using a Closed System 

Closed systems use digital tools to manage patients’ health care records. Each patient’s EMR includes a record of all of the patient’s data, such as diagnosis and treatment plans, from a specific provider. While providers outside the practice can not access the records, different providers within the same practice can link EMRs to obtain a comprehensive view of a patient’s treatment plan. 

Health care professionals use EMRs to track when patients are due for checkups and preventative screenings. They also EMRs to monitor changes in patients’ vital parameters to identify health issues or adjust treatment plans and keep track of vaccination records. 

Using an Open System 

With open medical billing systems, all authorized persons, such as providers, billing teams, patients, organizations and third-party vendors, can access all or parts of a patient’s EHR. EHRs are more comprehensive records than EMRs because health care professionals from multiple practices can edit them.  

Patients’ entire medical histories are stored in their EHRs, rather than just their histories from a single provider. This makes it possible for patients to transition to a new provider or allow imaging centers and specialists to access the records without the patient needing to physically transport records from one provider to another. 

EHRs also make it possible for patients to easily view their records by accessing digital portals. Open systems enable third-party billing services to use records to process medical bills. Patient privacy is protected by requirements that all personnel with access to the records, including billing companies, maintain compliance with the Health Insurance Portability and Accountability Act

Using an Isolated System 

Isolated systems are maintained entirely by patients. PHRs can not legally replace EHRs or EMRs, but patients can use their PHRs as a reference to provide their medical details whenever they visit a new provider. They can also choose to share them with providers to assist with a diagnosis and treatment plan. Some patients maintain their PHRs using software tools that provide a means to transmit records to providers. 

Which Types of Medical Billing Systems Are the Best? 

If you are running a small health care business and you do not intend to use any third-party billing systems, a closed system may make sense for you. It is less complex than an open system, and there are fewer privacy concerns because only the people in your practice can access the patient’s records. However, it offers less flexibility, and you may need to convert to another system down the road if you want to use third-party services or collaborate with other providers. 

If you need to be able to collaborate with other medical providers or you plan to outsource your medical billing, you need to use open medical billing systems. There are more privacy concerns with an open system. However, EHR systems help to ensure compliance with HIPAA regulations by restricting access to EHRs to only authorized viewers. 

Isolated systems are generally used by patients who desire the highest possible level of security for their records. However, because their records still need updating, patients must be willing to self-manage their health care records and medical history. 

How Do Medical Billing Systems Impact Medical Billing Services? 

Outsourcing medical billing services can lower costs, increase efficiency and improve accuracy. However, to efficiently process medical bills, third-party services need access to medical records, which requires the use of open medical billing systems. 

We help match providers with billing services. We also provide information and education about medical billing services, medical billing software, medical coding services and medical billing careers. 

Visit us online to get quotes and find out more about how outsourcing your medical billing can save you time, money and frustration. 

A Guide for Chosing the Best Medical Billing and Coding Services

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The main purpose of medical billing and coding is to streamline the reimbursement measures of the healthcare system to ensure that providers are compensated for their services. Proper billing and coding are also important for patients to protect them from inaccurate charges. These services are essential for any facility delivering patient care.  

What Is Medical Billing and Coding?  

Billing and coding are not synonymous. They are separate activities within the reimbursement revenue cycle of healthcare.  

Medical Coding 

Coding involves the translation of health information and data into a universal alphanumeric code. Data can include:  

  • Diagnosis
  • Medical services
  • Procedures
  • Equipment used
  • Types of patient visits
  • Symptoms

The data is derived from patient charts, clinicians’ notes, and lab results, and then converted into codes that insurance companies can use to factor how much to charge patients and reimburse clinicians. 

There are several types of code sets that a coder can extract from healthcare data:  

  • ICD-10 Diagnosis Codes: This coding system is maintained by the World Health Organization and is divided into clinical modification codes for diagnoses and procedure coding system codes for inpatient procedures.  
  • CPT and HCPCS Procedure Codes: These go hand in hand with diagnosis codes to indicate the services delivered by a clinician. The American Medical Association maintains the Current Procedural Terminology codes, while the Health Information Portability and Accountability Act requires the use of Healthcare Common Procedure Coding System codes.  
  • Charge Capture Codes: These are typically derived from a list of the facility’s prices for each service offered. These prices are used to negotiate the reimbursement rates for claims with payers.  
  • Professional and Facility Codes: Professional codes capture the services rendered by clinicians, while facility codes capture the overhead costs of delivering clinical services.  

Medical Billing 

Billing uses medical codes to create claims for insurance companies to ensure that a clinician or facility is compensated for services. Medical billers must also follow up on these claims to confirm that recompense is disbursed. If the insurance company is not involved, then medical billers send these claims as an invoice directly to patients. The overarching goal of accurate billing is to protect and optimize revenue so that clinicians and healthcare facilities can continue their services and maintain their equipment.  

What Are the Requirements of a Medical Billing and Coding Specialist?  

First, confirm that your specialist meets standard criteria. The following are the requirements to become a medical billing and coding specialist.  


Depending on your state or institution, varying levels of education must be met: 

  • High school diploma and healthcare experience  
  • A post-secondary certificate in health information technology  

Certifications, Licenses, and Registrations  

Certain employers require certification prior to hiring or require prospective medical records specialists to become certified after being hired. Certifications can include: 

  • Certified Professional Coder
  • Certified Coding Associate
  • Registered Health Information Technician
  • Certified Tumor Registrar

To attain certain certificates, candidates may be required to pass an exam, complete an accredited program, and/or acquire coding experience in a work setting. Certifications typically need to be renewed regularly with continuing education credits.  

As well, your prospective specialists should have the following set of qualities:  

  • Analytical skills: Due to the intricate nature of translating healthcare information into accurate codes and claims, the ability to analyze data is very important.  
  • Attention to detail: Specialists must be precise and deliberate with their coding to maximize claims for reimbursement.  
  • Integrity: Specialists must protect patient confidentiality as required by law.  
  • Communication skills: Coders and billers are often required to interact with the clinical and administrative departments of a facility to retrieve patient data.  

What Are the Benefits of Outsourcing Medical Billing and Coding at Your Facility? 

If your facility uses in-house staff to cover your reimbursement revenue cycle, opting to shift these activities to a dedicated team of experts can provide many benefits.  

Quicker Insurance Eligibility Checks 

This allows your facility to understand a patient’s benefits sooner so that you are aware of what services are covered or need pre-authorization.  

Decreased Medical Coding and Billing Errors 

An outsourced reimbursement team specializes only in medical billing and coding and can invest more time to prevent mistakes from occurring.  

Protection of Patient Data 

Most billing services have intuitive safeguards in place to ensure that patient privacy is maintained. Hacking is a real threat to patient confidentiality and professional billing services have protective measures in place.  

Maximized Productivity and Service Delivery 

Third-party billing companies can analyze your patient database for historical patterns to help your staff address patient flow more appropriately. With less time spent on billing activities, your staff has more time to dedicate to patient care and personal engagement.  

Regulatory Compliance Maintenance 

If your facility is deemed noncompliant with governmental regulations, you can lose compensation for services rendered. A third-party specialist can assist your facility to stay on top of required compliance measures.  

Lower Administrative Costs 

With less time needed to invest in the training and follow-up of billing specialists, your practice can devote more resources to expensive items, like new equipment or renovations.  

Faster Claims Processing to Drive Cash Flow 

Outsourced medical billing services can process insurance claims faster and issue payment reminders to your patients to keep the reimbursement revenue cycle at your facility moving.  

What Are the Key Factors When Choosing an Outsourced Medical Billing and Coding Service?  

To safeguard your practice from inept outsourcing, look at the following elements before hiring:   

  • Availability and staffing capacity of specialists
  • Training procedures for specialists
  • Regulatory compliance history
  • Compatible coding software  
  • Cadence and content of billing reports 
  • Payer contract reconciliation 
  • Payment collection procedures  
  • Service fee structure
  • Current client roster

These factors can guide your decision on which billing service to choose for your practice.  

Where Can You Find Premium Medical Billing and Coding Services? 

At Billing Direct, we connect clinical practices with quality billing services. We understand the importance of precise medical billing and coding and we also believe that outsourcing these services can improve the overall patient care at your practice. Contact us for a price quote specific to the services you deliver. We look forward to partnering with you. 

When to Outsource: A Comprehensive Guide to Different Billing Providers

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In the health care industry, in-house employees do not always have the time or availability to keep up with billing processing. While billing is essential to all businesses, few share the challenges that health care practices face. Regulatory requirements, patient copays and insurance providers create a long process for practices to manage. Instead of burdening their staff with billing, physicians may choose to outsource to third-party billing providers. 

Understanding the Knowledge Billing Providers Offer 

While medical billing and coding go together, they are two different elements of the overall process. Understanding how complicated it can be to navigate billing underscores why experts in the field are necessary to ensure proper billing practices. 

Medical Billing 

Medical billers submit the bills to patients and health insurance providers. They use medical codes to communicate with the insurance providers about the types of treatment the patient received. In addition to ensuring that the bill is accurate, medical billers also ensure that the bills follow the requirements of the law. A billers job is to communicate with all parties and negotiate payment. Often, medical billing providers use the services of billers and coders. 

Medical Coding 

Medical coding changes every year. Staying up to date takes an effort that many hospital managers and employees do not have time for. Sometimes, managers have too many responsibilities to stress over an in-house team of coders in the facility. Physicians in smaller practices may not know a lot about medical coding. They cannot manage an in-house team realistically because they won’t know if the group performs to the highest standard. 

Medical coders assess clinical statements and assign codes using the classification system. During the billing process, physicians must submit claims to the insurance provider. The coder needs to check three different sources to find the correct codes. 

Coders use the 10th revision of the Internation Statistical Classification of Diseases and Health Problems (ICD), Current Procedural Terminology (CPT) and the Healthcare Common Procedure Coding Systems (HCPCS). The ICD-10 classifies diseases and illnesses, whereas the CPT classifies specific procedures. The HCPCS, on the other hand, covers any services not in the CPT. 

Choosing Between Types of Billing Providers 

The goal of medical billing companies is to submit health insurance claims and follow up on the claims. When working with third-party companies, understand that different types of providers adhere to everyone’s various needs. 

Not all practices are built the same, and neither are billing companies. Some services may fit small practices, whereas others may fit hospitals within an extensive network. For example, one facility may need billing support 24/7, whereas others have fewer patients and less need for around-the-clock support. 

Light Service 

Light-level service still requires the physician’s practice to have professionals in coding. The practice handles coding validation, eligibility checks, rejections and authorizations in-house. Many software vendors offer light service to health care practices. The vendor assistance is limited, so the hospital or practice needs to have someone available to move claims. 

Medical billing software automates the billing process. While the software is efficient and accurate, there is little personal touch. 

Full Service 

Many health care practices require complete services. A full-service billing provider is what it sounds like. The company offers comprehensive services to the facility. The health care manager does not need to have an expert in billing or coding on the team. 

The billing provider works for the health care company from the early stages of the revenue cycle. They provide technology and training to check demographics, eligibility, insurance card information and more during the check-in. Next, the company works with the practice and communicates how to handle denials or rejections. When rejections happen, billing providers may provide tips to avoid rejections from occurring in the future. 

With a full-service provider, an expert is available to answer when a facility has questions and concerns. Without consultations, it is easy to fall behind on billing and payments. 

Boutique Companies 

Boutique companies are more minor, specialized providers. When using a smaller company, the boutique may go beyond what standard claims submission and management companies do. They may offer more oversight or have specialties that health care facilities may have difficulty finding. If a health care company wants a billing provider to handle multiple components of the business aspects of health care, boutiques may be more appropriate than other businesses. 

Taking Advantage of the Benefits of Working With a Third Party 

Before a practice decides to outsource billing, they have to determine if it is worth it. The main advantages include providing the practice with more control and a more sustainable approach to the revenue cycle and preventing internal teams from becoming overburdened with billing tasks. 

Fewer Errors 

Medical billing can take up to 50 days from the service to receiving payment. Some practices may have outstanding claims for over 90 days. The more errors in the process, the longer it takes for the health care facility to receive payment. When outsourcing to an experienced, knowledgeable third party, the company should provide up-to-date services free of errors. Medical billing providers are on top of health care regulation changes. 

Fewer Costs 

Billing errors can cause a hit to a facility’s revenue. Additionally, when a hospital outsources, it saves on an in-house team. When managing medical billers in-house, there are various expenses. Hospitals need to pay for training, insurance, benefits, software and payroll. Outsourced billing naturally reduces fixed costs. 

Transparent Data 

Some managers fear outsourcing will take control out of the facility’s hands. The third-party team will still provide data on the payments, collection ratios and denial rates. A reputable and experienced company provides health care facilities with regular performance reports. 

Finding Billing Providers With Billing Direct 

Physicians cannot afford mistakes with hospital billing. To avoid an overworked staff and billing errors, hospitals and health care facilities may consider the help of talented, qualified third-party providers. Managing an in-house team may be complex and could overburden the hospital’s staff. 

At Billing Direct, we help connect health care managers with billing services. Our website contains information about medical coding and billing services, billing education and billing software. Check out our quote tool for billing providers, categorized by practice type. 


3 Reasons Why You Should Consider Outsourcing Your Healthcare Billing 

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If you’re a physician who owns a busy practice, you may be tempted to bring on an in-house specialist to take care of your medical billing needs. However, many experts believe that outsourcing your billing is the key to reducing stress, saving money, and running your practice more efficiently. Read through the three following reasons to determine whether outsourcing your healthcare billing is right for you and your practice. 

1. You Can Collaborate With Healthcare Billing Experts 

The medical industry, and especially the current coding and billing requirements, often changes rapidly. Outsourcing to professionals who make it their mission to stay on top of recent rules, regulations, and trends in the medical billing industry could play a large part in your practice achieving success. 

Medical coding professionals need to have a solid understanding of which codes to use for each patient and how to complete their job in a timely manner. If they are not completely dedicated to their jobs, the practice’s revenue cycle may suffer as a result. For example, if your in-house billing specialist is absent for two weeks, numerous patient codes may not be submitted to insurance on time. Even small practices submit multiple claims to insurance every day — and you will not get paid until they are submitted! 

2. You Can Experience More Consistent Healthcare Billing Results 

What happens when you hire an in-house billing expert? If this employee calls in sick, takes vacation days, or notifies you of other absences — whether or not they are unavoidable — you may be left anxiously wondering who will complete the billing and coding responsibilities that start the revenue cycle for your practice. 

Having only one or two people to complete this important job depends on them being at work consistently. If your main problem is that your medical billing is not completed on time, by outsourcing to a company with multiple billing professionals, you can experience more consistency and a lower stress level. 

3. You Can See Increased Profits and Higher Savings 

Outsourcing healthcare billing often results in a practice seeing increased profits and the ability to save. Though it seems counterintuitive, a small practice that employs one or two billing specialists may be spending much more of its budget on in-house billing than it would on outsourcing. When you combine this point with the ability to have a team of billing experts at your disposal with consistency and efficiency, outsourcing becomes the smarter choice. 

Get in Touch With Billing Direct  

Choosing whether to outsource your healthcare billing is an important consideration for physicians who operate busy solo or group practices. Consider the increased insight into the billing industry, the chance to save money and make higher profits, and the consistency that accompanies this decision before you decide to hire in-house. Contact Billing Direct today to learn more about the benefits of outsourcing. We staff professionals who are well-versed in thousands of unique medical codes, possess an understanding of online medical records, and strive to partner with you to make your practice all it can be.