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.