Whether to outsource the billing operations to an independent medical billing company or opt for an in-house billing department is often a dilemma faced by most physicians. Looking at the basic principles of economics, the law of comparative advantage states that it is always beneficial to provide or avail a service that optimizes the cost structure. Providers should apply the same principle when faced with the aforementioned dilemma.
Physicians today are inundated with various challenges posed by modern day regulations in the healthcare industry. Thus given the time constraints, managing the day to day practice operations becomes increasingly cumbersome, especially without an efficient billing manager. Recent surveys also indicate that hiring additional resources for billing can result in an increase in practice expenditure and overheads, especially for smaller practices. However, outsourcing billing operations to third party medical billing companies is proving more effective for these practices, with providers able to benefit from experienced and knowledgeable resources at an affordable cost – usually a percentage of the collections.
Nonetheless, experiencing reduced costs is not the only benefit of outsourcing your billing. There are often cases where claims have been rejected because of errors in coding along with unnecessary delays. Having a specialist biller dedicated to streamlining the revenue cycle can reduce such errors and ensure quicker turnarounds, ultimately improving practice cash flow and profitability. According to a study conducted by software advice, an outsourced billing service is likely to increase collections by up to 10%.
The chances of fraudulent occurrences in-house are eliminated, when a third party is contracted to manage such operations.. As these companies charge a percentage of the actual collections for each provider, they need to ensure timely and efficient collection in order to bill higher. Managing these operations for multiple clients, they can easily spot discrepancies in financial workflows and provide detailed performance reports to each client on a regular basis. Today, most established billing companies also provide comprehensive financial analysis on a periodic basis and recommend strategies to enhance profitability.