Besides providing their patients with the highest quality of care, the main thing all physicians want to do is maximize their revenue cycle management (RCM) and generate the largest amount of net revenue possible. Unfortunately, things like coding compliance, claims denials, and increasing technology expenses make this goal challenging.
However, with solid strategies, smaller providers can maximize their RCM and increase their bottom line. Here are seven ways to do just that:
1) Treat RCM Compliance Seriously
As more providers and health systems are hit with audits, it becomes even more import to treat compliance seriously. Accurate billing has taken precedence since the transition to ICD-10 and it’s more important than ever to ensure your billing team has realistic expectations. Read more here
While discussing the matter of medical billing in regards to any clinical practice, generally you come across two distinct opinions. Firstly, there are those who believe that the responsibility of maintaining financial workflows of a practice lies with the clinician, alongside managing other administrative and clinical aspects of the practice. On the contrary, there are physicians who believe in providing uncompromising patient care, which is why they prefer outsourcing their medical billing to an expert organization. It’s difficult to establish which option is better since both arguments have their inherent pros and cons. Let’s try to determine which option is a more viable strategy to implement within your practice.
The foremost argument for advocates of accommodating an in-house medical billing department is ‘why pay someone for a job that you can do on your own?’ One may regard this as a valid consideration due to the expense incurred by hiring an expert medical billing service. Everybody dislikes money going out of their pocket without an advantageous trade off; so the million dollar question arises, what gains are acquired from the transaction considering option number two?
Surveys and polls have elucidated that overall efficiency of a practice including the clinicians’ productivity have substantially increased once the billing processes have been outsourced to a specialized medical billing service. The fundamental reasons for this phenomenon as cited by these surveys are improved revenue cycles and efficient claim management. A diminished number of rejected claims inevitably results in greater earnings for the practice.
“It’s a mystery why some physicians still opt to have in-house billing. This appears even more ludicrous viewing the exceptional positive impact that outsourcing to a medical billing service has on your practice’s finances. For those who consider their practice to be primarily a business, the argument of saving money by having in-house billing is flawed in my opinion. In comparison you spend more money in hiring trained professionals, or hiring novices and training them. Moreover, training your supplementary resources to perform these functions consumes valuable time. Your revenue cycles are unnecessarily extended and you do not have the resources at your disposal to process the maximum number of claims possible”, according to an Ohio based health IT consultant.
If you inspect closely whilst making a comparison, eventually both time and money are conserved if you outsource your medical billing to an expert and proficient medical billing service. Since a much larger number of claims are being processed, even a small percentage paid to a third party billing company eventually translates into a greater profit for your practice. Furthermore, since all financial responsibilities and intrinsic concerns are outsourced, it gives the physician more time on their hands to focus on their primary responsibility of ensuring delivery of quality care. When all is said and done, the number of clinicians outsourcing their medical billing speaks volumes for its benefits. Specialist medical billing services are making a huge statement through their performance and paving the way for the future of healthcare industry at large.
In any organization, the finance department is of prime importance as it involves revenues. However, in this race of survival of the fittest, leading organizations are so busy in their core business concerns that they are not left with any time to look after their revenue cycle. In today’s world, as the service industry is growing more than any other industry, companies are more interested in satisfying their customers. However, it needs to be realized that if revenues are not managed properly, businesses won’t be having enough funds to continue their operations at full capacity. Same is the scenario in the health industry where physicians are fully occupied with their routine work that it becomes extremely difficult to maintain revenue cycle in a regular manner.
Therefore, in order to channelize the revenue cycle, care providers have started outsourcing their Medical Billing Service to external billing specialist companies. Revenue cycle management is an intricate process that involves the verification of insurance eligibility, medical coding, Medical Billing, claims denial management, and ensuring timely inflows. In order to gain most from it, specialists are required to execute this complex process. The basic aim of efficient revenue cycle management is to waste as little time as possible and maximize practice revenues.
Business Process Outsourcing (BPO) is turning out to be a leading management fashion. Of course, the increasing popularity of outsourcing Medical Billing is linked to innumerable advantages it holds. By outsourcing billing to an external partner, healthcare providers enjoy streamlined revenue cycle, specialist services, low costs, reduced hassle, and faster revenue collection. In addition to this, as compared to in-house billing, there are low infrastructure costs, employee costs and lesser overheads.
Due to the aforementioned advantages, the trend of outsourcing Medical Billing Service is expected to increase in the future. However, before outsourcing such an important department, healthcare providers must check the skills and knowledge of the employees of that billing company.
In order to address the increasing problems faced by the healthcare industry today, physicians have adopted the trend of outsourcing medical billing service. Industry experts have marked it as a management fad that has enveloped the healthcare sector as well. Just like outsourcing any other business, medical billing is being outsourced due to several advantages associated with it. In order to get a better understanding of its advantages, it is important to know what medical billing teams actually do.
Such teams of professionals’ apply a number of skills in order to process claims on behalf of hospitals, physicians, and other institutions. These personnel are well conversed with market and industry knowledge which helps them to ensure the accuracy of medical data. They store information and transfer it accordingly to make sure it’s compliant with the Security and Privacy Rules of the Health Insurance Portability and Accountability Act (HIPPA). Billing teams apply their analytical skills to find any loopholes in the current system and endeavor to find a suitable remedy to fix it before it worsens.
By outsourcing medical billing service, physicians are transferring their load to personnel who are specialized in this particular field. These professionals know the ins and outs of medical billing system and cater to all the problems in the best possible way. Moreover, if physicians outsource medical billing service, they reduce their overall expenses by not having a separate department for Billing. Otherwise, establishing a separate department means allocation of extra resources in the form of space, technology, and human resources. By outsourcing, physicians can ensure compliance with the industry standards through working on the advanced technologies of the external partner. Then, most importantly, outsourcing medical billing service helps in reducing the number of claim denials hence, expediting the revenue cycle.
According to a leading physician who outsourced his medical billing service just recently, “due to my busy schedule, completion of billing process took a lot of time. This resulted in delays in payments and affected my overall cash flows. However, outsourcing it to an external partner increased my turnaround by many folds”.
Therefore, in order to achieve the optimum level of profitability, it is important to outsource the medical billing service to those who do it best. By doing so, physicians would not only experience an increase in their revenues but would also be able to focus more on their core job.
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.
Medical professionals continue to struggle with ever changing reporting requirements. As the healthcare industry moves towards performance driven reimbursement it is likely to continue to grow. However, outsourcing billing is not an immediate answer. Electronic documentation with the aid of EMRs has moved things in a positive direction as it drives evidence based documentation and simplifies data transmission between providers and payors. With almost 57% of office based practices now utilizing EMRs, medical errors are likely to reduce over time which should result in more accurate documentation and reduced number of denials.
While completeness of documentation carries importance, most practices are able to improve returns by maintaining a consistent relationship with payors. An efficient billing team is likely to remain on top of changes in regulations and payment criteria which results in better claim management. Claims are likely to be denied on the basis of errors in medical billing and coding or if services rendered are not covered or considered as irrelevant. However, with regular analysis the billing team can identify risks and create an appropriate plan through continued learning of the practice.
Account receivables need to be consistently monitored. Most practices choose to utilize the aging scheme method by pooling accounts of a certain age and devising an age specific strategy. Different follow-up standards could be devised based on the materiality of the amount owed and the age of the receivable. If the account is due over 120 days, there is a good chance its due to an error either by the practice or the insurance company. Almost 19% of the claims denied can be attributed to errors by the insurance company.
An age of 120 days is unfortunately common for providers, as almost 10% of accounts receivables for most practices are likely to be above that figure and have to be written off as bad debts. Medical billing companies are slightly more aggressive in their approach, which can sometimes pay off where internal billing has been inefficient. Practices suffering from aged accounts are likely to gain more by outsourcing to an efficient medical billing service especially since most medical billing companies charge their clients based upon their collections.
Medical billing or revenue cycle management is an integral component of practice administration. The better a practice manages its billing, the better it gets paid. Given the regulatory and compliance challenges within the healthcare industry, physicians today are overburdened as it is and thus require an efficient billing manager to manage the day to day operations swiftly. However, most solo practitioners unfortunately lack the resources to employ expert personnel and in such cases have to manage the process themselves.
The initial development in health IT was in fact to provide a solution that would resolve the problems associated with medical billing. This is partially the reason why you might find a practice management system but not an EMR in most practices. Payors are not charitable organizations working to make the world a better place; they are businesses developed with the purpose of earning profits. As the healthcare industry rapidly moves towards evidence based practice methods and performance based reimbursement, EMR billing becomes essential. While payors may remain reluctant to reimburse claims, having quality documentation processes will undoubtedly expedite the process.
Established EMRs offer e-billing and claim management built-in to their solution with physicians stripped for cash opting to utilize these systems themselves or have the office manager take care of it. While e-billing simplifies the process it can still be taxing, hence outsourcing this process to a team of specialists becomes a viable option. In comparison to having an in-house team, an outsourced billing process does in most cases prove to be more cost effective. In a study by software advice, collections are likely to improve by 10% through outsourcing. While costs may decrease slightly in the initial period, they are likely to equalize to that of employing an in-house team in the longer run.
Outsourcing models such as pay-as-you-go are more likely to attract attention, with a fixed percentage of the eventual reimbursement that physicians receive. This ensures that the provider does not have to make payments when short on cash. However, reduced cost is not the only benefit; providers that start up can benefit more from such services as they do not have to recruit their own back office departments. Outsourcing also works for physicians that do not want to deal with the business side of running a medical practice. Lastly, outsourcing eliminates workflow disruption that may occur due to staff turnover. The billing process is likely to become more complex over time, thus outsourcing is likely to become a practical option for practices of all sizes.