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.
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 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.