Why Outsourcing Medical billing Service is a Good Idea?

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.

Why to Outsource Your Medical Billing?

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.