In the USA, around 8-13% of healthcare providers’ claims are denied by the payers only due to missing and incorrect data. This, along with huge backlogs, longer turnaround time of claims and sloppy follow-ups eat into a healthcare provider’s revenue.
As a medical group or physician’s practice, should you be looking at your numbers to decide how to move forward. To outsource medical billing or not. Let’s discuss.
When should you consider outsourcing?
• Late filing of claims
• Inefficient handling of claims and denials – Denial rate is more than 5%
• Rising cost
• Poor AR management – 95% of your A/R is not collected within 60 days
• Staff issues – Sick leave, accidents, employee turnover! If your only staff is on leave or absent for any reason, billing will pile up and be delayed
Timely and accurate claims submission: The billing companies pride themselves on a “clean claims” proportion approaching a hundred percent. Claims are not denied because of late submission. Quick submission and reimbursement contribute to the practice’s revenue cycle management.
Expertise: Claims have to be submitted to private payors, Medicaid and Medicare, CHIP, ACA, Workers’ Compensation, Veteran Affairs, and others. Each of them has different and rigid rules and protocols. Billing companies have staff that excels at knowing the rules and keeping track of changes to the rules and regulations.
Denied & rejected claims management: Inevitably, some claims will not be paid on the first presentation. Medical billing company staff will promptly resubmit rejected claims after correcting the deficiencies and effectively appeal denied claims.
AR Follow-up: Follow-ups need to be streamlined and prioritized to achieve maximum effectiveness. The billing company will ensure consistent follow-ups.
Dependable efficiency: The bills will always be submitted on time and followed up as necessary.
Performance metrics: A billing and AR specialist will take pride in their work and report to the practice regularly. Part of their report will be the performance metrics – Gross Collection Rate, Net Collection rate, Percentage of AR older than 60 days, AR Days, Contractual Variance, Denial Rate, etc.
The billing company will also be able to inform the practice about the payors with the slowest payments, and those with high claim denial rates.
Economy: Employing billing staff entails expenses on salaries and benefits. A medical billing company is paid a fixed proportion of the bills collected by them.
Considerations when outsourcing medical billing
Typically, medical outsourcing companies charge a commission on the amount collected. Make sure you understand if there are any hidden charges. Practice Management software is used to manage the billing and EHR. Make sure it’s HIPPA compliant. Establish a reporting system to keep updated and set up monthly meetings with the vendor to stay on top of things.
Medical billing companies are experts in their field of work. Their income and therefore their survival depends on how well they handle your medical billing. It is precisely their job to ensure that all your bills are reimbursed. Most importantly, since their income is a proportion of collections, they are incentivized to collect more.
You as a practice owner clearly don’t have the bandwidth to supervise the billing process; your clinic staff may not have sufficient time to keep a track of the rules of various payers and the frequent changes. Also, it has been shown that practices that outsource the complex and demanding tasks of billing and AR management usually have less stressed out staff and better reimbursement rates.
Outsourcing to medical billing companies gives you the advantage of expertise and manpower. Additionally, it is more affordable to outsource your medical billing and AR management. So weigh the pros and cons and decide according to your needs.
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