Welcome to the start of a new series, where we discuss some prevalent medical billing trends, and what they mean for your organization! Let’s start off this discussion with the concept of practices outsourcing their medical billing. This trend has skyrocketed in popularity over the last decade or so, and isn’t going away anytime soon. So, why do practices outsource their billing function? Let’s analyze a few key reasons.
Medical billing requires extremely specialized knowledge of complex billing codes, regulations, and compliance requirements. Outsourcing to a dedicated revenue cycle management firm ensures you have the most highly-trained professionals in your corner handling your practice’s billing, and is a good way to promote more accurate billing and timely revenue cycle management. Many practices try to get by with novice billers, and the results are often disastrous. By outsourcing revenue cycle management, you delegate your billing to the most qualified experts, which is quite attractive to many practices.
2. Potential Cost Savings
Another major reason practices look to outsource medical billing is to take advantage of potential cost savings. By outsourcing your revenue cycle management, healthcare providers can avoid the costs of hiring and training a high-level in-house billing staff, purchasing billing software and equipment, and maintaining an infrastructure to support billing operations.
However, it is important to note that when you outsource, you tend to get what you pay for. If you choose a lower-cost outsourcing provider, you will likely receive lower-quality services, which can cause substantial problems downstream. If you partner with a top-of-the-market provider, you may not be realizing any up-front cost savings at all, but will have a better team in your corner. It is critical that you keep this calculus in mind when deciding whether outsourcing is the right choice for you.
3. Increased Efficiency
The opportunity for increased efficiency is another major reason practices look to partner with outsourced revenue cycle management companies. Outsourced billers often have more streamlined processes and technology than individual healthcare providers. This can result in more timely claims processing and payments, reducing the time and effort required to manage billing operations. Better processes also means increased accuracy, and helps you increase revenue.
Additionally, when you take RCM off your practice’s plate, you also reduce incoming calls to your office, freeing up your staff to handle other tasks that more directly affect patient care and improving the patient experience. When outsourcing billing, you also won’t need to worry about any interruptions to billing if a member of your internal team calls in sick, goes on vacation, or resigns.
Lastly, the issue of compliance. Medical billing companies stay up-to-date with constantly changing healthcare regulations and compliance requirements. It can be easy for your staff to fall behind, especially if they have other tasks on their plate. By outsourcing, healthcare providers can often reduce their risk of non-compliance penalties and lawsuits.
Why Do Your Own Billing?
So, with all of this in mind, what’s the argument for doing your own billing?
First and foremost, control. If you outsource your billing, your RCM partner becomes an extension of your practice, and plays an integral role in the way in which your practice is perceived. If your billing partner starts missing the mark, that reflects negatively on your practice in a way you really cannot control.
There is also the issue of complete dependence. If a practice dissolves its RCM staff and completely outsources the function, it becomes completely reliant on its billing partner. What happens if your billing partner goes out of business, and you don’t have any in-house staff capable of overseeing billing?
Outsourcing the billing process also causes your practice to lose some visibility in regards to reporting and data, which can make the path to improvement considerably less clear. Make sure you are closely monitoring timely filing of claims, days in A/R, timely reimbursement, appropriate reimbursement, and ensuring timely follow-up on denials to ensure your billing partner is hitting the mark.
As we touched upon earlier, there is the issue of quality, as well. When organizations outsource, they are typically looking to realize cost efficiencies. However, when you choose lower-priced outsourcing options, you may recognize cost-savings up-front, but your billing quality may suffer, potentially damaging your relationship with your patients. Many outsourcing organizations also make use of overseas staff, and there can be a bit of a language barrier at times. This can occasionally frustrate patients calling in to check on their bills.
Lastly, there’s the issue of confidentiality and security. You are passing over protected health information or PHI to a third party that is not your practice, or insurance. You must be sure your patients are aware of this movement of data, and that your billing partner takes proper compliance measures to ensure your patients’ data is protected (signing a BAA is a must).
What Does This Mean For Your Business?
As a medical practice, you must carefully weigh the pros and cons of outsourcing billing. If you are struggling to tackle billing on your own, outsourcing may make sense (check out some of our partners)! However, if you are doing a good job billing internally, there is likely no need to outsource this process unless considerable cost savings can be realized, without seeing a dip in quality. Investing in your own team is never a bad decision. By equipping them with great software and providing expert training, you can get exceptional results from internal billing. Always keep your options open, and realize that outsourcing is not a fit for every practice.
If your organization is looking to get the most out of its medical billing process, we can help. EZClaim has been the medical billing software of choice for practices and RCM firms alike for over 25 years. If you are interested in learning more about how we can help your business improve its billing capabilities, schedule some time to meet with our team!