Outsourcing medical billing simply ‘Outperforms’
A recent report by Grand View Research shows we are witnessing a rise in outsourcing of medical billing services by hospitals and physicians due to obligatory implementation of the complex ICD-10 coding system, increasing healthcare costs, and a federal mandate to implement electronic health records to maintain reimbursement levels.
Clinics and physician offices are realizing that in-house medical billing teams are not as efficient as an outsourced partner due to unnecessary costs and the burden of managing an administrative team to ensure effective handling of in-house billing functions.
Who’s hurting the most?
Doctors. All that hard work, long hours, and years learning their craft have gone to waste when the wrong medical billing team is at the helm by not compensating correctly. This is why choosing a results-driven partner to handle medical billing is crucial for long-term sustainability and growth.
It’s not just doctors that take a hit. Administrators, employees, and stakeholders within facilities hurt too. Time and time again, medical billing blunders have caused clinic closures, and mass layoffs. If not managed correctly that vicious cycle continues on.
A shift is happening
According to Healthcare Finance, more hospitals are outsourcing their billing, leading to a boom in the billing outsourcing market.
If you are reading this as a doctor or administrator, here is a list of 6 questions you should be asking your in-house team right now.
The Ultimate Medical Billing Questions
- What is our days in A/R?
- Sometimes you will have particular payers that are slow to pay, or maybe the denials are higher than they should be.
- Do we have a good rules engine?
- The rules engine scrubs claims to assure there are no errors before submitting to the clearinghouse then ultimately reaches the payer.
- How are we doing with patient collections?
- How are we handling this shift of patient responsibility?
- We are finding that the biggest challenge right now, and arguably in history, is the industry’s move to patient responsibility. It’s expected that 33% of revenue will have be collected from patients due to high deductible plans. We have talked to many practices on how they are trying to handle this shift. If a practice isn’t handling this well, it can show up in your KPIs for sure.
- Does our billing resource have coding knowledge? (certified coder)
- How are we staying up to date on the latest government regulations?
We ran the numbers… in-house vs. outsourced medical billing
From our experience, you need anywhere from .7-1.1 billing FTEs (Full Time Employees) per provider for billing and back office. In an outsourced model that typically drops to .25-.3.
An in-house billing department with three MDs would need two to three people to handle it effectively. This means a team that is consistently collecting all collectible dollars, effectively working denied claims, following up on A/R, and managing all payments coming in and reviewing charges going out. This does not count the front desk operations that need to be accounted for or the benefits and liabilities of each employee.
In an outsource model you could have one person doing everything needed for back office without the liability and benefits tied into headcount.
Testimonial from our clients
When a Florida hospital saw no insurance collections for months, it faced potential closure. No claims had been submitted, and the in-house billing department claimed ignorance. With the billing system unable to generate reliable reports, and no electronic health records system to provide guidance, administrators were at a loss to explain the drought.
The team from Medical Claims Consultants (MCC) was hired to conduct a revenue cycle audit. They found dozens of file boxes strewn about the billing department. Medical records, face sheets, and encounter reports had been neither prepared nor submitted.
After 30 days, a complete audit organized the paperwork, including all supporting documentation. MCC prepared for submission $800,000 in still-current claims. Lost, however, were untold thousands of dollars in delinquent claims that had aged out.
But thanks to MCC, the hospital returned to positive cash flow.
Here’s how we can help
Would it be helpful for us to look at all your KPIs, and see if we can determine if there are some areas that we specifically could look at improving for you? If so, contact us today. We will conduct a FREE revenue cycle audit to get you started