Medical practices are faced with the choice of outsourcing the revenue cycle management process, or managing that function in-house with medical billing systems. Assuming your practice has chosen to outsource the billing function, there are important steps that you can take to make the right choice among the numerous medical billing service companies that are currently out there.
During the selection process, medical practices need to evaluate, at the very least, a billing company’s criteria for: the level of service they can provide, their experience within the industry or your specialty, how they use technology, the different pricing models they offer, and their capacity to take on new clients. The better you, a physician, can judge a medical billing service provider, the better you can match your needs to what the provider can offer, and the more benefits your practice can reap. Ultimately a well-matched selection will significantly decrease the time spent on billing issues, and increase the time spent on patient care. Third party service providers can do a world of good for you, or can cause a world of embarrassment, tarnishing your community image and reputation.
A medical billing company should be able to take over most necessary billing functions of a medical practice, including: from claim generation and submission, carrier follow-up, payment posting and processing, patient invoicing and support, and collection agency transfer services. Service providers excel (and can offer the most benefit) compared to a practice’s in-house staff in the areas of following-up with insurance carriers and pursing denied claims. Other services that billing companies offer include credentialing, medical coding, transcription, insurance eligibly verification and appointment scheduling- however, with more services, come higher fees. Physicians must strike a balance between the costs and benefits of outsourced services- some functions might still be better off done in-house by staff.
There are many questions/ issues to work through as you are narrowing down the selection of a billing service company. The first step is for the practice and the service provider to come to an agreement on the level of service that the practice is seeking, and match that with the services a billing company can provide. What level of service does your practice need? Do you need a billing company that can efficiently handle denied claims, or will that function fall back onto you? If the billing company does peruse denied claims, you will want to know what procedures they have in place to do so and ensure they aren’t just paying you lip service. How will the billing company follow-up on customers that don’t pay their bills? Many billing services will correspond with patients regarding billing issues, which can be a great relief to medical providers. When a physician hands over sensitive patient information to a third-party, will they ensure compliance with HIPAA? The billing service must protect patient privacy to the same degree that the provider does. What other services and benefits can a medical billing service offer to your practice to position it in the market? Billers should have business insight that the physician’s office staff doesn’t. Physicians want to ensure that their billing service can assist in reporting and analysis and provide valuable feedback on improvement possibilities; not just send a one-page financial statement each month.
Choosing a billing service with experience goes well beyond the mere number of years they’ve been in business. Physicians should look for billing services that not only have experience with Medicare and Medicaid, but also have direct industry experience with their office’s specialty. Choosing a service with staff members that are certified by the American Medical Billing Association (AMBA) is important. The AMBA offers certifications that promote professional medical billers with knowledge in the areas of ICD9, CPT4 and HCPCS Coding, medical terminology, insurance claims/ billing, appeals/ denials, fraud/ abuse cases, HIPAA/ Office of Inspector General (OIG) Compliance, information/ web technology and reimbursement.
Medical billing companies should not only be staffed with knowledge members familiar with your practice, but also well versed in current technology, and resourcefully utilize up-to-date software to accomplish more with less. A provider will want to know specifically the policies and procedures the service provider has in place regarding information sharing, data security, recovery procedures and data backup procedures. Choosing a medical biller that efficiently employs technology, brings together the gap between profit and loss. The gap can be even closer if the service integrates with the office’s electric health records (EHR).
How will you be billed for the services provided? Billing companies can offer a medical practice three types of pricing options for their services- with different cost savings depending on your individual practice structure and needs. The most common model is the percentage based pricing option, where the service will charge based on a percentage of collections, gross claims submitted, or of total collections. The upside to this option is that the success of the billing company is tied to the success of the practice; however, smaller claims may not be perused by the service as aggressively, due to the lower payoff. A fee-based pricing model is when the service charges a fixed dollar rate per claim submitted. This model is potentially the most cost effective choice, but can offer less incentive for the billing service to follow-up on denied claims. The third pricing model is a hybrid of the percentage and fee-based options. With this model, the service charges a certain percentage basis for certain carriers or balances and charges a flat rate for others. This mixed option, like the flat rate option, is potentially more cost effective, but, also offers less incentive for the service to follow up on certain claims.
The last minimal criteria by which a medical practice will want to elevate a potential billing service, is in their capacity to take on new clients. Much of the payoff to a practice for outsourcing the billing function comes from pursing denied claims and fee collection; so, if a billing service doesn’t have the capacity to effectively follow-up with outstanding bills, the resulting benefit to the physician office will be minimal. When evaluating the service’s performance and ability, it’s important to keep in mind the number of years they have been in business, the number of professionals the service employs, their reporting structure, the number of clients they currently serve (by specialty), the gross number of billings they can handle and the number of claims they are able to process annually.
If you’ve decided to outsource the billing process, you may want to dig a little deeper into how the medical billing service provider can provide more than just the basic benefits to your practice. You will want to delve into a number of “quality” metrics about the billing company; including their average number of days in A/R by specialty, their coding/ submission and follow-up delay metrics, by what percentage they’ve been able to increase revenues for their existing clients, and by what percentage they’ve been able to reduce payment delays.
Thoroughly evaluating both your practice’s needs and the services that a provider can offer can help you make a more informed choice. The value in outsourcing the billing function will lie in whether or not the provider can achieve goals in line with not only keeping your practice thriving today, but help it remain competitive in the future. This is your practice, and your livelihood depends on the revenue it brings in! Take caution and chose wisely.