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What is Medical Billing Offshore Outsourcing?

Author: Gretel Digo

Posted: September 27, 2016

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Medical billing offshore outsourcing involves hiring a third party to handle medical billing tasks.  Medical billing is the process of submitting claims to insurance companies to ensure that physicians and other medical professionals receive payment for services they have performed.  Medical billing professionals translate paper or electronic medical records into standardized codes that are used to bill patients and payers.  The process is essentially the same for both private and government insurance companies like Medicare. 

Medical billing is an important stage of the healthcare revenue cycle.  Because multiple interactions among the healthcare provider, insurance company, and biller are involved, the medical billing process can take several days or months to complete.  Changing regulations also add to the complexity of the billing operation.  Skilled medical billers can optimize revenue flow for healthcare providers by shortening resolution times and reducing the number denied claims.

Medical Billing and the Healthcare Industry

Medical billing has relied on paper documents for many years, but health information systems software has changed all that.  Today, most healthcare organizations have some form of electronic medical record (EMR) capability, and the government is giving incentives to those that will make the switch from paper-based records to EMR.  Health information systems or health management software facilitates processing of large-volume claims, helping organizations optimize revenue cycles.

All healthcare organizations in the United States will transition to the ICD-10 (International Classification of Disease 10th revision) coding system in late 2015.  The ICD-10 replaces the ICD-9 code set and increases the number of billing codes to about 68,000, and the expansion is expected to create a strong demand for trained medical billers and coders.  In fact, the U.S.  Bureau of Labor Statistics reported that there is already a shortage of medical coding professionals of about 30 percent.  The Department of Labor estimates that demand for medical billing and coding professionals will grow by 22 percent by 2022.

In addition to new jobs created by employment demands, there will also be open medical billing positions as people leave the profession or retire.  Other growth drivers are the aging population in the U.S.  that will increase the number of treatments and procedures, and the demand for professionals that act as intermediaries between insurance providers and healthcare organizations.

Medical Billing Professionals

Medical billers and coders are responsible for submitting and following-up claims to healthcare insurance agencies.  The daily duties of billing professionals vary with the type of facility, but medical billers generally gather all billing-related information and send them to insurers.  Billers must know how to read paper or electronic medical records and understand different medical codes.  Billers must also communicate regularly with medical professionals and insurance agencies to obtain required information.

Although not required by law, medical billers in the U.S.  are encouraged to become certified by taking an exam.  New requirements by health insurance companies have also made specialized training necessary.  Several schools and institutions currently offer training and education in medical billing and coding.  These schools aim to provide the theoretical foundation for people wishing to make a career in the medical billing field.  Training and certification also allow current medical billers to gain advanced skills to increase their salary and help healthcare providers optimize revenue.

Outsourced Medical Billing

According to a recent study, global healthcare provider outsourcing is expected to grow at a very rapid clip (31.9 percent from 2011-2016) due to the transition to the ICD-10 coding system.  Healthcare payer outsourcing will also grow at about 30 percent compound annual growth rate (CAGR) during the same period.  The U.S.  is the biggest source of outsourcing activities in the healthcare BPO industry, followed by Europe.  Top outsourcing destinations include India, the Philippines, and China.

The Affordable Care Act (Obamacare), rising cost of healthcare, lack of skilled talent, and value provided by third parties are driving buyers to outsource medical billing. Outsourcing firms employ skilled talent and have the capabilities to perform routine billing and coding work, as well as other back-office tasks for growing practices and companies that lack resources.  Both healthcare insurance companies and healthcare organizations are looking at outsourcing as a viable option to gain competitive advantage. 

When done in-house, medical billing can be very time-consuming and expensive.  Having an internal billing department means investment in overhead, salary and benefits, training, technology, infrastructure, and supplies.  Medical Billing offshore outsourcing is significantly less expensive than in-house medical billing for startups and small healthcare companies.  For midsize and larger organizations, outsourced medical billing provides immediate access to skilled talent, best-in-class billing technology and processes, as well as end-to-end BPO services. 

Medical billing offshore outsourcing is helping organizations streamline their operations, reduce risk, improve patient care, and reduce costs.  Outsourced medical billing also allows organizations to focus on their core activity, keep up with changing regulations, improve collections, and improve revenue flow. 

Outsourced Medical Billing Services

Medical billing firms typically provide billing and accounts receivable management services to hospitals, physician private practices, and other healthcare organizations.  They specialize in billing, coding (CPT, HCPCS, ICD-9/10), claims processing, and receivables management.  Commonly outsourced medical billing services include paper and electronic claims submission and tracking, claims review and scrubbing, denials and appeals, payment posting, refiling and secondary filing, call center services, and revenue cycle management.

Claims Submission

After every appointment, the physician or healthcare provider sends a bill to the insurance company.  The insurance company compares the patient record with the policy to determine if the procedure or test is covered.  If the procedure is covered, the insurance company sends payment to the physician.  If the procedure is not covered, the patient is responsible for paying the remaining balance. 

The medical biller gathers information about the patient, procedure, and insurance policy before preparing the bill.  The medical biller then fills out the standardized claim forms with the beneficiary’s name and address, NPIs, certification numbers for certain tests, date/s and quantity of service, and other required information.  The forms also include valid diagnosis codes, procedure codes, level II HCPCS codes, and applicable modifiers.  Once completed, the claim is transmitted electronically, sent by mail, or delivered in person to the insurance company.  The biller saves the acknowledgement of the health insurer’s receipt.

Claims Scrubbing and Verification

Outsourcing firms use advanced software to verify and ‘scrub’ (clean up) claims forms before they are submitted to insurance agencies.  Claim scrubbing software validates codes and modifiers, medical necessity, usage (age, gender, units), format, dates and place of service, reimbursement, and revenue.  Scrubbing software allows medical billers to upload one claim or a batch of claims and receive reports in seconds. 

Scrubbing and verification aim to reduce errors and decrease claim denials.  Scrubbing detects potential problems prior to submission and alerts the biller to make immediate corrections.  Through a comprehensive screening process, scrubbing validates denied claims for recovery and to recoup lost payments.  It also reduces claim turnaround time, overall A/R days, and costs associated with rejected and resubmitted claims.

Claims Appeals and Denials

Claims denial and appeal services are designed to appeal, track, and manage denied claims.  Medical billers ensure that denied claims are not automatically written off or ignored.  There are different types of denials; some are easy to spot in paper or electronically, but others appear as line items with little or no information.  A skilled medical biller has the expertise to get the denied claim paid through various denial management strategies: reworking, resubmission, correction of a coding issue, and submission of additional documents from the patient or physician.  Some outsourcing firms assign staff members to handle specific payers or specific denials for maximum efficiency.

Accounts Receivable (A/R) Follow-Up

Outsourcing firms offer A/R follow-up to speed up and increase revenue collection.  A/R follow-up starts after the medical biller sends insurance claim forms to the insurance company.  The follow-up timeframe depends on how long since the claim has been submitted and the transmission type (electronic or paper).  Follow-up for electronic claims typically starts 10 days after submission, while follow-up for paper or HCFA claims starts 20-45 days after submission.  Follow-up can be done online, through telephone, or by mail.  The follow-up can be sent in response to a no remark or no status claim, or to any unpaid claims due to authorization, referral, non-participation, medical necessity, terminated insurance, and other reasons.

Payment Posting

Payment posting is the process of recording payments in billing management software manually or automatically.  Automatic posting of electronic insurance payments can be done for post-insurance checks from EOBs, ERAs, patient payments, and print receipts.  Effective payment posting involves reading and analyzing explanation of benefits (EOB) forms before entering details into the billing management software.  Payment patterns alert billing departments and help them collect outstanding receivables easily and quickly.

Revenue Cycle Management

Revenue cycle management (RCM) refers to the entire process of registering patients, verifying insurance and benefits, capturing charges, and processing claims.  Some outsourcing providers provide end-to-end revenue cycle management for private practices and large healthcare organizations.  Outsourcing firms bring in best-in-class accounts receivable management processes to ensure that the client is receiving payment from insurance companies and patients in a timely manner.  The outsourcing partnership usually begins with a detailed evaluation of current billing practices and identification of issues, such as lengthy A/R, and high number of write-offs, denials and adjustments.  The provider then creates a comprehensive solution to address specific problems and help the client achieve their billing goals.

Getting Started on Medical Billing Offshore Outsourcing in the Philippines

Learn more about outsourcing in the Philippinesoutsourced staff leasing and the Philippines as an outsourcing destination. 


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