It is a time of great change for the healthcare industry. The ICD-10 transition, payer audits, and the emphasis on accountable care organizations (ACO) are putting pressure on healthcare companies to seek innovative ways to stay profitable while providing exceptional patient care. Outsourced medical billing is one solution that both small and large practices are increasingly adopting. According to a 2014 Black Book survey, 42 percent of small physician practices hope to offshore outsource medical billing by transferring billing functions to outside experts to reduce costs and increase collections. Most hospitals also outsource some part of their revenue cycle activities for strategic reasons.
Outsourced medical billing is not for everyone, however, and the case for keeping billing functions in-house remains strong for some practices. Outsourcing works if it increases net collections and revenue. If your billing department is performing well financially, then it may be a good idea to manage it internally. However, there are times when outsourced medical billing is a better businesses decision than in-house billing. In certain cases, outsourcing may be the only way to save a practice from financial disaster.
Rejected claims can reach as high as 50 percent for some practices, and more than half of these claims ($25 per claim on average) go unworked, according to the Medical Group Management Association (MGMA). A/R days also count. Higher than average claims (over 120 days) can add up to thousands of uncollected dollars. If not corrected, this can lead to massive loss of revenue every month. Collections can drop due to several reasons: coding errors that lead to high denials and write-offs, high A/R, inefficient RCM processes, inexperienced billers, old systems, difficult claims, etc.
It can be difficult to identify the exact cause of poor revenues within the organization. A medical billing provider provides an objective view, it has the tools to determine exactly what is causing the problem, and it can implement solutions immediately to stabilize collections and slowly improve revenue cycles. Some hospitals that were headed for bankruptcy adopted outsourcing exactly for this reason. Even for practices that are doing well financially, there may be overlooked areas of improvement that a service provider can identify and exploit. If errors are causing high denials and poor collections, for example, a billing provider can scrub claims before they are submitted to the insurance carrier. If the cause is untrained billing staff, the billing company can provide individual coaching.
High employee turnover and lack of skilled talent are issues in any industry, but they can be particularly debilitating to healthcare organizations that rely on experienced billers for their revenue. Billers specializing in complex or difficult claims (motor vehicle accidents, mental health billing, and complicated surgery) are highly in-demand and hard to find. It can also be difficult and expensive to hire the right people in certain locations, so some practices hire what they can get. Inexperienced billers can actually lengthen your revenue cycle. Outsourcing medical billing to a third party means immediate access to the best billers, coders and claims specialists. Whether local or offshore, experienced billing staff performs high-quality work for their clients.
New practices need all the help they can get. Like any startup, new practice owners often do everything themselves due to limited resources. A medical billing provider can help control costs at the early stages of your business, and customize billing solutions as your business grows. You gain access to experienced medical billers and coders, the latest technology, best-in-class RCM processes, and consulting services without the need to invest in recruitment and infrastructure.
Payer audits now tie the amount of reimbursement with health outcomes instead of just frequency of visits. Practices must become accountable for their patients’ health to be successful in a challenging environment. Physicians that perform admin duties and use legacy or paper-based systems are going to be left behind. More admin and paperwork means spending less time with patients, who can easily switch to another healthcare provider. Patients today are more demanding and have higher expectations; they want access to their own information, and they want to be able to connect in multiple ways with their provider. For the practice, this often means digital transformation, something that a medical billing provider excels at. Offloading admin tasks to a medical billing company and switching to new systems will greatly improve patient satisfaction with your service.
Another advantage of outsourced medical billing is improved transparency and performance monitoring. Your billing partner will send you weekly, monthly and annual reports detailing billing and collections data, highlighting areas for improvement, identifying patterns, and giving you valuable insights into your revenue cycle. It’s like receiving a report card that shows how outsourcing is impacting the bottom line and how the service provider is living up to the service level agreement. Some billing companies go further by recommending solutions to improve their services and add value for their clients.
Regulations in the healthcare industry are constantly changing, and keeping up with them can tax your resources. The ICD-10 transition alone, which increases the number of medical codes, is one of the biggest changes to hit the industry in years. Analysts expect increased claim denials and longer revenue cycles during the transition period, leading to low collections. Many healthcare organizations are working with third parties to minimize the negative impact of ICD-10. Billing companies are prepared for the rollout, and they have systems and processes in place to help practices stay profitable during this tricky time. Billing companies also ensure that your technology and processes comply with HIPAA and other healthcare laws.
Paper documents can be a major problem for a growing practice. Patient registration forms, EOBs, insurance cards and medical charts can pile up. Storing them in the closet or basement is an option, but the practice is not HIPAA compliant. It also makes it difficult to access the right forms when you need them. Because practices are required to keep these legal documents for up to 10 years, boxes of paper can accumulate over time. If your practice is in the process of transitioning to EMR/EHR, a medical billing provider can scan the paper documents and store them electronically.
Some providers offer secure cloud storage with 24/7 access. Scanned records can be indexed in such a way that physicians and office staff can easily retrieve them. You can scan and archive these documents yourself, of course, but investing in a high-speed scanner and other equipment can be expensive. A service provider can provide scanning and storage services at very low rates.
Reputable medical billing providers understand the role of data in organizational transformation. They also know how to turn insights into value for your company. Using analytics software and other sophisticated tools, the billing provider can help you identify strong and weak process areas in terms of maximizing reimbursements, bottlenecks that slow down claims processing, specific claims or insurance carriers that increase A/R days, and underperforming staff that can benefit from training or coaching. At the very least, clients enjoy the benefits of knowing exactly where they stand in terms of collections and profitability.
Talk to an expert today. Contact Sourcefit to learn more about the possibilities and opportunities of building your dedicated team of professionals in the Philippines.