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With small and large practices, a familiar scene often plays out: upon monthly or quarterly review, lost revenue is tabulated from denied insurance claims because a patient was miscoded, inaccurate insurance coverage was recorded, or because a claim was not submitted in time. If you are a member of a medical practice and are nodding your head in agreement, you are not the exception, you are the rule. Lost revenue from billing errors, revenue cycle management inefficiencies and disrupted cash flow affect more than 80% of every single claim filed in the US.
In-house medical billing staff for any practice face the incredibly difficult task of having to work at 100% efficiency to ensure their entire business remains afloat. The natural question for the specialty clinic or ambulatory care center is whether to utilize an in-house billing staff, or to outsource the work to a medical billing company. The answer, like anything in medicine, depends on whether the benefits outweigh the risks.
Time is Money
Some practices have the right scope and range to have all their billing needs met. Their front office staff has developed a robust system to accurately capture patient insurance coverage. Also, the services rendered are always coded precisely according to the latest regulations, and claims are submitted to insurance companies in a timely fashion with no lag time in their revenue cycle management.
However, even in practices where the above tasks are handled well, billing staff are aiming at a moving target as a result of changes to medical coding regulations or MACRA metrics that are enacted regularly. It’s estimated that delays happen so regularly that more than 60% of patient balances are paid late, which can cost your practice three times the amount of the original claim in terms of work-time lost. If in-house medical billers are learning on the job, or have other concurrent jobs in the practice, it is certainly worthwhile to consider outsourcing medical billing to companies that are specifically dedicated to getting every stage of revenue cycle management right.
Rules of the Game
At its core, only a small portion of a medical visit is paid upfront with a copay; the majority must be billed to a patient’s insurance company to be fully and fairly reimbursed for rendered medical services.
Within this framework, different insurance companies have different policies on topics ranging from prior authorization to manual claims guidelines to deadlines for filing claims. While some practices are on top of all the different insurance companies’ policies, there is no question that staying abreast of these changes is time consuming. This is where outsourcing discrete tasks like this can cost your practice upfront, but can pay much larger dividends in the long run.
It can be difficult to take an honest look at how efficiently or inefficiently your medical practice is operating. At first glance, it may seem like you are saving money by keeping your medical billing in-house, but this isn’t necessarily true. Outsourcing can save a practice a significant amount on overhead costs, employee wages, and time saved. The combination of these factors makes the decision an easy one.
To calculate potential savings of outsourcing your medical billing, you need to sit down and assess how well your practice is performing at some of the basic functions of a robust medical billing system:
- Managing True Cash Flow: What percentage of your medical practitioners’ days is completely booked? What types of procedures do they perform compared to how long the procedures take? What percentage of the total bill do patients pay at the time of the appointment? How do you manage non-payment from patients and insurance companies?
- How Many Claim Errors Are Made? How many claims are denied based on demographic errors, filing date expirations, or coding inefficiencies?
- How Much Does It Cost to Have a Dedicated or Multi-Tasking Biller? How much is spent on their salaries, vacation, sick time, benefits, or EHR-specific software licensing?
Whether you decide to hire an outside firm or use in-house billing, there are some time-tested methods to increase your cash flow:
- Code for medical diagnoses and procedures immediately during or after the visit. The biggest factor in coding inaccurately is waiting too long to enter CPT or ICD codes.
- Always verify insurance eligibility before a patient appointment – some EHR patient portals allow patients to enter their insurance well before a visit to ensure adequate coverage.
- Create a workflow with front desk staff and medical billing staff to strive to collect near 100% of co-pays on the day the services are rendered.
- Ensure medical billers are continually up to date on the latest coding changes to rules and regulations, whether through online training or on-site training seminars.
Initiate in-house auditing and tracking for financial metrics like accounts receivables on weekly, monthly, or quarterly periods to assess further inefficiencies that can be addressed in the future.