Outsourced Medical Billing
Benefits of Outsourcing Medical Billing
Many forget that not only are physicians highly trained in the intricacies of the human body, they are more than likely owners of a business with sizable revenues and expenses. As a business owner, a physician is the party ultimately responsible for all expenses related to operating the business. Through outsourcing medical billing, physicians gain a consistent cash flow capable of meeting the recurring obligations related to staff salaries, benefits, office expenses and any outstanding loans.
Cash Flow Consistency
One of the benefits of outsourcing medical billing is a consistent cash flow capable of meeting the recurring obligations related to staff salaries, benefits, office expenses, outstanding loans, and other expenses. A steadier and more predictable cash flow will allow a physician to maintain a financially healthy practice and focus more attention on patient care.
Outsourced medical billing can ensure a more steady cash flow by lessening the costs associated with collecting receivables and achieving a higher, more consistent collection rate. A steady cash flow allows a physician to continue seeing patients and to nurture their practice.
Lowering Collection Costs
The physician’s cost for filing claims and collecting fees varies from approximately .04 to .17 of every dollar a physician collects. The general rule of thumb is to have one full time employee per physician to handle billing and collections.
As a practice grows, the number of full time employees per physician will decrease but the overall number of employees increases. These employees need extensive knowledge of ICD-9 (soon ICD-10) coding, CPT coding, and the rules and regulations for filing with specific payers. The cost to hire and train employees involved in billing can make up a large percentage of a practice’s expenses. The costs can increase even more when one considers that a practice will also incur additional office, IT, and other expenses associated with having more employees.
Outsourced Medical Billing - Consider Outsourcing Medical Billing
Through outsourcing, physicians can save on all billing related expenditures. The medical biller specializes in billing, has trained staff, and efficient, proven business processes for collecting receivables. A well-established billing company can bill at a lower cost than a single practice or physician.
A Steadier and Higher Collection Rate
Following up on denials is one of the most time-consuming activities associated with medical billing. To overturn a denial sometimes takes months or even a year. There is also little return compared to claims that pay immediately. Because following up on denials is so difficult and labor intensive, physicians have a tendency to focus on money that is easy to collect. Denials and difficult claims are worked sporadically or sometimes not at all.
A policy of procrastination leads to inconsistent cash flow and lower collections. Income fluctuates depending on what claims are filed correctly and how many difficult claims and denials are pursued. Outsourcing to an experienced medical biller can even out this inconsistency and provide a steady revenue stream for budgeting. Physicians no longer worry if the collections for this month will be drastically different than the month prior.
Reduce Administrative Headaches
Medical billing services provide expertise and experience in a field that is largely foreign to the physician. Instead of becoming versed in the ins and outs of a complicated industry that is outside their main area of expertise, the physician can focus on delivering excellent health care.
In a physician’s ideal world, all patients would pay out of pocket for the services they received at the time the services were rendered. In this ideal world it would be the patient’s responsibility to seek reimbursement from their respective health insurance company and/or government payers, if applicable.
Reality does not resemble the physician’s ideal world when it comes to billing and insurance claims, unfortunately. The physician is required to file all the necessary paperwork, check on the status of the claim, and dispute any denials of coverage. To say that in today’s uncertain healthcare climate the changes in filing requirements can be frequent and confusing is an understatement.
The Benefits of Outsourcing Medical Billing
The rising costs of providing health care and the increased complexities of submitting insurance claims highlight an urgent need for medical practices to become more efficient. When a physician makes the decision to outsource his billing, he can cut costs dramatically by saving on everything from labor to postage. Outsourcing medical billing to a third party can straighten out fluctuations in cash flow caused by inefficient billing practices or low in-house collection rates. By taking steps now to outsource medical billing, physicians will be rewarded in the future with a financially fit practice.
