Why Doctors Should Outsource Billing


Given the complexity of today's revenue cycle processes, it takes the specialized skill of medical billing professionals to ensure your practices' economic success and compliance with the many government regulations. Billing is no longer something someone does to fill in the time between scheduling and rooming patients. 

When I first started in the medical billing field, things were much simpler. Payors would occasionally change a rule and give you ample notice to adjust your processes. Denials averaged less than 5 percent of total claims.

Fast forward to today, where if you don't have sophisticated claim scrubbing software, it's not unusual to have a 35 percent or higher claim rejection rate, which requires extensive and expensive follow-up.

The challenges that internal billing operations are faced with on a regular basis can lead to collection shortfalls and non-compliance issues. Here are some reasons why outsourcing billing to a professional practice management/billing company makes sense.

Regulation and Education
Regulations change constantly, which means that dedicated personnel must have the time to read bulletins, interact with payors, and attend industry seminars and webinars. Billing managers should be certified to ensure their competency. One such designation is the HBMA CHBME designation. Coding personnel who have the responsibility for ensuring that your documentation and coding are compliant with the new ICD-10 requirements should also be certified by one of the accredited coding organizations.

Cost Management
Implementing and maintaining a compliance plan can be expensive for an individual practice. A professional billing company can spread the cost of their compliance professionals across many clients. Technology is another major expense for an individual practice. Besides the initial cost of an EMR and practice management system, you also need to invest in additional software such as a claim scrubber, denial management tools, and a business intelligence reporting software, which is an expensive but necessary tool to proactively manage a practice.

Business Management
Lack of follow-up on unpaid claims or underpaid claims is one of the biggest problems I encounter when reviewing a practice's billing operation. Follow-up is time consuming and burdensome, and it seems to be the last thing people get around to – if ever. When follow-up isn't done on a regularly scheduled basis it can lead to lost revenue due to "timely filing" requirements. I also have seen contractual allowance adjustments applied to a patient's account even when the practice doesn't participate with the third-party payor.

Compliant and Competent Workforce
It is getting harder to attract and retain competent billing personnel. The Society for Human Resources Management states that the cost of recruiting, hiring, and training a new employee is at least $4,000. Utilizing a professional billing company eliminates this expense in its entirety. Given the complexity of the revenue cycle process, practices need full-time professionals to handle their billing operations – it can no longer be something someone will get around too. Professional billing companies offer economies of scale, which make their services less costly than doing billing in-house. The goal of any billing company is to maximize collections while ensuring compliance.

Today most physicians are working harder than ever and taking home less due to declining reimbursement and the high cost of collecting on a claim. The question every doctor should ask themselves is, "Why should I have the additional burden of running an internal billing operation?"

There are two things a practice should keep in mind. First, do what you do best (practice medicine) and outsource the rest. Second, never do anything that you can have someone else do more efficiently and at a lower cost.

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