It is getting harder for healthcare practices to get paid for the patient care they deliver. Smaller providers have a hard time justifying in-house billing resources, and the role often gets delegated to an employee that lacks expertise, resulting in a cash flow disaster. This dynamic reduces diversity and competition in the healthcare industry as smaller healthcare providers struggle.
Healthcare providers are increasingly delegating their medical billing to outsourced specialists. In doing so, providers are reducing costs, improving cash flow, and reducing their payroll liabilities.
This article shares 3 benefits of medical billing outsourcing and the steps to take to mitigate its pitfalls.
Benefits of outsourced medical billing
1. Increased collections efficiency
Finding the right outsourced medical biller can improve a practice’s collection rate by mitigating errors, appealing claim denials, following up on outstanding AR, and streamlining the overall process.
An excellent outsourced biller will be well versed in the constantly changing insurance landscape and will know the intricacies of each payer.
Providers should make sure the medical biller has previous experience billing for their specific services and have stayed on top of industry changes. They should also make sure the biller understands each insurance companies’ payment rules, cadences, and systems.
2. Lower costs
By outsourcing, healthcare providers don’t have the employment liability and associated payroll costs of an in-house billing team. Nor do they need to buy expensive billing software and training or pay clearinghouse fees.
An outsourced biller typically charges a percentage of collected claims. The industry average is around 7%.
Before deciding to outsource, a healthcare provider should determine if they can reduce their costs by more than an external biller would charge. To do this analysis, providers add up the cost of an in-house medical biller, including salaries, payroll expenses, employment liability, recruiting, and opportunity costs. If it is more than the cost of an outsourced biller, the choice is clear.
A provider should also account for downside employment risk on in-housing the role. What if the biller is incompetent or quits, leaving the practice with thousands or millions of dollars in unpaid claims?
3. Better visibility
An excellent outsourced medical biller will be able to compile detailed AR reports as well as provide the status of outstanding claims. However, this is not always the case. Many outsourced billers are a “black box.” Providers often lack visibility into the process of the biller, and data can get lost in emails and in-between software systems.
A provider should make sure there is a clear process in place for the outsourced medical biller including what software systems, communication cadence, and reporting are required.
At Hey Healthcare, we combine medical billing experts and robust technology to help healthcare providers maximize collections and minimize hassle. Our dedicated billing specialists are focused on delivering the best possible customer service, which makes our clients feel like we are an extension of their staff. Our technology provides a visualization into the billing process and mitigates errors to make sure providers get paid on time.