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Outsourcing vs In-House Medical Billers: The Benefits & Disadvantages

 
 

When running a medical practice, the decision to outsource medical billing services or manage the revenue cycle in-house is one that is usually not easy for many healthcare providers/organizations to make. The best choice for your organization varies as there is no one-size-fits-all when it comes to medical practices. A multitude of factors plays an important role when trying to decide. The age of the practice, the financial health of the practice, and the patient volume are just to list a few.

 

Here are key cost questions:

  1. What specific services are included in the monthly percentage are you paying?

  2. Are there any clearinghouse fees included in the percentage?

  3. Does the percentage include any co-pays my staff collects at the time services are rendered?

Medical billing services usually verify patient information and scrub claims for errors before processing them and following up with the insurance company to prevent claim denials. It’s proactive to verify offering specifics:

 
  1. Does the medical billing service have certified coders on staff?

  2. If the billing service performs coding, are they current with the more complex ICD-10 coding system?

  3. Do they provide detailed financial reports? Do they include analysis and suggestions to improve performance?

  4. How much experience do they have billing for your medical specialty?

Effective, open lines of communication are important as they can mean a loss or a boost to your practice’s bottom line:

  1. Can I access information about my practice’s revenue cycle at any time?

  2. What can I expect from the medical billing service when a mistake is made?

  3. Will the billing service provide my practice with copies of any “explanation of benefits” or “electronic remittance advice” documents it receives from payers?

Confirm the medical billing service is willing to remain engaged with your patients regarding outstanding debt:

  1. Does the medical billing service send out patient statements?

  2. Is the medical billing company aware of the timeline used to transfer unpaid balances to a collection agency?

  3. Is a patient portal included in my monthly percentage?

  4. Does the medical billing service handle phone calls and address patient questions/concerns?

Get a complete understanding of the medical billing services IT arrangement:

  1. Do they offer cloud hosting or host the software and your data on their own servers? This would eliminate both the need for you to have servers and the responsibility for updates and system maintenance.

  2. How does the medical billing service protect your practice’s (and patients’) sensitive data? If something happens to their hardware, how is data backed up?

IN-HOUSE MEDICAL BILLING

Benefits

  • Location: Accessibility of an in-house billing department in case an issue arises is definitely a benefit. The ability to remain in the same building, observe, and address those issues is a major advantage.

 
  • Maintaining Control: When a practice already has trusted, reliable employees who are executing medical billing, coding, and revenue cycle management duties, providers and administrators appreciate having hands-on control of the financial operations with in-house billing.

 
  • Investment Return: Some practices have invested in training medical billers and purchasing billing software, so moving to an outsourced solution means forfeiting lots of time and money spent. If there’s a valid infrastructure already in place, sometimes it’s worthwhile to just refine the existing operation to generate the best investment return.

 

Disadvantages

 
  • Higher costs: In general the expenses of paying the medical billers’ salaries, training expenses, sponsoring health insurance benefits, and purchasing software, and hardware, add up to more than is usually spent by outsourcing medical billing and revenue management services.

 
  • Staff Support: If the practice only has a few staff members designated for billing operations, cash flow can be affected in a major way if just one employee calls out sick, takes a vacation, requests a leave of absence, or decides to terminate employment altogether.

 
  • Liability: Reports have shown that in-house medical billing departments can be a hotspot for embezzlement in addition to general employee neglect like ignored encounter forms, discarded superbills, and unappealed, denied claims, which can go unnoticed if managers are not constantly monitoring the billing operations.

OUTSOURCED MEDICAL BILLING

Benefits

 
  • Fewer Costs: Costs are very important to consider especially, if you’re starting a new practice or if you’re in the process of transition due to an employee-based action. Not having to pay for employee salaries, training, health benefits, software and hardware, costs associated with processing claims, and collection costs can save a practice substantial amounts annually.

 
  • Transparency: An efficient medical billing company can supply you with comprehensive performance and financial reports automatically or upon your request. Those capabilities provide unparalleled visibility into the practice’s billing operations without requiring them to micromanage or oversee any personnel.

 
  • Reliable Consistency: Contracts between you and the medical billing provider, outline their responsibility to perform certain services that include appealing denied claims with a positive level of expected outcome success. The practice would not have to worry about staffing issues because the outsourced billing company is responsible to provide billing services consistently (or at least for the life of the contract).

Disadvantages

 
  • Relinquishing Control: Some providers view outsourcing as an advantage because the responsibility of the billing process ultimately belongs to the billing service. However, it can be tough for a provider or manager with a hands-on approach, to relinquish control of the billing process to another company because revenue for the practice is so important.

 
  • Cost Variation: Most medical billing services charge a percentage of revenue collected on behalf of the practice, meaning the more revenue generated by the practice, the more they will pay out. This can make it difficult to budget the practice’s expected billing expenses because costs can vary a great deal between slow and busy months.

 
  • Additional Fees: Some outsourcing contracts list additional fees. Startup charges, fees for printing statements, or sending reports, and contract cancellation. It’s best to evaluate if the money saved by outsourcing isn’t offset by a number of additional fees.

Aside from patient care, medical billing and revenue cycle management is the most important process of your medical practice. Cash flow depends on accurate billing and A/R collection, so it’s understandable that the decision of how to handle these services should be considered carefully. A complete, practice analysis of costs, volume metrics and personnel can help make an informed decision that works best for your practice’s specific needs.

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