Revenue cycle management (RCM) is exceedingly important in the healthcare industry. Medical practices and hospitals rely on the effectiveness of their billing operations to survive. While healthcare might be the top priority, medical practices are still businesses and need to turn a profit to continue to exist.In-house medical billing vs. outsourced revenue cycle management
If you opt to have your own staff cover medical billing, you’ll be responsible for coding, submitting and following up on claims. That means you’ll need a certified medical coder on staff, as well as an established process that ensures claims are created, scrubbed, and submitted in a timely fashion. If a claim languishes or is rejected by the company, you’ll need staff to manage that as well.
It’s also crucial to stay on top of the ever-changing regulatory framework and new policies. For example, as of 2018, ICD-10 coding has been implemented across the industry. Keeping billing in-house is often cheaper and gives you more control over the process, but for a small practice that already needs its staff to wear many hats, billing can be time-consuming and complex. Worse yet, if the proper time and attention are not given to the billing process, you might end up losing out on a substantial amount of money.
Medical billing services can help alleviate that burden, but it might end up being more expensive. Often, for a percentage of your collections or a subscription fee, a medical billing service can take over your revenue cycle management and free up your staff to focus on other tasks. A good medical billing service will increase your collection rate, reduce rejections and denials, and even provide an analysis of your accounts receivable. You’ll typically be able to generate on-demand reports and view your day-to-day finances through the company’s software as well.
At best, outsourcing your revenue cycle management can result in more money for your practice without allocating your own staff to complete the arduous tasks of coding and billing. But how can you possibly know which billing service to trust with something as important as your revenue cycle management?
Regardless of which option you choose you’re going to need practice management software. If you choose to outsource your billing, discuss with your billing partner which software they are familiar with. You’ll also need to ensure that software is interoperable with your electronic health record (EHR) system.
Outsourcing your medical billing is a huge decision with potentially far-reaching financial and legal implications. There are hundreds, if not thousands, of services to choose from. Some are large companies with a plethora of resources, while others operate out of living rooms. Choosing a reputable medical billing partner is critical to ensuring your practice’s financial success.
How to choose a medical billing service
When selecting a medical billing service, there are a few things to keep in mind. Of course, you’ll want to know what the costs of the service are, but you’ll also want to know exactly what you can expect from a billing partner.
That can be difficult. Without knowing the right questions to ask, a practice can wind up working with a medical billing service that doesn’t live up to its promises.
It might be worth hiring a professional consultant with extensive experience to help guide your practice. You can locate a professional consultant here. But if you decide to go it alone, there are a few questions that should be on your mind when selecting a medical billing partner. Here are a few aspects to consider before buying:
Costs
These are highly variable based on the size and specific focus of your practice. You’ll need to contact a sales representative for hard numbers, but some billing services’ websites offer a general estimate of what they charge. Companies most commonly charge a percentage of your monthly revenue as payment, often between 3 and 9 percent of net collections.
It’s important to consider what the costs in time and money would be to keep billing in-house versus what the financial cost would be to outsource relative to the potential increase in revenue. Here are three key questions to ask a medical billing service when discussing costs:
- What specific services are included in the monthly percentage I am paying?
- Are any clearinghouse fees included in the percentage, or are they additionally charged to my practice?
- Does the percentage include any co-pays my staff collects at the time services are rendered?
Services
Most billing companies will scrutinize your claims for errors before processing them, and many follow up with the insurance company to ensure the claims are accepted. However, some companies will also provide a periodic analysis of your accounts receivable, along with recommendations on how to improve your practice’s financial performance. Others even come with access to an electronic health records system and/or practice management software. When you’re determining which company to outsource your RCM, it will be important to consider which services your practice and patients need. You’ll also want to consider the following:
- Does the medical billing service have certified coders on staff, or will my practice be responsible for coding?
- If the billing service does perform coding, is it up to date with the transition to the more robust ICD-10 coding system?
- How detailed are the financial reports from the medical billing service? Can my practice expect analysis and suggestions to improve performance?
- Does the medical billing service have experience with billing for my specialty?
Support
You’ll want a communicative billing partner that keeps you engaged at every turn. Most companies offer software that allows practices to regularly review their revenue cycle, claims and rejections. You’ll want to ensure that, if something goes wrong, your medical billing partner will be responsive and helpful. Open lines of communication can mean the difference between a breakdown in the billing department and a boost to your bottom line. It’s important to ask the following questions before signing on the dotted line:
- Can I access information about my practice’s revenue cycle at any time?
- What can I expect from the medical billing service when a mistake is made?
- Will the billing service provide my practice with copies of any “explanation of benefits” or “electronic remittance advice” documents it receives from payers?
Patient engagement
A medical billing service should also keep your patients in the loop and deal with delinquent accounts. Many billing services will send patients their statements directly and transfer unpaid accounts to collection agencies if necessary. Some medical billing services field phone calls and address patient questions as well. Some companies even offer a patient portal, where patients can directly access and pay off their accounts. You’ll want to be sure your medical billing partner is willing to stay engaged with your patients and keep them abreast of what they owe. You’ll also want to find out the following:
- How long will the billing service wait to transfer unpaid balances to a collection agency?
- Is a patient portal included in my monthly percentage, or is it an additional cost?
Remote hosting
Most companies offer either cloud hosting or will host the software and your data on their own servers. This service will keep your practice from needing servers of its own, which can be costly to keep and a risk to your practice’s data if something should happen to any of the hardware. Instead, remotely hosted medical billing services take care of updates and system maintenance on their end, removing one more thing from your staff’s to-do list.
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