Should You Outsource Your Billing?
OPERATIONS
Lisa Maciejewski-West
CMC, CMOM, MCS-P
There is an increasing trend in the healthcare industry of outsourcing clinic billing operations to third-party medical billing companies or billing services. Some of the leading medical consulting companies in the country estimate that 90% of small or solo medical practices will outsource their billing within the next three to five years.1
Why is it that more and more doctors are looking to outsource? The main reasons lie in the ever-increasing complexity of insurance billing, coding, and documentation compliance, and tlie difficulties medical practices are having finding qualified, professional personnel to handle the workload in-house. There was a time when a chiropractic practitioner could easily hire someone with little or no knowledge of medical coding and billing and train them “on the job.” After all, chiropractors only bill for a limited number of procedure codes and services, so how hai d can it be? And if there were turnover in the billing department, there would be little difficulty in finding a new staff member to plug into that position. It can also be argued that, in general, the younger members of the “Generation X” workforce are not inclined to stay in one job or position for a long length of time, and may lack the critical thinking skills to effectively handle the complexities of medical billing.
Perhaps you are at a point in your practice where you feel as if your in-house billing operations are derailing due to increased salary requirements of your billing staff, high staff turnover, lack of, or difficulty finding qualified staff, difficulty keeping up with the ever-changing rules and regulations in the insurance industry, and/or the amount of tune and effort you spend chasing insurance and patient money. You are ready to take the leap and outsource your billing. Maybe you already are outsourcing, but are not sure whether the company you have chosen is doing the best job for you.
Ultimately, the goal of outsourcing is to increase profit and reduce stress in your practice. You may feel that outsourcing your billing would increase your practice costs, but consider the cost of staff salaries, taxes, and benefits. Then consider the intangible costs of lost revenue when a staff person goes on vacation, maternity leave, or quits, and you have to spend tune hiring and training someone new. How much money have you lost on claims that have been “swept under the rug” because follow-up is too time-consuming, and your staff has all they can handle just in the billing of claims and posting checks? When choosing to outsource your billing, it is important to spend some time
"What part or parts of your billing operations do you want to outsource?"
searching for a company, and researching the company that will ultimately be responsible for the fiscal health of your practice.
Billing companies will vary in the scope of work they perform. So it will be important to identify your needs up front. Ask yourself the following questions. What part or parts of your billing operations do you want to outsource? Do you want the billing company to do end-to-end revenue cycle management, including insurance verifications, entering daily charges/ services, entering all patient demographics, and billing, tracking, and following up on claims? Do you want them to send out
patient statements? Would you be happy with a billing company handling only the “back end” work of billing, tracking, and follow-up? Do you want to turn all patient accounts over to them, or just a portion, such as your commercial and Medicare claims? How much control of the patient accounts do you want to maintain? Do you want the billing company to use the practice management and billing software you currently have in place and have them log in to your system remotely? Or do you mind sending all your information to them and have them complete the work in their proprietary billing system?
A common concern and/or complaint of outsourcing lies in the loss of control of patient accounts. If you send all your billing information to the company, you may have no idea whether follow-up is taking place or not. Patients may ask you how much they owe, but you won’t have an answer because you no longer have access to the billing records. By working with a billing company that agrees to work in your office “virtually,” you will have complete transparency and can maintain full control of your patients’ accounts.
Billing companies will also vary in how they invoice you for their services. The two most common are a “per-claim” fee
“Will the billing company agree to bill weekly to avoid you having to pay for three separate claims that week. 5 J
or a percentage of collections. Billing companies that charge a per-claim fee may be the most economical, especially if you have a high-dollar visit average, but there are things to consider when choosing a company that charges per claim. Do they bill out daily? As a chiropractor, you may normally bill once a week and have two to thr ee dates of service on one clahn, especially if a patient is in active treatment. Will the billing company agree to bill weekly to avoid you having to pay for three separate claims that week? Does the company ask you to pre-purchase blocks of claims (i.e., 1,000 clahns at a time) in order to get the best per-claim rate? Once the claim is filed, how much time are they going to spend tracking and following up on unpaid claims? Do they handle other work, such as insurance verifications, patient statements, etc.? After all, they have already been paid. Don’t be afraid to ask pointed questions.
Billing companies that charge on a percentage of collections are generally going to offer more comprehensive service than companies that charge on a per-claim basis. On the plus side, billing companies that invoice you based on a percentage of collections are usually more vested in the entire collections process, as their payment is tied to how well they perform. Most billing companies that hivoice based on a percentage of
collections will usually charge anywhere horn 7 to 9% of the collections on the billing types or profiles they work. You may find companies that charge as little as 4 to 5% of collections. This is especially true with “off-shore” billing companies. They usually operate in countries other than the United States, where labor costs may be lower. Beware of companies that charge too little. Remember, that the time-consuming work of any billing department lies in the follow-up of unpaid claims and in appeals. If a billing company’s percentage or per-claim rate is too low, they may be unable or unwilling to pay their own staff to do the follow-up work. Cheaper isn’t always better. Also, beware of billing companies that charge a percentage of collections, and insist on doing the coding and charge entry for you. If they do, keep an eye on the codes they are submitting to make sure they are not upcoding services or adding service codes that are not appropriate to the encounter in order to fraudulently inflate the per-visit collection rate.
Finally, it is important to fully vet the billing company and choose one with a reputation you can trust. Ask industry colleagues or friends for a recommendation of a billing company. Check out the company’s website. Find out if they are experienced in chiropractic billing, coding, and compliance. Ask if you can speak to one of their chiropractic billing experts. Insist on references of other chiropractic clients who are using their services. Ask them if they are willing to be listed as your billing company with Medicat e (and Medicaid, if you file Medicaid claims). Ask them if they have a billing company compliance program, and whether they provide ongoing billing, coding, and compliance training to their billers. Ask them about the procedures they have in place to maintain HIPPA compliance and protect your patients’ PHI, as you transfer and transmit data between the two businesses. Check the OIG Exclusions database to make sure they are not excluded from the Medicare program.2
Your decision to outsource your billing or change billing companies should not be taken lightly. If you approach this thoughtfully and systematically, your chances of successfully transitioning to outsourced billing will be significantly higher. And you will find that bringing on a professional billing service will add a layer of security and peace of mind to you and your entire practice, freeing you up to do more of what you do best— treat patients and heal patients.
References
1. 90% of Solo, Small Physician Practices Plan to Outsource Medical Billing Written by Carrie Pallardy \ June 11, 2014 - from Becker ,’v A SC Review
2. Website: https://exclusions.oig.hhs.gov/
Lisa Maciejew ski-West, CMC, CMOM, MCS-P With 35 years of experience in the chiropractic field, Lisa is the president owner of Gold Star Medical, offering professional billing, compliance, and consulting services. Lisa holds certifications in coding, management, and compliance. She speaks regularly at local and state associations, as well as for medical and chiropractic organizations nationwide. Lisa can be reached at goldstarmedical ayvsn. com or by phone 866-942-5655.
