Outsourcing Medical Billing Is Typically the Best Option
Outsourcing medical billing to the correct billing company can insure that they have the same incentives as you do.
Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.
Most people would prefer all their service providers to have “skin in the game” and only be paid for success versus just for making an attempt. For instance, would you prefer to pay your mechanic only if he properly fixed your car (and only for a previously agreed to price) or would you prefer to pay him an hourly rate and hope he will be as effective and efficient as possible in performing the job?
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller’s desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was “sternly” reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
This reaction is surprisingly common. Typically practices have so much trouble recruiting, training and retaining billing staff they are reticent to let one go. In addition, the billing staff complains about how understaffed they are and how they cannot be held responsible for not being able to complete even basic medical billing tasks. In this office’s case they moved the biller to the front desk and had her in charge of collecting patient demographics. A place where she can do even more harm through poor performance.
This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice – in other words, for the one you see there are likely hundreds you do not.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from “falling through the cracks”.
- The medical billing service should assume full responsibility for timely filing issues and pay the practice the allowed amount for any claims they fail to submit prior to the timely filing deadline. This eliminates the risk a practice has when the billing is done by in-house billers who will never provide such a guarantee.
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
No – your staff will not work harder for you just because you employ them; and No – the biller who lost you $40,000 will not do any better job collecting money and gathering information from patients. You will probably need to “sternly” reprimand them again.
A judicious selection of a medical billing company that meets the criteria outlined above is your most direct and reliable method for avoiding your own medical billing horror stories.
Copyright 2008 by Carl Mays II
