Outsource to upgrade?

Your practice may benefit by outsourcing its medical billing

In too many medical practices, physicians remain naive about the complexities of medical billing. They fail to invest adequate resources in the department responsible for the organization's financial success and legal compliance.

Medical billing requires constant attention to a plethora of regulations, publications, guidelines and laws. Entrusting its processes to unqualified staff is an irresponsible business practice. Practices purchase expensive hardware and software to fix medical billing problems, but the technology has limited value in the hands of untrained people.

Outsourced billing a practical option

Outsourcing billing functions can cost-effectively employ experienced, certified professionals who focus exclusively on the financial performance of your practice. While outsourced billing may not always translate directly into cost savings, it can enhance performance and quality control. Outsourcing remains somewhat controversial, however, because it can mean giving up control of a vital part of the practice. However, if done properly, outsourcing can allow added control via concise reporting and other meaningful feedback.

Choosing a billing service

As in any industry, there are good outsourcing firms and there are bad. How do you distinguish between them? First, beware of rock-bottom pricing: It can indicate low-wage billers who have little experience and no certification. Low-price firms also may hide charges elsewhere for postage or secondary claims, for instance. Check references on firms that have changed names are they trying to hide a bad reputation? If you are considering a medical biller who works from home, does s/he have the resources to do follow-up work?

Ask candidate firms for a list of clients. Contact these references to learn their days in accounts receivable (A/R), denial percentages, collection percentages, A/R over 90 days from the date of service and their general satisfaction with the billing firm.

Choose a vendor that can provide you with meaningful, timely reporting. You will want to know month-end tallies such as total charges, payments, adjustments, total A/R and collection percentages. You should also have access to denial percentages, days in A/R and year-to-date comparisons of your practice's performance.

Technology is the other cornerstone of any good outsourcing firm. Check that candidates have invested in the latest technology. Firms should at least be able to compare insurance reimbursements to your contractual agreements, track your fee tickets, send claims electronically and receive electronic error reports.

Review a copy of each firm's compliance plan and training program for the Health Insurance Portability and Accountability Act. Firms should demonstrate their commitment to fraud prevention, protecting the integrity of government programs and adherence to statutes and regulations. A billing service must have some type of medical record auditing program. A quarterly mini-audit is a good way to ensure that everyone is in compliance.

Biller should give training, good customer service

Outsourcing doesn't mean that your staff won't receive feedback. Choose a firm willing to train your front-desk staff to ensure the flow of accurate information. Have a mechanism in place to relay billing problems to physicians. Look for a vendor that is accessible to your staff during your office hours. Will you be able to reach someone if you have questions about an insurance plan requirement or if a patient disputes a balance due at check-in?

Look for a company that provides good customer service. Visit potential candidate firms. Listen to how they handle phone calls. Make sure you choose a company that sees its services as an extension of your care. What are its office hours? How quickly will it respond to your patients' inquiries?

Make decision in context of your entire operation

Don't decide to outsource your billing solely on your group's performance as it relates to A/R vs. published benchmarks. You must make the judgment within the context of your entire operation.

Managing a medical billing department is a tough job. Measuring the ability of your employees, keeping them current with coding changes, educating providers, compiling reports and benchmarks, and creating protocols are all integral to successful A/R management. You may decide your organization will benefit by outsourcing these functions instead.

By Leigh Ann Simms, CCS-P

about the author

Leigh Ann Simms, CCS-P, vice president and chief operating officer, doshealth, Columbus, Ohio, las@doshealth.com

Copyright Medical Group Management Association Publications Sep 2005
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