One of the most important business questions physicians face is whether to outsource their medical billing to third party medical billing services or to do it in-house with medical billing software.
According to Black Book’s 2016 RCM survey, more and more physicians are eyeing outsourcing medical billing to third parties as they look to align clinical and financial outcomes. Survey findings from 2,000 independent physician practices and 200 hospital-based physician practices reveal profit margins continue to be impacted negatively by traditional patient billing solutions, steering 59% of medical providers and 86% of hospitals to get rid of inefficient billing methods by the third quarter of 2017, according to the release.
As per the survey, besides cost, physicians and practice administrators identified 5 factors that encouraged organizations to consider outsourcing their billing:
• 96% of practice leaders report inefficient billing processes.
• 97% of independent group and solo practices experience high business staff turnover. 83% of hospital-based physicians also report trouble recruiting business office candidates experienced in ICD-10, Value-Based Care, Risk Contracting and MACRA.
• 95% of practices with less than five physicians self-identify as “not tech savvy”.
• 100% of the 224 participating “New” Physicians seek alternatives to office financial and staff management as they launch their new practices.
• 77% of physicians believe they need to find more direct patient care time currently taken up by business office-related issues.
As per a recent report by Grand View Research, the global medical billing outsourcing market was valued at nearly USD 6.3 billion in 2015 and is expected to reach USD 16 billion by 2024. The medical billing outsourcing market is driven by greater management and financial flexibility offered through outsourcing.
For practices all over the country, a medical billing company providing revenue cycle management services has become a necessity. Profit margins are shrinking in the private sector due to reduced carrier allowances, increased regulation and carrier red tape. Operating efficiently is now more a matter of survival than it is good business sense. For many practices with in-house billing, it’s not unusual to have a 35 percent or higher claim rejection rate, which requires extensive and expensive follow-up.
The cost of compliance professionals for a professional billing company can be spread across many clients. This way they can operate on a lower cost than single practices and these cost savings are passed on to your practice. They review and post all payments ensuring that the carriers are paying the correct amount and preventing incorrect adjustments. They can track every outstanding claim until it is processed and paid to its fullest. It can also be expensive for an individual practice to invest in not only EMR and practice management system, but also additional software such as a claim scrubber, denial management tools, and a business intelligence reporting software.
Another major problem faced by practices is lack of follow up on unpaid claims or underpaid claims since follow up is time consuming and burdensome. Practices can lose revenue due to timely filing requirements if follow up is not done regularly.
Regulations change constantly, and billing managers should ensure that they are up to date with all the regulations. The number of DX codes have risen to 68,000 from 13,000. This can cause a substantial increase in payer denials. A medical billing company can provide the benefit of a vast knowledgebase since they deal a network of other practices and they are privy to the aggregated trends.
Focus on what you do best
Physicians and administrators are realizing that doing the billing in house requires a lot of time and effort. Even if they are not personally responsible for managing the claims, it still requires a lot of management. Tying up with a billing company can free up substantial amount of time that could be spend with patients. Thus physicians can maintain patient volume and increase their revenues at the same time.