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Outsourcing Medical Billing Services

Outsourcing Medical Billing Services

Medical billing is an authentic payment practice in the U.S. healthcare system that facilitates reimbursing services from third-party payers through a structured process. Medical billing generates medical claims which act as billing invoices detailing rendered services in the form of codes, and the whole procedure involved in it is called the billing cycle and sometimes Revenue Cycle Management (RCM), which commences with the RCM work model and collects revenue through billing. Without this process or with inaccurate billing, medical organizations can never gain what's their proper, i.e., reimbursement. Physicians already have a lot on their plate; hence, assuring accuracy is challenging and distorts their profit. At this point, outsourcing is a handy approach in which 3rd party billing experts such as MedsIT Nexus submit clean claims on physicians’ behalf.
This post will clear your confusion by answering frequently asked questions such as why you outsource, what are the highlighting differences between outsourced billing and in-house billing, the pros and cons of outsourcing, and what the solution will be to avoid these risks.

Why should you outsource your billing department?

There are a lot of challenges that come with in-house billing. To overcome these challenges, healthcare providers consider outsourcing. Some of these prominent issues that urge outsourcing include the cost of managing the in-house billing department and overhead expenses like onboarding costs, infrastructure installation expenses, salaries, benefits, and training costs. Moreover, changing rules, the small size of the team, low turnover, less patient care, and data breaches also interrupt workflow and profitability. Medical billing fines for each data breach are higher as compared to other fields, with the global cost of data leakage in 2023 being around USD 4.45 million (a 15% increase over three years). Due to these challenges and the perks offered by 3rd party billers, physicians are more prone to handle their RCM services to 3rd parties. The result of an MGMA stat poll showed that 36% of healthcare providers chose to outsource their "revenue cycle" when they were asked about the area they wanted to outsource.

Critical Differences Between In-House vs. Outsourced Medical Billing

In-house billing services Outsourced billing services
Physicians have more control over the RCM process. Physicians have less control.
High operational cost No operational cost
Salaries and benefits No salaries and benefits
Need to spend money on implementing & maintaining technology No need to spend money on technology
Ease of communication with the administrative crew Risks of communication challenges
No expertise Access to expert and skilled services

Pros of outsourced medical billing management

Cost saving

When you handle your finance department to 3rd party vendors, you don't need to spend money on the installation of billing infrastructure; no salary expenses will cost your revenue. A case study highlighted the importance of outsourcing by stating that you can achieve decreased costs when you stop investing in expensive infrastructure such as state-of-the-art technologies. Each external billing platform is specially designed to fulfill every billing demand and assist in escaping overhead costs. These companies follow one of the two specific reimbursement structures given below.

  1. Percentage-based model: Under this model, billing vendors charge a specific percentage of your monthly revenue, which may range between 3%-10%.
  2. Flat fee model: This payment model shows that the billing companies charge a fixed amount per claim regardless of the claim’s actual value. Most providers usually cost $4 to $7 per claim or $20 to $30 per hour under this model.

The complexity of the claim, the services provided, the geographic location, and the volume of claims are some factors that determine the medical billing rate.

Time-saving

Billing is time-consuming, as "time well-spent results in more money to spend and more money to save." Busy physicians don't have enough time, so outsourced administrative companies take the responsibility of removing this burden from their shoulders. As explored by a Sermo poll, around 26% of the providers mentioned outsourcing as a time-saving strategy.

Reduced errors & claim denials

Expertise: Top-ranking healthcare billing firms have experienced coders and billers who use effective strategies to analyze the claim to make error-free comprehensively.
Up-to-date on new changes: Skilled medical billers and coders follow different protocols to stay updated on new Federal and State laws as well as new rules of coding. These companies offer ongoing training to their staff. Therefore, their medical coding experts use updated and legal codes according to the guidelines of insurers and coding organizations.
Technology: These companies implement in-class and state-of-the-art software that eliminates the burden of implementing quality assurance procedures to stay updated with new policies and identify any errors in claims before sending them to insurers to ensure no reason for the claim is left.
Regular auditing: Ensuring compliance and correctness through auditing before and after claim submission is the best service for professional billing because auditing rectifies mistakes, hence clean claim submission.

Safety and security

Billing involves dealing with and exchanging a lot of private information, which must be secured to avoid HIPAA penalties. Billing companies are safe because they are HIPAA-compliant and more conscious of compliance; hence, they implement safety procedures and inform patients how their data will be used to meet the three HIPAA security standards.

  • Physical security includes procedures, measures, and policies to protect information systems from unauthorized attacks. These include access control, device, and media control, policies for sharing electronic media, and policies for disposing of it.
  • Administrative security includes risk analysis, establishing security officials and employees to avoid risk and manage the risks, evaluating security protocols, workforce security, creating formal security management processes, and developing contingency plans.
  • Technical security includes policies for using technology to protect electronic PHI, focusing on access control, integrity control, encryption, and decryption.

Scalability of service

Scalability is the ability to adapt your business, its resources, and operations to meet new changes and updates. Outsourcing assists providers with the services and resources your practice needs and eliminates the distractions and difficulties that hinder growth regardless of size.

Boosted revenue

External billing experts positively impact revenue by using experience, professionalism, and skills and implementing various auditing strategies to streamline the financial aspects and decrease claim denials: the fewer claim denials, the greater the revenue.

5 Cons of Outsourcing Medical Billing and How to Overcome These Issues?

Problem 1: Communication constraints

Lack of communication adversely affects medical providers and billing companies. This means Healthcare providers cannot clearly ask about what is happening with the claim, and billers cannot clear up the confusion about documented services.
Solution: Before contracting, ask them about the modes of communication and how they streamline communication using advanced technology.

Problem 2: Loss of control

Handling your billing process to a third party means you have less or no control over your financial process.
Solution: Ask about their transparency protocol and when and how they will maintain transparency. MedsIT Nexus provides frequent reports and dashboard services, along with free access to the cloud, to keep you updated.

Problem 3: Quality concerns

Not all billing companies provide the personalized and high-quality services you need for your practice's high revenue.
Solution: To mitigate this issue, check the company's experience, reputation in the market, and clients' feedback about the quality of its services. Investigate whether the company adheres to HIPAA.

Problem 4: Hidden fee

Outsourced firms may charge you additional expenses other than fixed charges, which are a great concern for healthcare organizations.
Solution: Before signing the contract, check for any additional charges and read the contract carefully to understand all the expenses.

Problem 5: Security issues

There can be potential security threats associated with the procedure because exchanges of personal information occur, which can lead to penalties in case of any misuse.
Solution: To mitigate the issue, make sure the billing company is HIPAA-compliant in using and legally securing information. If a company is HIPAA-compliant, it will follow every protocol to safeguard your patient information to help you escape fines.

MedsIT Nexus is what your practice needs!

Are you a physician who wants to unlock revenue resources and strategies by professional healthcare billers and coders? Do you want services tailored to your administrative needs to earn profit and improve your reputation in the industry? Wait is over because MedsIT Nexus medical billing company is offering scalable services that integrate EHR, EMR, and other cutting-edge technology, meeting Federal and State laws and complying with HIPAA guidelines to increase reimbursement. We eliminate the administrative burden overwhelming you and help you spare time for better care with economical pricing that suits your practice. So, contact us today and let your practice be in the hands of an experienced medical billing management company.