Handling a health care center, private practice, or hospital billing relies heavily on the efforts of
you and your internal staff. However, you might feel exhausted due to the heavy workloads and the
resource-intensive and time-consuming nature of healthcare billing. Handling paperwork denied claims and
the intricacies of coding and insurance companies might bring you to a breaking point and leave the
least time for you to take care of your patients. Due to the challenges embedded in billing, many
practitioners consider revenue cycle outsourcing to third-party experts. Whether to handle billing to
external providers or incorporate in-house billers must be taken seriously as it depends on factors such
as the size of the local labor market, state of practice revenue, age of business, etc. You should
thoroughly analyze your staffing, volume metrics, and practice cost to know what is right for you.
In this post, we have discussed some critical challenges associated with in-house RCM, how outsourced
billing can help overcome these challenges, some risks of outsourcing, and what points you should
consider when finding a third party to avoid these risks, etc.
In-house medical billing means no external biller or coder is involved in the billing process; instead,
your administrative and revenue cycle management process is done by internal staff.
Higher cost
While handling the financial process in-house seems easy and economical; it requires space,
technologies, new staff members, H.R. resources, staff education, training, etc.
Lack of HIPAA compliance
HIPAA compliance means protecting patient health information (PHI), and many medical practitioners
implement different digital software that is not HIPAA-compliant, like document archiving applications,
chatbots, insurance verification software, email platforms, medical billing software, etc. Additionally,
doctors must obtain written consent from patients before using their information. As doctors have the
least time to do so, the State attorneys general will impose heavy fines of up to $25,000 per violation
category per year, as cited by The HIPAA Journal updated report.
Poor accountability
Medical billing and coding demands extra time, effort, cautious oversight, and auditing at every step
because even minor negligence leads to claim denial. Most staff do not have experience and mishandle
bills; they require accountability. Practitioners do not keep a stringent eye on employee negligence,
such as unappealed claim denial or discarded superbills, causing legal problems.
Insurance verification challenges
In-house billers face hurdles in insurance verification for many reasons, such as frequent updates in
insurance information, different coverage plans, and complex insurance policies. Failure to gain
coverage verification leads to claim denials and surprise bills.
Staff shortage
If you only have two or three members to handle your accounts receivable services, your tasks and
revenue would be slow or distorted if any of them get ill. If any of them leave the job, you will need
time to hire and train new members, leading to delayed operations and cash flow.
More inaccuracies
Medical billing is complex due to the inherent complexities of insurance policies, coding systems,
reimbursement rules, and laws; if your staff is not well-trained, professional, and experienced, your
financial operations are more prone to errors. These errors may include billing for un-documented
services, upcoding, unbundling, misuse of provider identification numbers, duplicate billing, failure to
use modifiers, etc. Physicians in the U.S. lose $125 billion of their revenue per year due to poor
billing and coding. Moreover, HFMA reported that hospitals lose 3-5% of their annual revenue due to
inappropriate documentation and inaccurate coding.
In third-party medical billing, an external billing company handles healthcare administrative services,
claims processes, and invoicing operations between patients and healthcare providers to achieve better
RCM. It is the contract between providers and 3rd party billers that involves everything from patient
registration to coding to claim submission to addressing denials to payment collection. According to
Grand View Research, the global market for outsourced medical billing is anticipated to reach $19.7
billion by 2026, with an annual growth rate of 11.8%. Furthermore, the Global Medical Billing
Outsourcing 2021-2028 report states that outsourcing is projected to touch $25.3 billion by 2028, with
revenue generation and profitability driving this growth.
At this point, you should know that different billing companies differ regarding their types of services
and how they perform them according to their clients. For instance, some companies provide coding
services, while some process billing is done when coding has already been done. However, some outsourced
managed billing services do A.R. management and bad debt collection, while others offer all the billing
services.
If your organization is new, you have more responsibility to put extra effort into patient care, so it is a good choice for new practices to gain outsourced administrative services so that you have enough time for better treatment. There are a lot of perks that prompt physicians and healthcare organizations to prefer 3rd-party revenue cycle management services. Health organizations should consider handling administrative services to external parties to gain these benefits and overcome all the complexities associated with billing. Here are the top pros of outsourced financial services.
Third-party billers typically charge either a fixed fee or a percentage of the collected amount for their services (4% to 9% as per MGMA), which is more economical than internal billing expenses.
| Expenses | In-house | Outsourcing |
| Salaries (for each member) | Yes | Fixed amount or percentage (No salary for each member) |
| Software cost | Yes | No |
| Hardware cost | Yes | No |
| Staffing cost | Yes | No |
Healthcare billing agencies are equipped with a skilled, professional, and certified crew that is well-versed and experienced in this task. These third-party billing experts gain information to submit and process claims to achieve accurate reimbursement. They also put their experience into finding loopholes in your organizations and eliminating them for better revenue.
Privacy, safety, and confidentiality are essential; therefore, medical billing firms integrate reliable, encrypted, and updated systems and adopt strict safety procedures in adherence to HIPAA guidelines to handle and share patient health information (PHI), escaping your practice from HIPAA violence penalties and bad reputation. The World Medical Association's Declaration of Geneva states its importance: "I will respect the secrets which are confided in me even after the death of the patient."
Third-party payment service providers strictly comply with state and federal statutes advised by OIG and insurers' requirements and updated coding rules. These billing agencies have policies tailored to meet individual needs and regulations by each insurer. They designate a compliance officer acting as the center of compliance who monitors the implementation of the compliance program and periodically revises the program in case of changes in laws and regulations.
Healthcare billing outsourcing ensures clean claims by emphasizing accurate coding, ensuring the claim is submitted, providing proper documentation supporting the claim, and showing that the service was medically necessary. Moreover, these firms also use software for the submission of claims accurately and establish a procedure to review the claim before and after its submission to ensure that the claim accurately represents the services provided, hence avoiding claim denials.
External billing providers increase revenue by cutting overhead operational costs and submitting accurate claims on time using EHR, EMR, and other reliable technologies and software.
Healthcare Revenue Cycle Management experts understand that if insurance contracts are not negotiated at a rate change, they are renewed at the same old rate. Therefore, top-leading medical Billing firms negotiate reimbursement rates with Medicare, Medicaid, and private payors. Before negotiating a contract, they obtain the market rate for in-network providers, the insurance contract rate for each service, and the service fee schedule.
Here's how non-internal billing professionals help you get reimbursed timely and adequately.
Patient registration and verification: An external invoicing service provider's billing
process starts with patient check-in, in which accurate information about the patient and its insurer is
obtained. This information is then verified to ensure a smooth flow of RCM.
Coverage/financial responsibility verification: In the next step, the billing provider
verifies the economic responsibility for the particular service by contacting the insurer through
mail/call, visiting the insurer's website, or reading the contract for verification to help you avoid
unexpected costs.
Open communication: If there are any out-of-pocket (OOP) expenses, they establish open
communication with patients to inform them about their expected financial responsibility.
CPT and ICD coding: The next step is coding, which begins after the physician provides
the treatment. To execute this task, professional 3rd party coders transform medical information into
updated alphanumeric codes. Medical coding is a process that depends upon a physician's notes and
indicates the procedures, diagnoses, and use of equipment & supplies.
Claim auditing & submission: After assigning accurate codes, external billers perform
auditing before claim submission to detect any issue that might lead to claim denial. After ensuring
correctness, they submit clean claims using CMS-1500 or UB-04 claim forms with the help of advanced
software.
Follow-up: The external RCM specialists strictly follow up on the submitted claim to
check its status (accepted or denied) and get informed in case of denial or rejection so they can
resolve the issue promptly.
Payment collection: These billing platforms collect insurer reimbursement once the
payer accepts the claim. If there's an outstanding payment, their specialized crew follows up on A.R. to
receive payment.
Sending patient statement: If the patient is responsible for any deductible or
copayment, send a patient statement detailing their charges, EOB, and why they still owe money despite
having insurance. Clear communication between billers and patients eliminates confusion.
Analytics and reporting: Analytics and reporting are two primary services such
companies perform that help healthcare professionals examine financial outcomes in depth and compare
them with previous performance to determine the success rate using KPIs. They also provide detailed
reporting of the billing process, areas of improvement, and revenue rates on a weekly, monthly,
bi-annually, and annual basis. In this way, external administrative parties work.
Before outsourcing, you should remember that some risks might be associated, such as a lack of financial resources for conversion, privacy and security concerns, difficulty finding a perfect vendor, loss of control, communication barriers, unforeseen costs, etc. But there is nothing to be worried about if you take precautionary measures and consider the tips below before selecting an overseas billing partner.
| How do you manage your remote relationship? |
| What procedures do you implement to find out external threats? |
| What training programs do you employ to escape internal information leakage? |
| How do you ensure compliance with regulations? |
| What KPIs do you use? |
| How many days do you take to manage denials, and what procedures do you use? |
| What technology and software do you use? |
| How accessible is your support team for communication? |
Third-party reimbursement is the payment healthcare providers receive from a third entity for patient
services. This entity is always someone other than a healthcare provider and patient, like private
insurance providers or government-funded programs. In the U.S., the most renowned third-party
reimbursement entities are Medicaid, Medicare, and commercial insurers, each with its own rules and
requirements that must be met for proper reimbursement. In healthcare, 3rd party payers are responsible
for paying most of the cost for the treatment depending on the type of insurance plan. At the same time,
the patient provides the information for accurate billing, such as information about insurers and
insurance plans. They give this reimbursement because the patient has a contract with them, but the
compensation provided by these payers doesn't remain the same, and medical practitioners need to
negotiate the beneficial rates after a limited time to receive the proper remuneration.
MedsIT Nexus offers exceptional medical billing services to help you overcome negotiation and
reimbursement issues. We use our extensive collaboration experience with MCOs and payers working with
government and private sectors such as Medicare, Medicaid, PPO, and HMOs to negotiate clauses to ensure
increments in charges each year. As most insurers don't pay for out-of-network providers, our
third-party negotiators implement effective negotiation strategies on your behalf to gain compensation
from such insurers for OON services. Everything in the contract is negotiable, and we help you with
that. Moreover, MedsIT Nexus' specialists stay updated with ever-changing reimbursement rules set by
third-party insurers to earn maximum revenue.
Clean claim: Third-party policies and billing guidelines refer to the procedures and regulations set by insurance companies that doctors must meet when billing to get reimbursement. For example, government payers have set guidelines for clean claim elements, as mentioned below.
Compliance: Moreover, compliance is required while billing, as OIG emphasizes. The
Office of Inspector General (OIG) requires third-party medical billing companies to implement
comprehensive compliance programs. These programs established by OIG ensure adherence to pertinent
Federal and State laws and the requirements set forth by Federal, State, and private health plans. A
compliance program should encompass these seven essential elements, including written standards of
conduct, designated compliance officers, complaint systems, complete training initiatives, disciplinary
measures for policy violations, ongoing audits, and policies prohibiting the employment of certified
individuals.
Standardized coding system: Medicare and other insurance programs demand a
standardized coding system so that claims are processed consistently. Payer-specific Local Coverage
Determination guidelines help coders verify compatibility. The HCPCS, CPT, ICD, and any other applicable
or revenue code should properly elaborate on the service provided.
Claim misconduct by provider: A unique guideline on obligations based on healthcare
provider misconduct suggests that if a non-clinical billing vendor finds out that their contracted
provider has made an error, the company should not submit that claim, notify the provider within 30 days
of this decision, and explain the reason why the decision has been made.
To follow the varying guidelines by payers, practitioners, medical billers, and coders must comply with
high-quality data standards using EDI and privacy regulations defined by OIG. These guidelines vary from
insurer to insurer and state to state, making the process complex and mandating healthcare organizations
to gain help from third-party billing companies to ensure they meet the billing guidelines, coding
standards, contractual agreements, etc.
MedsIT Nexus offers its decade of experience in providing high-accuracy financial services. We don't have any hidden charges and offer short-term contracts across the USA. Our advanced technology and certified crew boost the efficiency of billing and your practice's reputation by carefully processing each step. The comprehensive services of MedsIT are what you always longed for because we are experts in resolving A.R. issues and short turnaround time with the highest success rate & clean claim percentage and in negotiating the best contract rates for you
© MedsIT Nexus. All rights reserved 2024. Powered by MeshSq.
