Managing a healthcare practice is getting more challenging with each passing day. Therefore, more and more medical practitioners prefer outsourcing medical billing services – as an easier financial solution. Is billing that difficult – the answer is yes; it is a rather complex process, especially if your practice is undertaking in-house medical billing. Revenue cycle management (RCM) is the most challenging yet important part of the medical billing process. Secondly, healthcare providers also have their hands full dealing with new technology, government requirements, financial asset management, and taking care of their patients.
Challenge of In-House Medical Billing
Managing in-house medical billing can become extremely overwhelming, complex, and not to mention rather expensive. Lastly, learning how to bill correctly and then code for medical services is a complex skill that many providers do not possess. Therefore, errors in the medical billing process can lead to many problems down the road.
In House vs Outsourced Medical Billing
While both in house vs outsourced medical billing can benefit healthcare practices, what you choose for your facility must solely be based on the size and age of your business. Furthermore, your decision must also involve considerations including:
- The costs of running the practice.
- Volume metrics.
- Exactly what your business needs.
To make your decision easier, let’s take a look at some of the pros and cons of both in house and outsourcing of medical billing.
Advantages of in-house medical billing
There are a few benefits to in-house medical billing, but do those outweigh the advantages of outsourcing medical billing – let’s find out:
Control over Practice RCM
Maintaining control over Revenue Cycle Management (RCM) in the healthcare industry becomes essential for sustained financial health. Choosing in-house medical billing provides a distinct advantage by delegating the responsibility to familiar faces – individuals who have been integral to your organization for an extended period. Such familiarity ensures a smooth understanding of your preferred operational details, developing a team that informs you about even the tiniest details. Thus, the decision to retain in-house medical billing facilitates hands-on control over daily financial operations.
Flexibility in Approach
The ease of tracking and closely monitoring each phase of in-house medical billing means greater flexibility. As a decision-maker, you enjoy the liberty to experiment with new methods and initiate initiatives that could potentially boost the efficiency of your healthcare RCM. Whether these actions yield favorable outcomes, the key advantage lies in the autonomy to adapt and choose your action.
Proximity Matters
Physical proximity between your practice and the billing department is also important. Having them operate under the same roof enables instant connectivity. A mere stroll across the office allows you to address any issues your billing staff encounters. This proximity promotes efficient resolution of billing-related concerns, contributing to simplified operations.
Return on Investment
Considering the substantial investment in establishing an in-house medical billing team comprising skillful personnel and utilizing advanced billing technology, this model becomes vital. Further, fine-tuning of operational weaknesses and refining strengths within this framework ensures optimal results. This strategic approach capitalizes on the investment made over time, maximizing the return.
Disadvantages of in-house medical billing
Choosing in-house medical billing comes with its share of challenges. Understanding these drawbacks is vital for informed decision-making.
High Cost of Operations
Expanding your in-house medical billing team means adding to your financial load. Beyond salaries and employee benefits, the increasing cost includes expenses for billing software, continuous staff training, and staying well-informed of evolving technologies and regulations. This collective expenditure often surpasses the cost of outsourcing to a specialized third-party medical billing service provider, like MedICD.
Dependence on the Limited Staff
A small in-house billing team has continuing operational risks in case of unexpected events. If a key member takes an extended leave or two members resign simultaneously, the workflow can halt. Hiring and training replacements incur additional costs, potentially disrupting the RCM process. This highlights the weakness of relying on a limited staff for critical operations.
Susceptibility for Errors
Individual employees managing in house billing operations are prone to a higher likelihood of errors than expert outsourced RCM services. Furthermore, lacking an employee performance tracking system increases the risk of oversights, potentially compromising the accuracy and efficiency of the billing process.
Time Consuming
While in-house medical billing services offer direct control over operations, it also demands a significant investment of your time that could be allocated to core healthcare services. Therefore, this diversion of focus from patient care to administrative tasks may impact your reputation and patient satisfaction levels. Furthermore, statistics show that healthcare providers spending more time on patient care tend to have higher patient satisfaction rates, highlighting the importance of prioritizing clinical services over time-consuming billing processes.
Benefits of Outsourcing Medical Billing
Exploring the advantages of third-party medical billing over in-house practices can lead to significant improvements. Let’s dive into the benefits that outsourcing brings to your healthcare practice.
More Time for Patient Care
Medical billing outsourcing reduces the burdensome tasks of hiring, training, and managing billing staff. Industry experts take charge of RCM needs, including bill payments and reimbursement follow-ups. Moreover, shift facilitates you to redirect your time towards maximizing your medical expertise, focusing on patient care, and expanding your practice. Studies have shown that healthcare providers prioritizing patient care see an increase in patient satisfaction rates by up to 20%.
Improving Accuracy and Compliance
Outsourcing to expert medical billing service providers ensures the professional management of all billing-related processes. Specialized billing providers dedicate themselves full-time to the execution of outsourced RCM. This encompasses following legal formalities, following up on rejected claims, and maintaining industry standards of accuracy and efficiency. This focus on precision and compliance has been proven to reduce billing errors by up to 40%, contributing to a more financially stable healthcare practice.
Better Revenue Optimization
Outsourcing RCM not only facilitates your staff to redirect their focus from billing operations to patient care but also saves substantial costs associated with running an in house medical billing team. Eliminating expenses for software, supplies, administrative costs, salaries, and employee benefits for in-house billing staff contributes to improved financial efficiency. Additionally, third-party providers cover all facets of revenue generation, resulting in a potential 20-30% increase in overall revenue for your healthcare business.
Better Transparency
Contrary to misconceptions, medical billing outsourcing does not mean giving up access or control over processes. RCM providers share data and details of your billing operations periodically. This transparency allows you to request performance reports, offering valuable insights into the execution and management of your billing operations.
Fewer Errors
RCM service providers, with their daily expertise in handling claims, significantly reduce the chances of errors compared to practices managing in-house medical billing operations. Moreover, their industry expertise, with simplified processes, results in a minimum error rate. This has been observed to decrease billing errors by up to 50%, ensuring timely payments and minimizing revenue loss.
Reasons why your Practice must Outsource Medical Billing
As medical practices evolve, more are outsourcing their medical billing needs. Why? Simply put, third-party medical billing companies optimize revenue for your practice, acting as your advocates against insurance companies, ensuring you receive every deserved penny per claim.
Some key reasons include:
- Making More Money
After transitioning from in house medical billing to outsourced billing, many medical practices experience a remarkable increase in total revenue, ranging from 10% to 30% within the first year. This is attributed to the expertise of medical billers in using the medical coding system to maximize revenue. Moreover, when claims are denied or remain unpaid, medical billing outsourcing companies dedicate their efforts to ensure proper compensation for the services provided.
- Freeing Up Internal Resources
In many smaller practices, medical billing is often handled by a family member or friend. However, keeping up-to-date with the constantly changing medical coding requirements and industry dynamics requires time and ongoing training. Outsourcing lessens this burden, allowing your internal staff to focus on other essential tasks. This strategic shift improves efficiency and contributes to a more simplified and productive work environment.
- Less Stress
Medical billing outsourcing means entrusting the complex responsibility to a reliable and knowledgeable source. It relieves you from handling questions or concerns about insurance claims and ensures you receive proper compensation for your services without the stress of managing the financial aspects. With expertise in insurance claims, third-party medical billers work the complexities, providing you peace of mind that your revenue is in capable hands.
- Motivated to Boost your Practice Revenue
Third-party medical billers operate on a set percentage of the doctor’s payment for each service. This motivates them to actively seek ways to increase your revenue, developing a true partnership. In contrast, in house medical billing staff is often paid hourly or by salary, leading to lower motivation to secure the best rates. Furthermore, studies indicate that outsourced billing leads to a 15-20% increase in revenue due to this motivated approach, ensuring you receive optimal compensation for the services provided.
- Field Expertise
Medical billers are professionally trained to master your specialty’s specific codes and services. Their expertise enables them to inform you of fee structures for various services and employ creative coding approaches to maximize revenue. This proficiency is vital for the increasingly challenging insurance claim denials. Outsourced medical billing allows you to leverage their expertise, focusing on what you do best: helping people.
Final Word
A strategic balance between outsourced and in-house medical billing is vital for optimizing efficiency and maintaining a robust healthcare practice. Furthermore, in house medical billing may seem convenient initially, but it poses long-term challenges. Firstly, managing billing internally demands considerable time and effort, diverting focus from core healthcare tasks. Additionally, staffing, training, and technology often result in increased costs. Moreover, the risk of errors rises, impacting revenue. Lastly, the evolving healthcare regulations require constant updates, which in-house staff may struggle to keep up with. Opting for outsourced billing lessens these issues, ensuring sustained efficiency and financial well-being of your healthcare practice.
