According to the Medical Billing Outsourcing Market Analysis report by Future Market Insight, it is expected that by the end of 2032, the US would account for the highest gross revenue of $23.4 billion. A significant turn towards medical billing outsourcing has been observed. This blog will explore the 10 benefits of medical billing outsourcing while shedding light on the billing procedures. Additionally, a comparative analysis of in-house vs. outsourced billing will help you find the best fit for your practice.
What is Medical Billing Outsourcing?
Medical billing outsourcing is the practice in the healthcare sector where healthcare providers such as hospitals, doctors, clinics, etc. allocate the duty of managing all of their medical billing and revenue cycle management operations to a dedicated third-party partner. These entities, known as “medical billing service providers”, are specialized in handling the intricate and time-consuming processes of medical billing and coding. Their role includes:
- Charge/Coding Review
- Payment Posting
- Claim Submission
- Reprocess and fix Claim rejections
- Process Appeal
- Accounts Receivable Management
- Patient Payment
How Medical billing Outsourcing typically work?
Here is a step-by-step guideline for how medical billing outsourcing works.
Step 1 Patient Interaction
Healthcare professionals treat patients and create records of the services they acquire and the total expenditure of those services.
Step 2 Documentation
Healthcare providers set up complete documentation, including data such as diagnosis, laboratory tests, treatment procedures, etc.
Step 3 Medical Coding
Medical coders then assign the specific codes to a specific diagnosis, its treatment, and other services. These codes make it easy for medical billing companies to claim insurance.
Step 4 Claim Submission
Medical billing service providers compile the coded data and submit claims to insurance companies.
Step 5 Follow-up and Payment Posting
The outsourced billing companies have complete surveillance in order to check the status of claims,follow up with payers for any denials, and post payments received from insurance companies.
Step 6 Patient Billing
The billing companies also have a duty to send bills to patients for their part of medical expenses to pay, such as deductibles, copayments, or any other remaining payment.
Step 7 Reporting and Analytics
In order to help healthcare providers understand their financial situation, billing companies provide them with a detailed report, including analytics.
10 Benefits of Medical Billing Outsourcing
Outsourcing medical billing services allows the healthcare facility to better focus on the health of their patients. It enables the providers to improve the standard of care. Following are some important benefits of medical billing outsourcing:
Medical Billing Outsourcing improves cash flow
Outsourcing medical billing to a third entity accelerates the reimbursement and billing process, reducing the chances of errors. A good medical billing service provider company maintains consistency in cash flow and expands with the passage of time. It delivers automated software, prompt follow-ups, and fast recoveries.
Allows Medical facility to focus more on Patient Care
By outsourcing medical billing, the medical facility can focus on its core functions, such as providing patient care and medical attention. It is logical to state that the main obligation of a provider is to spend most of its time on medical services and not be overburdened by billing operations and financial aspects.
Accurate Credentialing
Credentialing is an exhausting procedure that might result in delays or denials. Medical professionals can rely on a third party to take over and handle all the credentialing services. The billing company streamlines the procedures and delivers results promptly. This lowers the tension in the already overloaded operations of the facility.
Medical billing outsourcing reduces billing errors and lowers labor expenses
When an in-house team handles billing, the facility bears extra expenditures such as the costs of recruitment, training, and onboarding. The primary responsibility of a billing company is to ensure that their billers are properly trained so that there is no chance of any claim denial. Expert billers make it certain that claims are submitted accurately and on time. This helps maximize reimbursement on future claims.
There is no need for constant technological advancement
A medical billing department requires upgraded technology to handle the billing process internally especially when they are setup separate. Regular changes in the billing procedures make it necessary to pay an extra fee for the software that must adhere to industry demands. If you outsource the whole department, you don’t need to worry about buying new technology or training your staff.
Reduces the cost of logistics
A proper IT setup and office space is required For a billing staff to work efficiently along with software. These logistical costs are automatically reduced when you outsource billing. The billing company operates independently from medical facilities in a separate office with billers and coders who work for them.
Revenue gain for providers
Outsourcing medical billing results in revenue gains for the providers. Every year, a huge sum of money is lost due to claim denials or rejections. Facilities that outsource the billing department eliminate this income loss and run a smooth flow of claim submission and payments being received. A steady cash flow is vital for the success of any medical practice.
Outsourcing protects patients’ data.
Medical billing outsourcing makes sure that the data is transferred in the safest possible manner. The information that is being passed between the provider and the payer is incredibly personal and extremely valuable in the market. This includes private information such as medical history, addresses, family trees, and other important details that can be misused by any party. HIPAA-compliant billing companies guarantee the security of personal information not leaked at their end.
Speeds up the revenue cycle
An effective medical billing company has a mechanism for swift claim submission. The claims can be reimbursed faster if they are filed as soon as possible. An efficient EHR system and medical billing service reduce errors that lead to claims being denied and keep the claims that are unpaid in the system until they are paid.
Verify the patient’s insurance status.
Medical billing companies can automatically verify the patient’s insurance coverage. Manual insurance is a waste of time and resources and can be avoided. Outsourcing companies can display the status immediately. From the data, you can easily detect who has met a deductible, what is covered, and whether any pre-authorization is required.
In-House Medical Billing vs. Outsourced Medical Billing. Which one is better for you?
At some point, the health professionals find it difficult to continue the in-house medical billing because, when the business expands, it is quite challenging, and thus, outsourcing the department is the only solution left. The decision between in-house and outsourced approaches depends on the size of the company, operating costs, and volume data. Pros and Cons of In-House Medical Billing
| In-house Pros | In-house Cons |
| Control RCM directly. In in-house medical billing, providers can assign the whole task to the people of their own trust. The in-house team knows how you want to execute the billing procedures, so there is no confusion on both ends. The team in charge keeps you updated on every single detail. | Greater Dependency on Limited Staff: If the healthcare facility faces a shortage of crew members for billing, then you have definitely risked the whole project. In any emergency where some of your members need urgent leave, your billing and coding departments will be marginalized. |
| Easy to Access: You can easily access your billing department and resolve any issue by just walking across the office to your RCM’s workplace. The accessibility of the billing department is a major advantage of an in-house billing system. | Costs: To start a billing house, the practice must bear some expenses, including advanced billing technology, dedicated employees, billing software, hardware, and the training of the staff. Furthermore, any new updates and modifications to software can also be challenging and require extra money. |
| Flexibility: As you can watch and observe the whole process by yourself, you are in a favorable position to try new strategies and implement initiatives that you believe might help the RCM because you can monitor and witness the whole process. | Crucial to have a high level of billing capacity: Calculating the estimated revenue, managing claim submissions, rejecting claims, handling partial payments, and collecting deductibles and copays are all time-consuming tasks that require practice to accomplish. |
| Return on Investment: If a medical facility has a well-developed infrastructure to run its billing department and has already invested in billing technology and training courses for its employees, outsourcing is simply a waste of time and a significant amount of money. | More Room for Errors: There is no comparison between a highly professional and skilled staff specializing in outsourced medical billing and your capable in-house team. The probability of error is substantially higher when managed by in-house staff. |
Pros and Cons of Outsourced Medical Billing
| Pros of Outsourced Medical Billing | Cons of Outsourced Medical Billing |
| More time to spend on patient care and treatment: By outsourcing the billing department to a third party, the facility can devote all of its time to patient care and can find better ways to treat them. There is no need to spend time hiring new staff, training them, and managing billing work. | No Direct Influence Over RCM: Since the operations of billing and coding are handled by a professional entity, the medical facility has no direct control or influence over RCM. The company follows its own pre-determined processes and techniques that are compliant with the company’s own rules and policies. |
| Margin of Error is zero: Being an expert in billing and coding, the company handles claims and optimizes billing procedures in such a way that the margin of error is minimized. | Hidden Fee: As with any other contractual service, there may be certain hidden fees that were not disclosed during the agreement. The provider must read the contract thoroughly and look for fine-print charges such as fees for sending mail reports and sharing printed statements. |
| Improved Revenue Optimization: The most significant benefit of outsourcing medical billing is that it helps the medical staff shift their focus from billing procedures towards patient care. It saves you money as you don’t need to spend it on advanced technology, computers, supplies, employee salaries, software, etc. | Variable Cost Method: Every medical billing service provider company has its own payment method. Some charge a fixed fee, while others take a percentage of your income. This means if a facility earns more, they will pay more to the billing company. Thus, it makes it difficult for the practice to budget the monthly expenses. |
Final words
The decision between keeping the billing in-house or outsourcing it to a third party is quite tough, as it is important for the growth of the business. By understanding the key benefits of outsourcing, the healthcare sector can use this innovative strategy to enhance operational effectiveness and thus improve patient care.
Choose MedHeave as best billing outsourcing service
When it comes to choosing the best billing outsourcing service for your healthcare facility, MedHeave stands out as the top choice. It streamlines the billing and reimbursement processes, ensures consistent Cash Flow, reduces delays and denials, safeguard patient’s data, and automates the procedure of verifying a patient’s Insurance coverage. Contact us for further details.
