Owning and operating your own medical practice is a thrilling way to move your medical career forward.
It gives you the opportunity to offer outstanding medical care, exactly how you want to. It provides you the freedom and flexibility to hire who you want.
And, you have your own autonomy to handle your own workflow.
However, opening your own practice is not without its challenges.
Not only do you need a firm handle on medicine, but it also requires strong business acumen and budgeting skills.
This includes understanding revenue and debt projections, buying proper equipment, and making sure you have access to medical billing software.
When it comes to medical billing, you have two options—purchase your own software to run in-house or outsource your medical billing.
While a case can be made for purchasing your own medical billing software, it’s often cheaper to opt for medical billing outsourcing, and just as effective.
This article will offer insight into how medical billing outsourcing works, the pros and cons, and the best options for medical billing outsourcing.
How does medical billing outsourcing work?
When you start a medical practice, you have two options for medical billing—keeping everything in-house or outsource.
In-house medical billing is when all billing aspects are handled by your own team. This means investing in a medical billing software and hiring a team that knows how to use the software, and follow up with both insurance providers and patients.
Depending on the software you use, in-house billing could also include hiring certified coders and billers and making sure your team is up-to-date on industry rules and regulations.
Outsourcing medical billing services, on the other hand, means a healthcare provider hires someone outside the practice to handle all the billing.
Medical billing outsourcing may sound like a scary move forward, but the medical billing outsourcing market was valued at nearly USD $6.3 billion in 2015. It’s also expected to reach USD $16 billion by 2024.
Outsourcing is a solid way to manage medical billing, save money, and not have to worry about billing staff turnover in your own office.
To help you make a better decision as to whether in-house billing or medical billing outsourcing is for you, let’s look at the pros and cons of outsourcing.
Pros of medical billing outsourcing
If any of the following advantages appeal to you, then medical billing outsourcing may be the best bet for you.
Medical billing outsourcing frees you up so can focus more on patient care.
The reason you went to medical school was to provide excellent patient care, not get caught up in the details of medical billing.
When you outsource your medical billing, you can spend your time focusing on what you do best—providing excellent medical care.
Outsourcing medical billing is especially helpful for small physician groups. If your practice consists of only you and a few other providers, you need to spend your time seeing patients, not collecting the bills.
Outsourcing saves money.
Large hospitals and medical practices have an advantage over small practices in terms of budget.
This means large hospitals and practices can afford to bring in a team of qualified medical coders and billers that are up-to-date on the latest healthcare law and software programs.
Smaller practices don’t have the same budgets and will benefit financially from medical billing outsourcing.
If you have a small practice, not only will you save money on software and how much it costs to outsource vs. hire, but you’ll also save costs when it comes to turnover.
When you outsource your medical billing, you can rest assured someone qualified will always be available to handle your billing.
Outsourcing reduces billing errors.
When you outsource your medical billing, you ensure that you’re staying in touch with an experienced medical biller. This means your claims will be coded properly and submitted in a timely manner.
You don’t have to worry about skilling up your billing team, training people, or dealing with errors. A medical billing company will only assign you a medical biller that knows how to get the job done and knows how to do it properly.
This, in turn, helps you reduce the number of denied and rejected claims, and helps keep your bill collecting running smoothly.
Outsourcing medical billing improves patient satisfaction.
When a patient comes into your office, they want your undivided attention. They don’t want a healthcare practitioner that is too bogged down in paperwork to be able to dive deep into their medical concerns and provide the best care possible.
Even if you delegate your medical billing to your office staff, it’s important to remember they have other tasks including answering phones, scheduling calls, and making sure your practice operates efficiently.
When you reduce the burden placed on you and your staff by outsourcing medical billing, you increase productivity, efficiency, and morale. This serves you, your staff, and, most importantly, your patients.
Outsourcing keeps finances on track.
What happens to your bills when your medical billing takes paid vacation?
Your bills sit on a desk and no one pays attention to them.
When you outsource your billing, it regulates your cash flow, ensures you don’t fall behind, and produces a steady flow of income.
Outsourcing ensures industry compliance.
Are you aware of the latest health care trends, laws, and regulations?
Healthcare is always changing with new legislation and insurance company policies. It’s almost impossible to keep up.
That is, it’s impossible to keep up, unless your sole career focus is on understanding the medical billing world and healthcare compliance laws.
When you handle things in-house, it’s difficult to stay up-to-date. A medical billing company, on the other hand, will always keep current on changes in regulations and requirements.
Outsourcing increases income.
When it comes to running a medical practice, you want to do everything in your power to remain cash positive, collect bills on time, and make as much money as possible.
Medical billing outsourcing reduces overhead costs and improves collection rates. This is especially true when medical claims are submitted quickly as it increases the chances of reimbursements.
Don’t be one of those practices that sends bills out half a year after the fact.
Cons of medical billing outsourcing
Now that you know some of the top reasons why medical billing outsourcing is a good idea, let’s take a look at some of the cons.
If these cons ring true to you, you may be better off keeping medical billing in-house and purchasing a top-notch medical billing software to help you stay organized.
You don’t know your employees.
Collecting on bills is one of the most important factors when it comes to running a practice. After all, if you don’t have a solid way to collect bills, you won’t make money.
It can be difficult to outsource this task to people you don’t know and haven’t met personally.
Yes, it’s true that most medical billing companies do a great job and have expertise, but it can also be difficult to hire someone you have never met in person, especially when it comes to handling bills.
You don’t have control over your medical billing employees.
When you outsource medical billing to a medical billing company, you outsource everything.
This means you don’t hire your team, manage your team or check up with your team. The team that handles your billing will be managed by the company you hire.
This can be considered an advantage for practices that can fully trust their medical billing company and don’t want to have anything to do with the billing side of the business.
However, many practitioners may see this as a disadvantage. They may want to have a say in how, when, and who works on their billing projects.
Potential security problems.
HIPAA privacy laws are no joke, and if you don’t outsource your medical billing properly, you could breach privacy and security laws.
Keep in mind that the more people that have access to private patient information, the greater risk you have for a breach.
To avoid this problem, ask your medical billing company upfront how they handle privacy and security and how they remain HIPAA compliant. Any reputable medical billing company will provide you with this information.
If they don’t, then it’s best to move on and keep searching or to bring things in-house.
Patient satisfaction may decrease.
Medical bills are expensive and with many third-parties involved including insurance companies, the government, healthcare alternatives, and a third-party billing company, it can get confusing on who to turn to for guidance on paying bills.
If a patient calls your office expecting to get answers on billing or even to pay their bill and you refer them to another company, it could be discouraging.
Again, it won’t be a problem for all companies, and if you fully vett your medical billing company, it might not be a problem at all.
Just be aware this can be a potential disadvantage and put preemptive practices in place to make sure your customers understand how to get answers to their billing questions and where to turn to in order to make payments on time.
You could run into hidden costs.
When you keep your medical billing in-house, you know exactly how much it’s going to cost. You know how much you will pay your employees, how much your medical billing software costs, and there are no surprise expenses.
Outsourcing medical billing could present you with costs you didn’t anticipate. For example, you may have to pay a lawyer to help negotiate your contract. You could also need to hire a liaison between your practice and your outsource company.
Before you outsource your medical billing, take the time to understand all the costs involved in the process.
Problems with scheduling.
In-house employees have set business hours. You can list these hours on your website and patients know exactly when they can reach someone and when they cannot.
When you outsource your medical billing, it’s possible that your schedules won’t match up perfectly. You can’t change employees work hours to match your patient needs, and you don’t have control over staffing on holidays, etc.
While this is a small caveat, it could prevent problems for some patients.
Medical billing limitations.
When it comes to medical billing, you have to go with a company that knows the ins and outs of medical billing, privacy laws, compliance, etc. Some medical billing companies may lack in either knowledge or the services they provide.
For example, your medical billing company might not be able to access medical records or patient information, and this can create a lag in the process.
When you contract your work out, make sure you communicate exactly what services are provided, how you will communicate, and whether or not there are any limitations.
Who can I hire to outsource medical billing?
If medical billing outsourcing sounds like the perfect fit for you, here are some places to start looking.
Each company provides different features and benefits and what you end up selecting will depend on your needs, your budget, and how much involvement you want in the process.
However, these companies are a great starting point in your research:
When researching, each company to find the perfect fit, make sure to ask important questions including:
- What percentage of collections does the billing service take and are there any fees/additional
- What kind of reporting do you offer?
- Does your service include access to your system?
- What is your process?
- What are your contract requirements?
- Who can we turn to for help with problems?
- Do you provide medical coders?
When you ask the right questions to the best providers, you’ll be able to come up with an affordable solution for your healthcare company.
And, there you have it! That’s almost everything you need to know to decide whether you will keep your medical billing in-house and purchase a medical billing software or if you’ll outsource your medical billing to a competent team.
Remember, if you outsource your medical billing, make sure you have a way to track the time of your remote employees. Look into Time Doctor for more information.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.