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Is Your Medical Billing Company Negligent?

Outsourcing your medical billing can be a boon for your practice, but not if you’re with the wrong service.

There’s significant variation in the way physician billing companies function, so unless you perform a thorough due diligence before you enter into a contract, you may not save the amount of money you expected. Worst case, you could end up in serious regulatory trouble. Today, we’re highlighting three signs your billing company is not serving you as well as it should be.

Medical Billing Software Negligent

We’ve written several posts on features to look for in a billing company, including state-of-the-art technology and complete reporting transparency. Today, we’re highlighting three signs your billing company is not serving you as well as it should be.

It isn’t HIPAA compliant.

Healthcare regulations are strict and getting stricter. Any billing service vendor you use should be completely up to date on the latest regulations, HIPAA and otherwise. Most importantly, the service must sign a business associate agreement (BAA) with your practice that contains a privacy policy, a security policy, and a breach notification procedure. Remember that your billing service is a legal agent for your practice, meaning the practice is liable for the service’s actions in some circumstances. Make sure your BAA covers personal health information (PHI), off-hours/off-premise employee access restriction to software that contains PHI, encrypted data transmissions, protected data storage, procedures for data destruction, and what happens in the event of a breach.

It doesn’t carry errors/omissions and liability insurance.

Because your practices is entrusting the billing service with financial information and patient records, it’s critical the service carry proper insurance. Errors/omissions insurance is similar to malpractice insurance, offering protection in the case of misconduct by an employee. Any service you use should also carry liability coverage, which will pay for breach disclosure communications and lawsuits in the event of a security breach involving patient records.

It doesn’t have a comprehensive contract.

It goes without saying that you shouldn’t engage a billing service without a contract and that you should carefully review the contract before signing. In particular, make sure you understand the terms of service, which outlines the service-level guarantees being made. Also, be sure there’s an indemnification clause that holds the practice harmless in the event the billing service submits fraudulent bills, miscodes bills, or allows PHI to get into the wrong hands. Finally, make sure the contract has termination details such as how the billing service will destroy or return your patient records, both electronic and paper.

Many factors affect your choice of medical billing service, but no matter how low their price or how personable their sales rep, if they don’t meet the three criteria above, they are not serving your practice well.

2 thoughts on “Is Your Medical Billing Company Negligent?”

  1. Hello,
    I work at a Dr\’s office and we are having issues with our former billing company. When we terminated our contract, they denied access to patient\’s records and we have a ton of money in A/R which we have no access to. We have been having a very hard time communicating with the company. Are there any attorneys that specialize in this sort of problem? Any help would be much appreciated.
    Thank you!


      Is Withholding Patient Data the Same as Ransomware?

      Beth, yours is a great question and one that comes up frequently as small local billing companies may not be familiar with the implications of withholding patient records. Contact your doctor’s legal counsel in a timely manner to press this issue. Usually a demand letter will suffice. This is because withholding patient records from a doctor transgresses a number of legal risks, one of which is interfering with patient care. The doctor needs past notes for proper treatment.
      If your canceled billing service does not comply quickly enough, they\’ll be responsible for the legal costs to rightfully obtain the records. No judge in this country that will side with anyone withholding patient records from a doctor, clinical or otherwise. Even wording in an “End User License Agreement” (EULA) to the contrary will not be enforceable by the billing service.
      Often there is language in a billing service service contract for fees to obtain a backup.
      In the event that the billing company is dissolved and no recourse is possible, you still have two avenues to pursue. First approach the software maker and explain the issue. They typically will be very willing to help and provide the doctor a backup of his patient data.
      Lastly, look to your last backup, or the last A/R report ran.
      There are any number of companies online that can hack a backup and give you the data in an excel spreadsheet. Your last A/R report will be sufficient for the doctor to write off tax losses. If the report is detailed enough, it may also show insurance balances along with a total balance from which you can divine some patient balances.
      It is remarkable to me how often we hear of services or software companies, (mostly small local entities, but sometimes large ones too) trying to pull such a trick like this and hold the doctor over a barrel by withholding their data.
      We have a word for it: Ransomware, which is a crime.
      In the end, the doctor will always be the owner of their patient records. But it is just because of this real potential, that the article above highlights several key points aimed at eliminating unpleasant and unnecessary risk like this.
      1. Make sure the contract has termination details such as how the billing service will destroy or return your patient records, both electronic and paper.
      2. Look for a billing company that offers cloud technology that provides complete work visibility and reporting transparency – including the ability to log into the software yourself and run reports.
      3. No matter how low the price or how personable the representative, if they don’t meet your toughest criteria, don’t contract them.
      Finally, and this brings up a great point, when asking for references, ask for a previous client and see how easy their exit was.

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