Outsourcing Medical Billing
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Outsourcing Medical Billing
What is medical billing? Medical billing refers to the process of creating healthcare claims to submit to insurance companies or healthcare payers so that the healthcare facility can be paid for services rendered. Medical billing and medical coding create a standardized document from information obtained in medical charts so that the healthcare payer knows what they are paying for it and why that service was ordered. Not every healthcare provider has an in-house medical billing a coding department. Instead, they choose to utilize outsourced medical billing services.
There are many benefits to outsourcing medical billing. Coordinating with a medical billing company can provide faster insurance payouts, enhanced transparency, fewer medical billing errors, reduced costs, and more. Medical billing outsourcing serves to reduce overhead and in-house administrative costs, allowing healthcare providers to focus on giving top-quality care to patients. Medical billing companies are full of experienced professionals who are dedicated to coding and billing quickly and correctly. This can result in fewer billing mistakes, which means a faster insurance payments and a reduction in costs, thanks to fewer errors.
There is also an important compliance element of medical billing and coding. Compliance is chiefly important as noncompliant claims get denied, disrupting the revenue cycle and creating trouble for a medical practice. Medical billing companies must remain up-to-date on compliance policies in order to remain competitive. They are very likely to take compliance most seriously in order to reduce the number of denied or challenged claims, streamlining revenue cycles and reimbursement.
While outsourcing medical billing to third parties isn’t always an option at every practice, the healthcare providers that do choose to outsource can see a lot of benefits as a result. If it’s not possible to outsource, there are also tools that healthcare providers can implement that simplify medical billing and coding to streamline processes and reduce errors.
- Medical Billing Industry
The medical billing outsourcing market is created when healthcare providers have an overwhelming amount of invoices to generate and limited administrative staff. Precise medical billing is time intensive and requires a great amount of knowledge, and it can be cost-prohibitive to keep an entire department of in-house medical coders and billers. This is also dependent on the size of the practice. Medical billing services for small practices have different needs compared to larger practices.
There are several disadvantages to in-house billing, especially for small practices:
- Upfront costs for in-house billing include labor, technology, hardware, training, and ongoing expenses for maintaining the billing system. Ongoing expenses still include labor, software costs, training, and more. There are also other overhead costs to consider – in-house space for a billing department, additional bonuses, and other costs associated with taking on more staff.
- Billing capacity
- It may not be worth the fixed costs of determining expected revenues, managing partial payments, and collecting co-pays and deductibles if the expected revenue will not exceed the fixed costs.
- Medical billing and coding is not an entirely fixed process – the entire industry updates to a new standard every few years. That means that software and staff must also be kept up to date in order to retain compliance. Without compliance training, claims may be more likely to be denied, and the practice will reach a lower reimbursement rate.
- Staff Reliant
- If a billing department is very small, consisting of only one or two people, operations and revenue may be disrupted due to personnel events such as sick leave, vacation time, or resignation.
Outsourcing to companies within the medical billing industry can result in a reduction of costs for small practices and large practices alike. It also often results in better results in a shorter amount of time because in-house staff do not need to be trained in billing and coding.
Medical Billing And Coding Services
Medical billing and coding services are not exactly the same – but they are two sides of the same coin. Medical coding refers to the process of extracting billable information from a patient’s medical record and clinical documentation. Medical billing uses those codes to create insurance claims and bills for patients.
There are two different kinds of medical codes – procedure codes such as CPT, HCPCS Level II, and ICD-10-PCS tell the healthcare payer what service the healthcare provider performed. For example, if a healthcare provider sets a cast or performs an X-Ray, there are unique codes associated with those services.
Diagnostic codes, such as the ICD-10-CM code set, tell the healthcare payer why those services were rendered. There are more than 70,000 unique identifiers in the ICD-10-CM code set, which is maintained by the World Health Organization. ICD-10-CM replaced ICD-9-CM in 2015, and ICD-11-CM went into effect globally on January 1, 2022. Just over a year and a half ago! However, because changes in the coding and billing system are so complex, it may take practices in the United States years to fully implement the ICD-11-CM.
However, when healthcare providers choose to outsource to medical billing company services, they are the least impacted by updates to coding and billing standards. Medical billing and coding companies know that they must remain up to standard and compliant if they want their businesses to remain competitive. For that reason, healthcare providers do not have to worry about changing code systems – as long as their selected billing and coding partner is prepared to make the switch to a new system.
It can take years of education for medical billers and coders to learn how to precisely code and bill effectively. With thousands of unique identifiers and code combinations, medical coding is skill-intensive. Precise medical coding is necessary for effective medical billing. This is because medical billers take the codes that coders have provided and transform them into insurance claims. If the codes are found incorrect, insurance will deny the claim and disrupt the revenue cycle of the healthcare provider.
Outsource Billing Services
It can be hard to know when to outsource billing services for healthcare practices. Billing services for small businesses are ideal because the fixed costs that are required to bill in-house are often not sustainable for smaller practices that are just beginning to grow. However, medical billing services are also utilized by large practices. This is for many reasons, as there are lots of benefits to outsourcing medical billing.
One of the reasons that medical billing outsourcing is utilized by small and large practices is its scalability. Many small practices cannot afford the upkeep of even a small billing staff due to the costs of salary, hardware, software, and training. However, large practices have a similar problem with one exacerbation – they cannot afford to keep an in-house billing and coding department that is capable of keeping up with their coding and billing demand. Many different types of healthcare organizations can use the same billing and coding services and receive similar results – billing services for mental health providers would follow the same standards as any other kind of healthcare service provider.
A healthcare provider can choose to utilize a medical billing company when they are smaller and scale their services accordingly without worrying about a surge in coding and billing. There may be some renegotiation when it comes to the outsourcing company, but any additional costs are likely to be recouped by fewer errors and well-processed claims.
The HIPAA act also severely impacts medical billing services in the USA jurisdiction. Contrary to popular belief, HIPAA has nothing to do with the Hippocratic Oath – an oath that healthcare workers take to do no harm. HIPAA stands for the Health Insurance Portability and Accountability Act, and it mandates that medical codes must be standardized across systems and serve as a universal language. Healthcare providers that don’t use HIPAA-compliant codes can find themselves in a lot of legal trouble. Medical coding and billing services make compliance one of their top priorities so that healthcare providers can focus on providing quality care to patients.
Best Medical Billing Companies
It can be difficult to select the best medical billing companies, especially when you don’t know what’s out there. There are way too many options to provide a medical billing companies list – and maybe you don’t need one. PracticeSuite offers complete Revenue Cycle Management, measuring and benchmarking reimbursement rates, working with providers to increase collections, managing insurance payouts, and more.
PracticeSuite gives healthcare providers in-house control with all the benefits of outsourcing. Get access to complete revenue cycle specialists with experience in patient payments and final insurance reimbursement. View your medical billing performance in real time with up-to-the-minute dashboard reporting and unrivaled transparency. PracticeSuite team members work alongside your practice staff to help patients and communicate with payers. PracticeSuite’s state-of-the-art technology also improves first-pass claim acceptance and automated remittance, greatly increasing the speed of payment cycles.
There’s no need to learn how to start a medical billing company on your own – partner with PracticeSuite to manage your business better and get clients paid faster. PracticeSuite offers complete revenue cycle management, but we also license our software to other medical billing companies that are looking for an affordable system that can scale with their business and their clients. And the best part – there’s no competition between PracticeSuite and our partners.
PracticeSuite’s medical billing software can handle rejections, denials, and payment postings for all clients on one dashboard. It can also serve as an all-in-one solution, with scheduling, billing, telehealth, EHR, e-payments, patient portals, and more all directly in the same software. Don’t need all that? No problem! PracticeSuite can be customized to suit your needs so that you don’t get – and you don’t pay for – anything that you don’t use.
PracticeSuite is a comprehensive solution with 155 billing specialties and over 60 clinical specialties, and it also offers UB04 and Workers Comp solutions. PracticeSuite is cloud-based, enabling your teams to work from anywhere and with any healthcare provider from anywhere in the world. PracticeSuite also offers inter-office communication with task assignments to keep your teams all on the same page.