The choice to outsource your medical billing can yield substantially better results than the choice to keep billing in-house. Why? Because a properly structured outsourced billing relationship insures that the medical billing company succeeds by making you succeed.
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
This is a critical distinction that is easily missed because of the misplaced belief that if the billers work for the practice then they care more about its collections. I am not saying they do not care, but I am saying that when your biller has their economic incentives completely aligned with yours (as with a medical billing service) it makes a big difference in how they think about your medical billing and how well they perform their job.
In a conversation I had recently with a busy cardiologist I heard a story that is not unusual. One of the office's medical billers called in sick. Some information was needed while she was out so the office manager went looking through her desk. She did not find the information she needed, but she did find over $40,000 worth of claims that had not been billed and had gone beyond the timely filing deadline. That is right, $40,000 worth of claims that could not be billed and for which no money would ever be realized. Upon the billers return she was "sternly reprimanded for this egregious error. Not fired, but reprimanded for costing the practices tens of thousands of dollars. There is no alignment of incentives present in a situation like this.
Why wasn't more severe action taken? Because of concerns with upsetting the billing staff and exacerbating a staffing problem that existed. The biller was moved from follow-up to the front desk where she is now being trusted to collect the critical demographic information required to properly bill claims.
This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.
Utilizing a medical billing company is not a panacea for such situations, but if you insure the following actions are built into your agreement with the billing service, you should be in good shape:
- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
- The medical billing service should assume full responsibility for timely filing issues and pay the practice the allowed amount for any claims they fail to submit prior to the timely filing deadline. This eliminates the risk a practice has when the billing is done by in-house billers who will never provide such a guarantee.
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
No - your staff will not work harder for you just because you employ them; and No - the biller who lost you $40,000 will not do any better job collecting money and gathering information from patients. You will probably need to "sternly" reprimand them again.
Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.
Copyright 2008 by Carl Mays II
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
This is a critical distinction that is easily missed because of the misplaced belief that if the billers work for the practice then they care more about its collections. I am not saying they do not care, but I am saying that when your biller has their economic incentives completely aligned with yours (as with a medical billing service) it makes a big difference in how they think about your medical billing and how well they perform their job.
In a conversation I had recently with a busy cardiologist I heard a story that is not unusual. One of the office's medical billers called in sick. Some information was needed while she was out so the office manager went looking through her desk. She did not find the information she needed, but she did find over $40,000 worth of claims that had not been billed and had gone beyond the timely filing deadline. That is right, $40,000 worth of claims that could not be billed and for which no money would ever be realized. Upon the billers return she was "sternly reprimanded for this egregious error. Not fired, but reprimanded for costing the practices tens of thousands of dollars. There is no alignment of incentives present in a situation like this.
Why wasn't more severe action taken? Because of concerns with upsetting the billing staff and exacerbating a staffing problem that existed. The biller was moved from follow-up to the front desk where she is now being trusted to collect the critical demographic information required to properly bill claims.
This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.
Utilizing a medical billing company is not a panacea for such situations, but if you insure the following actions are built into your agreement with the billing service, you should be in good shape:
- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
- The medical billing service should assume full responsibility for timely filing issues and pay the practice the allowed amount for any claims they fail to submit prior to the timely filing deadline. This eliminates the risk a practice has when the billing is done by in-house billers who will never provide such a guarantee.
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
No - your staff will not work harder for you just because you employ them; and No - the biller who lost you $40,000 will not do any better job collecting money and gathering information from patients. You will probably need to "sternly" reprimand them again.
Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.
Copyright 2008 by Carl Mays II
About the Author:
Carl Mays II, President and Chairman of ClaimCare Medical Billing Services, is an expert in the field of medical billing and medical practice management. Carl has been working in the medical field since 1995. Prior to that Carl worked as an aeronautical engineer for Boeing. Read more about medical billing companies at ClaimCare's medical billing blog.
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