The pressures within healthcare in the area of revenue cycle continue to increase, with increasingly complex reimbursement requirements, new technology, and financial limitations all playing a role. These difficulties create vulnerability for practices within their medical billing—RevCycleIntelligence identified it as one of the top areas. So when considering whether medical billing outsourcing is the right move for your practice, you should carefully weigh the pros and cons of insourcing vs. outsourcing, as well as what to look for if you decide to work with an outsourcing partner.
Insource vs. Outsource
The ability to create and maintain a clean, well-managed billing process takes expertise and excellent organization, and it can be difficult to find and retain staff with such skills. Despite those difficulties, some practice owners enjoy the ability to monitor day-to-day billing operations in person, and feel that they can better address questions in real time. However, as noted in Physicians Practice, there are inherent overhead costs in an in-house setup, including:
- Employee wages and benefits
- Equipment and office supplies
- Registration with a clearinghouse
- Additional space for records storage
- Training costs and reference materials
Outsourcing provides several benefits. According to HIT Consultant, medical billing outsourcing can increase overall cash flow, save on the cost of equipment and software, and reduce staff size and employee expenses, as well as strengthen business continuity and expertise.
Self Analysis
In addition to weighing the benefits of insourcing vs. outsourcing, it is important for practice owners to assess the current status of their billing operations before making a decision. Track your age trial balance, days in accounts receivable, and total accounts receivable over the past three years and comparing those metrics to national benchmarks. If your current solution is underperforming, it may be time to make a change.
In addition to assessing current performance, it’s also wise to complete a cost analysis of in-house vs. outsourced services. Physicians News Digest presents a hypothetical cost breakdown of insourcing vs. outsourcing. The expense associated with each, along with the potential for more robust collections via outsourcing, should be considered.
What to Look for in a Medical Billing Outsourcing Partner
There are three segments of medical billing—front-end, middle, and back-end—and practices can outsource part or all of these segments. A recent report by Grand View Research noted that outsourcing will soon be the norm for the majority of medical billing operations, with front-end functions constituting the majority of those functions, and notable growth expected for middle-end services.
As the shift towards medical billing outsourcing continues, there are five key characteristics you should look for when considering a prospective billing company, including:
- Use of a domestic labor force. Offshore labor introduces numerous unnecessary challenges, including language barriers, time zone hassles, poor training standards, lack of understanding of U.S.-based medical billing practices, posting errors, etc. RCM vendors never choose to offshore their labor to improve quality; they do so to increase their profit margins at the expense of quality service.
- A performance guarantee. The vendor should be committed to keeping rejected, denied and appealed claims to a minimum.
- A monthly KPI report. KPI reporting is essential, but many RCM vendors don’t provide monthly reports or train customers in how to evaluate them. Transparency in reporting is a key strength of a reputable medical billing company.
- Continuous process improvement. The vendor should provide ongoing KPI analysis and action plans to ensure the sustained financial health of the practice.
- Experience in your specialty. Ask your candidate vendor how many other customers they have in your specialty. If they are arranged in teams, ask if your practice will be placed in a team that is currently billing for other providers in your specialty.
BlueFish Medical can help your practice capture more revenue, more efficiently.
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