The decision to outsource the billing process in a medical practice is one of several management strategies that can be used to minimize the overall workload of the practice manager, while increasing the expertise and professionalism in the billing process.  With all the activities that a practice must perform to provide exceptional clinical care, the billing cycle can become an overwhelming and unpredictable function at times.  It is often said that the biggest headache in practice management today is the billing and collections.  By hiring a billing service organization, a practice should reduce their workload and improve their primary goal of providing the highest quality patient care.

One of the most important areas of a medical group practice is the billing and collections function.  Billing is labor intensive, technology intensive, ridiculously complex and requires constant vigilance by the practice manager.  Unfortunately, in some cases, this area does not receive the special attention or high priority focus in the ongoing daily operations of the practice.  In fact, the majority of practice managers routinely struggle with their duties and responsibilities because of daily time constraints and project management.

Many practice managers have limited time and energy to focus on crucial elements of the practice specifically the overall billing cycle process.  Outsourcing can allow the practice manager to focus more on results and less on the process.

Outsourcing may positively impact the performance of a private practice in five different ways.  First, selection of a competent practice management solutions organization can provide a practice with access to billing and coding expertise, rather than incurring the cost of recruiting, hiring and training these employees.  This can be a major benefit, especially to small to  medium sized practices that do not have the resources to gain access to competent and qualified billing employees.  In addition, these skilled and highly trained employees are not employees of the group practice.  Thus, an immediate reduction in FTE expenses and employee liability can be achieved.

The second benefit for utilizing outsourcing is that it allows the practice manager’s workload to be significantly reduced and minimized.  Thus, there will be increased time for other unrelated activities within the practice.  This additional time can be valuable to the manager as they seek to identify new potential revenue sources.  Also, since this process will remove the primary responsibility of sending claims to payers, the staff can be reassigned job duties and responsibilities and will be better able to focus on accomplishing other assigned tasks and projects.

The third benefit allows the coding and compliance, to include HIPAA, to improve based on the coding and billing expertise of the new medical billing service.  A majority of billing services employ Certified Professional Coders (CPCs) – MedCorp has 2 CPCs – to accurately and completely analyze code for diagnosis and/or procedures.

The fourth benefit would allow for other value-added services to be included in the billing service agreement.  These value-added services would include, but not be limited to, fee schedule and reimbursement analysis (included), assistance with managed care contract review (included), financial analysis and review of special and end of month reports and timely and accurate end of month reporting. (included)

Finally, outsourcing allows the practice to focus on its primary mission to provide quality care and exceptional customer service to their patients.  By outsourcing their billing process, additional resources will be available to focus on the specific needs of the patient.

The primary reason for outsourcing is that it offers access to expertise that would otherwise be very expensive to maintain on the payroll.  The secondary reason is the additional time the organization can free up to spend on other activities.  This enables the organization to strengthen its ability to provide their product or service while still accomplishing peripheral tasks.

The posting of the demographic and insurance information into the practice management system will still be the responsibility of the practice.  The proper filling out of the encounter form (charge ticket, route slip, super bill) will be the responsibility of the practice as well.  The remainder of the billing process will be the responsibility of MedCorp.

• Posting of charges, payments and adjustments

• Electronic submission of all insurance claims (direct to BCBS and Medicare)

• Generation and mailing of any paper claims (all primary claims are sent electronically and the ones which are required to go by paper are mailed by the clearing house)

• Generation and mailing of patient statements (electronically)

• Follow up on insurance denials and slow payments

• Generation of standard monthly reports

• Assistance with third party payer audits and compliance issues

• Credentialing and enrollment (there is an extra charge for this)

• Chart Auditing (there is a extra charge for this)

• Coding review

• Sales and services MediSoft Practice Management Software

• Sales and services MediSoft Clinical Electronic Health Records

Another potential benefit for outsourcing a practice’s billing activity is that the remaining workload becomes more focused.  Thus, employees can be more conscientious and diligent in the performance of their daily work activities.  Since the practice’s primary focus is providing direct patient care services, this allows employees to streamline their actions to be more in line with their purpose.  There are several key reasons practice managers choose to outsource their billing, including accessing expertise in the coding field that are more adept and up-to-date with all the requirements of the industry and updated information relating to both governmental regulations and non-governmental policies.  Ideally, these medical billing companies would have all the technology, equipment and supplies for performing the necessary tasks, allowing the practice to minimize any capital outlay, thereby increasing the available resources for use elsewhere in the organization.

A cost analysis is critical in evaluating external medical billing companies.  This analysis should include all direct and incremental costs.  Hiring and training new staff, employee benefits, vacation/sick leave, and staff turnover are just a few factors increasing the costs of managing an efficient in-house billing program.  Other cost include software/hardware maintenance, clearinghouse fees, postage and other miscellaneous practice expenses.  The exceptional medical billing company will design their services around covering all of these costs and immediately do away with the problems they create.

Once a practice selects a billing service and initiates the process, they should immediately create and develop open lines of communication from their practice to those within the billing service organization.  This process will allow both organizations to maintain information exchanges that will improve the early stages of this implementation process and increase the rate of positive, productive and ongoing communications.

Some of the potential benefits physician practices should expect and observe by using a medical billing service will include: access to long term expert support without hiring the employees, reduction in direct employee expenses to include salary and benefits and the ability to free up time and money to be used for other projects.