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.
The average medical billing company's fee is a percentage of the practice's collections. As a result of this their compensation is directly proportional to to how much money they collect for your. In stark contrast to this are internal medical billing employees that are paid on an hourly basis. They are paid because they are at their desk, not because money is flowing into the practice's bank account.
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.
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
This reaction is surprisingly common. Typically practices have so much trouble recruiting, training and retaining billing staff they are reticent to let one go. In addition, the billing staff complains about how understaffed they are and how they cannot be held responsible for not being able to complete even basic medical billing tasks. In this office's case they moved the biller to the front desk and had her in charge of collecting patient demographics. A place where she can do even more harm through poor performance.
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:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from "falling through the cracks".
- Any claims that are denied for timely filing should be the responsibility of the billing company. In other words, they should make the practice whole if they fail to file your claims. This is not a demand you can make of in-house billers (it is not even legal to make it).
- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.
As physicians struggle with stagnant (at best) reimbursements and escalating costs, it is critical that they make the best possible decision in regards to their medical billing. Selecting a solution that structurally minimizes the risk of poor medical billing is critical.
Without properly aligning the incentives (both upside and downside consequences) of in-house medical billers, you can rest assured that history will likely repeat itself and the biller that lost $40,000 in charges is unlikely to excel at demographic collections.
A high performing medical billing company with complete transparency and full alignment of incentives is the surest path to medical billing excellence and strong financial performance for your practice.
Copyright 2008 by Carl Mays II - 15478
The average medical billing company's fee is a percentage of the practice's collections. As a result of this their compensation is directly proportional to to how much money they collect for your. In stark contrast to this are internal medical billing employees that are paid on an hourly basis. They are paid because they are at their desk, not because money is flowing into the practice's bank account.
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.
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
This reaction is surprisingly common. Typically practices have so much trouble recruiting, training and retaining billing staff they are reticent to let one go. In addition, the billing staff complains about how understaffed they are and how they cannot be held responsible for not being able to complete even basic medical billing tasks. In this office's case they moved the biller to the front desk and had her in charge of collecting patient demographics. A place where she can do even more harm through poor performance.
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:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from "falling through the cracks".
- Any claims that are denied for timely filing should be the responsibility of the billing company. In other words, they should make the practice whole if they fail to file your claims. This is not a demand you can make of in-house billers (it is not even legal to make it).
- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.
As physicians struggle with stagnant (at best) reimbursements and escalating costs, it is critical that they make the best possible decision in regards to their medical billing. Selecting a solution that structurally minimizes the risk of poor medical billing is critical.
Without properly aligning the incentives (both upside and downside consequences) of in-house medical billers, you can rest assured that history will likely repeat itself and the biller that lost $40,000 in charges is unlikely to excel at demographic collections.
A high performing medical billing company with complete transparency and full alignment of incentives is the surest path to medical billing excellence and strong financial performance for your practice.
Copyright 2008 by Carl Mays II - 15478
About the Author:
Carl Mays II, President and CEO of ClaimCare Medical Billing Services, is a medical billing and process design expert. Carl has been working with medical clients since 1995. Prior to that Carl worked as a mechanical engineer for Boeing. Read more about medical billing companies at ClaimCare's medical billing blog.
