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.
In a recent meeting with a multi-physician provider practice I was told a tale that I have heard many times before. One of the offices multiple medical billers was out for a few days. While she was out her supervisor was looking through the billers desk for some information that was needed. What she found was over $40,000 worth of old claims that the biller had stuck in her bottom drawer and never billed. As if this was not bad enough, almost all of the claims were beyond the timely filing deadlines and the money was lost forever. When the medical biller was back in the office she was reprimanded for this horrendous error. She was not terminated - she kept her job despite the fact the office lost thousands of dollars because of this horrific medical billing performance.
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.
There should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice's system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice's medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.
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.
- 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).
- 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.
We often hear from the physicians how hard and long they work for ever decreasing reimbursements. All this is true. However, too often we also see practices (through various reasons) hurt themselves financially - over and over again.
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.
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 - 16747
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.
In a recent meeting with a multi-physician provider practice I was told a tale that I have heard many times before. One of the offices multiple medical billers was out for a few days. While she was out her supervisor was looking through the billers desk for some information that was needed. What she found was over $40,000 worth of old claims that the biller had stuck in her bottom drawer and never billed. As if this was not bad enough, almost all of the claims were beyond the timely filing deadlines and the money was lost forever. When the medical biller was back in the office she was reprimanded for this horrendous error. She was not terminated - she kept her job despite the fact the office lost thousands of dollars because of this horrific medical billing performance.
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.
There should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice's system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice's medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.
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.
- 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).
- 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.
We often hear from the physicians how hard and long they work for ever decreasing reimbursements. All this is true. However, too often we also see practices (through various reasons) hurt themselves financially - over and over again.
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.
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 - 16747
About the Author:
Carl Mays II, Founder and CEO of ClaimCare Medical Billing Services, is a medical billing and process design expert. Carl has been working in the medical field for more than 12 years. Prior to that Carl worked as a mechanical engineer for Boeing. Read more about medical billing companies at the ClaimCare Blog.
