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Advantages of Outsourcing Medical Billing Services

September 18, 2014

BENEFITS OF MEDICAL BILLING OUTSOURCINGThe medical industry has been undergoing significant and rapid changes over the past several years. With the passage of and increasing implementation of the Affordable Care Act (also known as “Obamacare”, or the ACA), the business of medicine is developing at a pace not seen since the federal government involved itself in the medical industry over a generation ago.

While the benefits and problems of the ACA are still hotly debated, the fact of the matter is that the law has brought with it a significant increase in the amount of paperwork and regulations that medical offices must contend with on a daily basis. At the same time (and partially as a result), the expenses associated with running a medical office have increased, while margins has subsequently decreased.

For example, according to a recent study, the profit margins among not-for-profit hospitals has fallen to just 2.2%, which is due to the fact that their overall expenses have increased by 4.6 percent. This increase in expenses and decrease in overall profit margins is repeated in many segments of the overall medical industry, and the majority of experts expect it remain the same (or get worse) over the next several years.

How changes in the medical industry are negatively impacting medical offices

While many consumers of medicine are complaining about increasing costs, it often seems as though it is the practitioners themselves who are being squeezed on both sides. Not only are expenses going up, but insurance companies have new tools and methods to decrease payouts to practitioners. At the same time, the increase in administrative work for front office staff is increasing staffing costs for the front office.

Medical coding and billing has become more complex and accident-prone as well. While it is true that medical billing and proper coding has long been a sore subject for medical administrative staff, the new regulations from the passage of the ACA have made it so that same administrative staff must learn a largely new coding and billing process, which many consider to be more complex and difficult than before.

All of this leads to lost revenue, partially from increased administrative costs, and partially due to incorrectly coded records. In fact, according to a study by the Department of Health and Human Services, it is estimated that more than 42% of Medical records are incorrectly coded. This equates to billions in misappropriated revenue.

Reaction to changes in the medical industry

The dust certainly has yet to settle in the medical industry, and it will be years before the long-term direction of the industry is truly known. However, in the meantime, local hospitals, doctor’s offices, and medical facilities throughout the United States are adapting to the changes as effectively as possible.

One of the more effective changes within the industry is the increased outsourcing of medical billing and coding to companies that specialize in performing those specific tasks. The reasons for this are numerous, however the two primary reasons are that it reduces liability and increases margins.

For a long time, the medical industry seemed to resist the idea of outsourcing medical coding and billing to other companies. Part of the reason for this was the fact that many believed the cost of doing so was prohibitive for their business. Medicine has never been a particularly high-margin industry, and many medical facilities believed that they simply could not afford the lost margins that would come from hiring such a service. One of the other reasons was a desire to retain control of the administrative workings of the office. By ceding control of the medical billing and coding process to a third-party, some hospitals and doctor’s offices believed they would lose control over the patient’s overall experience, and would have to deal with an additional bureaucracy.

However, the implementation of the ACA has compelled medical facilities to reconsider outsourcing, and many of them have found it to be a worthwhile endeavor. Contrary to earlier beliefs within the medical industry, outsourcing medical billing and coding turns out to be a positive experience overall. As a result, the Bureau of Labor Statistics projects that the outsourced medical billing industry will grow by more than 20% over the next decade. As more and more medical facilities reap the benefits of outsourcing, that projected number could increase even further.

Improve Your M-Scribe Medical Billing Process.

Advantages of outsourcing medical billing services

Outsourcing medical billing to experts significantly reduces overall provider liability since certified billers and coders keep themselves abreast with changing laws and regulations. Instead of being solely responsible for miscoded records – corresponding procedure and diagnosis codes (CPT and ICD-9), practices can share that responsibility with the billing company who has coding expertise on board. Providers can discuss all the changes with certified coders to educate themselves as well as help billers to prepare cleaner claims. If nothing else, this offers peace of mind for administrative staff and medical professionals, so they can focus on their jobs instead of being distracted by medical billing and coding ever changing requirements.

Most significantly, however, is the fact that properly billed and coded records will mean prompt and maximized payments from insurance companies. Please contact me to discuss more about how we can improve your medical billing process at or call me at 770-666-0470


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