Outsourcing medical billing may sound expensive, but the benefits can outweigh the costs. Let’s explore the real ROI on outsourcing medical billing – Coronis Health can provide tips to help you determine whether outsourcing is the right choice for your facility.
5 Signs You Should Outsource Your Medical Billing
Medical billing is a critical component of your facility’s revenue cycle, as it ensures that you are earning the reimbursement from the submitted claims of the services you provide. If you are struggling with your accounts receivable, staffing, and an overall lower collection rate, you may need to consider outsourcing your medical billing. There are five significant signs that indicate a need to make the transition to outsourced medical billing.
Long Accounts Receivable
Accounts receivable (A/R) is money owed to your facility from an insurance payer; the key is to keep days in A/R less than 30 (ideally). The longer owed money sits in A/R, the longer your facility goes without receiving reimbursements. If your facility’s A/R is 45 days or more, this should be a reason to analyze the core reasons you are not collecting reimbursements or patient payments in a timely manner.
Part of your revenue cycle is tied to your collection processes, and without a solid foundation of collecting on outstanding payments from insurance payers and patients, you will see a decline in your facility’s revenue. Coronis Health focuses on providing streamlined billing services for your facility to ensure that you experience an increase in revenue, rather than a decline in the lifeblood of your facility’s operations.
Higher Operational Expenses
In-house medical billing is not just about reimbursement for services rendered – operational expenses are a critical component related to the cost of medical billing, which many facilities do not consider in the bigger picture of operations. The following factors contribute to a higher operational expense for a facility that uses in-house medical billing:
- Finding and hiring highly trained and certified billers and coders
- Paying hourly wages, which includes the employer share of taxes and employee benefits
- Licensing for software (depending on number of employees, you may be charged per license)
- Clearinghouse fees
- Statement fees and postage, including the cost of printing
- Based on how many medical billers and/or coders you employ, a smaller billing department could be less productive and unable to handle the load of increased rejections and denials
- Decrease in collections and cash flow
- Increase in patient debt
These factors correlate with your facility’s ability to maintain a reasonable rate of operational expenses. When the costs of the above are factored into the cost savings of outsourcing your medical billing, you will discover that the increase in your net collections (your revenue) will surpass not only your previous operational expenses, but the fee you end up paying for your outsourcing. You end up making more in the long run.
Lower Net Collection Rate
The net collection rate is the amount of money your facility collects on claims after excluding the adjustments applied by contractual agreements, however, denied claims factor into your net collection rate. An inexperienced medical biller, or a billing department with insufficient staff may write off denied claims instead of engaging in proper follow-up or resubmission of the claim. The rate at which this happens could decimate your facility’s revenue health.
High Staff Turnover
Employee turnover relates to multiple factors, from job satisfaction to pay, but in medical billing, an organization may have a difficult time trying to find and keep certified medical billers and coders. This leaves billing departments short-staffed and pressured to keep up with mounting A/R and denial rates, correcting errors, and resubmitting claims.
The average length of employment for a medical biller is anywhere from 1 to 3 years, which means a higher rate of turnover for an organization. The cost of hiring and training has to be factored into the cost of operations, so a high rate of staff turnover is something to consider when determining if you will outsource your medical billing.
Benefits of Outsourcing
One of the key benefits of outsourcing medical billing for your facility is the centralization and standardization of billing practices. Additionally, you will see a lower cost of operations, a decrease in billing mistakes, improved compliance, and above all else, happy patients.
Operational costs come with the territory of running a medical facility, but you want to keep them under control to ensure a healthy revenue stream. On average, most healthcare facilities can spend anywhere from 30 to 40 percent of their revenue on medical billing, but outsourcing this process significantly reduces operational costs. The money spent to train, recertify, and keep medical billers up to date on the latest regulations is an additional cost, and is eliminated when the billing process is outsourced.
Billing errors can create a potentially large hit on your revenue. Errors include inefficient collection policies, incorrect coding, errors with patient registration and insurance verification, and lack of documentation with a claim. One mistake can result in a denied claim or delayed payment, and will ultimately result in continued mistakes with costly results.
Medical billers specialize in many fields, from primary care to surgery, so it’s important to outsource with the right company that understands the intricacies of your facility. This ensures that you see fewer mistakes with billing, which means your net collections increase, your denials decrease, and your operational costs are more than manageable.
Healthcare is a dynamic industry – regulations change to accommodate fluctuations with government requirements, insurance payers, and changes with technology and science. The Centers for Medicare and Medicaid (CMS) also implement strict guidelines for billing, so it’s important for a medical biller to be up to speed on changes that can affect the billing process for a facility.
Certified medical billers and coders must learn and understand the regulations that govern how insurance payers reimburse, and how facilities must document to receive reimbursement. They are trained on how to apply coding that correlates correctly with clinical documentation, and are consistently updated on any changes that apply to coding or billing procedures. Outsourcing your medical billing ensures that you are working with a team that focuses 100% of their time on billing. You will see an improvement in compliance with billing regulations as your outsourced billing is following the guidelines set forth by the government and CMS.
Patient experience is an integral part of success in healthcare, as it signifies the quality, reputation and culture of the organization and its people. When patients are happy, there are multiple facets to that level of happiness, and it includes their perception of the billing process. A facility understands revenue cycle and everything it entails, but patients look at only what they can see – registration, insurance, what they have to pay up front, what they are billed, and their interactions with a billing department. When you keep your billing processes in-house, your support staff, which also includes your billers and coders, have responsibilities that extend to scheduling appointments, managing calls from patients, and other tasks that remove the focus from the purpose of their job – billing and coding.
By outsourcing your facility’s medical billing, you are freeing up your staff to focus on creating the best experience for your patients. One of the most difficult aspects of keeping billing in-house is fielding the many phone calls related to patient bills, which sometimes involves more than just the billing department to resolve. Outsourcing medical billing gives your staff the ability to engage with patients without the stress of having to discuss a bill. With a better patient experience, you will see higher patient retention and satisfaction.
Outsourcing your billing services may seem like an expense your facility can’t afford, but in truth, it may be an investment your facility can’t live without. By outsourcing, you may find your revenue increases, your operations become more efficient, and your patients enjoy a higher level of care.
Are you ready to take a closer look at outsourcing your medical billing? Let’s start a conversation.