Do Not Assume Internal Medical Billing is Your Best Option
By onslaught82
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.
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
This issue, however, is often not fully understood or appreciated by many providers. These providers frequently say: "the staff works directly for me in my office-- they are more loyal and will do a better job and I can see what they are doing". Experience has shown, however, that this is often not true.
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.
When I asked the doctor why a more severe action was not taken, he explained to me that "we already have staffing problems and did not want to alienate the billing staff any further." The guilty biller was apparently moved to the front-desk role and is now responsible for gathering demographic information and money.
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.
If you select the correct billing company you can avoid nightmare situations like this. Here are some of the key elements you should seek when looking for a medical billing company:
- 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.
- Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company's control. What this means is that you never suffer financially if the billing company drops the ball. Try to have your billers reimburse you if they drop the ball.
- 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.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
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 - 18098
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
This issue, however, is often not fully understood or appreciated by many providers. These providers frequently say: "the staff works directly for me in my office-- they are more loyal and will do a better job and I can see what they are doing". Experience has shown, however, that this is often not true.
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.
When I asked the doctor why a more severe action was not taken, he explained to me that "we already have staffing problems and did not want to alienate the billing staff any further." The guilty biller was apparently moved to the front-desk role and is now responsible for gathering demographic information and money.
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.
If you select the correct billing company you can avoid nightmare situations like this. Here are some of the key elements you should seek when looking for a medical billing company:
- 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.
- Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company's control. What this means is that you never suffer financially if the billing company drops the ball. Try to have your billers reimburse you if they drop the ball.
- 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.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
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 - 18098
About the Author:
Carl Mays II, President and Chairman of ClaimCare Medical Billing Services, is an expert in the field of medical billing and medical practice management. 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 the ClaimCare Blog.
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