In medical practices, one of the most demanding and time-consuming tasks is medical billing. Many independent practitioners or physicians often have confusion about whether to keep the billing operations in-house or to outsource the billing procedures? The answer to this is not fixed and depends upon several factors including the size of the business and labor market, overall budget, number of staffs and many other factors.
What are the differences between outsourcing and in-house billing?
In case of an in-house billing, all the medical billing services are performed inside the vicinity of the healthcare center. No third party is involved. Medical practices require sound financial support to meet the rising expenditure of the medical billing procedure. There is a great deal of work involved, from hiring billers and coders to ensuring efficiency and making sure there are no backlogs in the work. This is also risky as hiring inefficient workers can delay the whole billing process which in return can slow down the revenue cycle.
Outsourcing is the opposite of in house billing in a sense that here the billing process is handed to a third-party billing service provider. The healthcare provider does not worry about dealing with hiring coders and ensuring efficiency anymore. The third-party medical billing providers get a certain percentage of the revenue generated. Although outsourcing can be helpful, it can be risky as well as you are dependent on the third party for the billing operations.
When should you outsource?
There are many reasons that an independent practitioner should consider while outsourcing medical billing operations. Here are a few questions that you can ask yourself to get clarity.
- Is your in-house billing operation not sufficient? Outsourcing sufficiently reduces the time for receiving payment; speeding up the billing procedure with in-house billing matching deadlines could be an issue since billing is not the only thing that needs your attention in a medical center.
- Do you have a high rate of employee turnover? Increase turnovers can be costly and it can also slow down the billing process. Outsourcing can be a good option here, as you don’t have to worry about the cost of hiring and firing and also any delay in the claims processing.
- Are you up to date with technological advancements? One of the biggest challenges with choosing in-house billing is that you need to stay up-to-date with the new software and need to hire tech-savvy people which can be costly especially for small independent practices. So to avoid costly technical issues outsourcing is the right option.
- Are you a new practice? It’s difficult, especially for new medical practices to handle the patients and the billing at the same time. Hence, outsourcing can be a great relief in this situation.
It is important to do a background check of the third party if you are considering the outsourcing option for your medical billing operations. Check their reviews and go through all the alternatives before settling for one as the accuracy may differ from operator to operator.
What are the pros and cons of outsourcing your Medical Billing?
Pros of Outsourcing
One of the advantages of outsourcing medical billing is that it is less expensive. Especially if you are a new, independent business you already have other expenses that you need to take care of hence outsourcing is a better option.
Outsourcing your medical billing gives you a chance to not worry about micromanaging everything. There is more transparency and authenticity because it’s the billing services provider’s job to provide you comprehensive reports on your performance. This also gives you more visibility into your work.
The third-party billing service provider is obliged, contractually, to provide you with services that can help enhance your company performance and hence maintaining consistency in the work. You don’t have to worry about hiring and firing of staff to stay consistent in your billing work as this is the service provider’s job to do so. This helps the company maintain consistency throughout the working year.
Cons of Outsourcing
Although outsourcing has many advantages, it comes with a cost. Here are some of the challenges that come with outsourcing your medical billing process.
It is true that you don’t have to worry about managing your billing; outsourcing takes away ownership of your work as it becomes someone else’s problem. You get to have a say about how to manage the billing work and this results in a loss of control over your work.
Another disadvantage of outsourcing your medical billing is the variable cost involved. If your work includes more hard work from time to time, it means you have to pay accordingly to the services provided. This can offset your whole budget as the cost differs from month to month depending upon the workload.
Another thing that could be a challenge is the hidden fees. It is very important that you read out the contract very carefully before hiring a service provider. There might be startup charges, printing fee and many more which can add to the variable cost and offset your company’s budget. Now that you have an idea about outsourcing your medical billing and the benefits and challenges attached to it you can make a better decision. Remember! Outsourcing has many advantages however, it is important to choose what would be best for your company.