The need for medical billing services has increased due to constant changes and new requirements for healthcare reimbursement. Insurance companies have exacting requirements, and providing proper codes to insurance companies and processors can be very difficult. Changes in reimbursement and regulation add to the burden of the medical practice. To allow medical staff to focus on patient care, outsourcing the financial and billing side of the business to professionals would be very beneficial.
What are Medical Billing Services?
Medical billing services are outsourcing the financial side of the patient service business to a billing company. The billing company becomes an extension of the practice. The billing company verifies insurance and can assist with patient registration. The billing company can assist with charge description code entry and medical coding and can submit claims. The billing company can follow-up on claims and perform scrubs on claims. The billing company can perform management of denied claims, accounts receivable, and patient billing. The billing company can follow-up on claims and perform accounts receivable management. The company performs a number of functions to help the practice manage the revenue cycle and receive proper reimbursement.
Why Use a Billing Company?
There is a high level of complexity with medical billing. The regulations for healthcare are constantly changing, and even small mistakes can result in denied or rejected claims.
Working with an experienced billing team can help alleviate the burden on internal staff.
A medical billing company may help a practice:
Reduce Billing Errors
Rather than relying on internal staff to find and correct billing errors, a medical billing company employs professionals with the experience to find and reduce common billing errors.
Improve Claims Processing
A medical billing company staff can assist with claims processing throughout the revenue cycle.
Manage Denied Claims
A professional billing team can assist with addressing denied claims to help determine the reason for the denial and take steps to resolve the problem.
Reduce Administrative Work
Physicians and office staff have many duties. Outsourcing medical billing may help alleviate the burden staff feel when dealing with insurance companies and unpaid claims.
Improve Accounts Receivable
The time that unresolved claims go without payment can create problems for cash flow.
What Does a Medical Billing Company Do?
A medical billing company can assist in the revenue cycle in a number of ways.
1. Insurance Eligibility Verification
Prior to the submission of a claim, a medical billing company can help verify insurance coverage.
2. Medical Coding
Medical coders interpret notes written by health care providers about a patient’s diagnosis and plan of care, and code them to the appropriate code set.
Some code sets include:
ICD-10-CM
CPT
HCPCS
Medical coders are essential to the health care revenue cycle by coding the documentation to enable insurance companies to process claims.
3. Charge Entry
The billing team captures the services provided by the health care provider and prepares the information to be submitted on a claim.
4. Claim Submission
The billing team transmits the claim to the insurance company or clearinghouse electronically.
A medical billing company reviews the claims for common errors prior to submission in order to improve clean claim rates.
5. Payment Posting
Upon receiving payment, the billing team posts to the practice’s billing system, insurance payments, adjustments, and patient payments.
Maintaining accurate payment posting helps the practice maintain reliable financial records.
6. Denial Management
Upon receiving notification that a claim has been denied, the billing team researches the reason for the denial.
Depending on the situation, the team might edit the claim, attach additional information to the claim, resubmit the claim, or prepare an appeal.
7. Accounts Receivable Follow-up
Medical billing companies follow up on claims that have not been paid.
Regular follow up keeps claims moving and decreases the time claims remain in accounts receivable.
8. Patient Billing
Medical billing companies collect patient statements and patient balances.
Medical Billing Services for Different Healthcare Practices
This includes:
- Primary care practices
- Family medicine practices
- Internal medicine practices
- Urgent care centers
- Dermatology practices
- Cardiology practices
- Orthopedic practices
- Pediatrics practices
- Behavioral health practices
- Mental health providers
- Specialty clinics
- Multi-provider medical practices
Healthcare providers should look for a billing company with experience relevant to their practice, as the billing requirements can vary significantly between specialties.
Medical Billing Services vs. In-House Billing
Healthcare providers have to choose between maintaining an internal billing department and outsourcing their billing.
In-House Medical Billing
When a practice creates an in-house billing department, they gain control over their billing employees and the processes.
However, a practice is also responsible for:
- Employees’ wages and benefits
- Training
- Billing software
- Staff turnover
- Continuing education
- Management
- Productivity
This can become time-consuming and expensive for some practices.
Outsourced Medical Billing
With outsourced medical billing, practices agree on certain billing responsibilities and duties with the outsourcing company.
This can result in reduced administrative duties for the practice.
They may also benefit from:
- Scalable services
- Billing specialization
- Revenue cycle management
- Denial management
The best option for a practice depends on their specialty, staffing, technology, size, and goals.
How Much Do Medical Billing Services Cost?
The costs of medical billing services varies with each practice.
Some reasons a service may cost more or less include:
- Number of service providers
- Number of claims submitted per month
- Specialty
- Billing complexities
- What services will be billed
- Coding requirements
- Patient volume
- Payer mix
- RCM services
Pricing models vary. Some billing companies charge a percentage of collections, others use flat fees or customized pricing.
Choosing a billing company based on price can be a detrimental mistake. Choosing a company based on service value can protect against financial hardships.
How to Choose the Best Medical Billing Company
Billing directly affects the financial health of a medical practice, so choosing the right billing partner is important.
Some things to consider include:
Practice Experience
It is helpful to partner with a company that understands the challenges of your specialty, payers, and coding.
Coding Expertise
Find out if they employ medical coders and billing specialists. This can reduce claim problems and help maximize payments.
Denial Management
Ask what the billing partner does when claims are denied. A true partner should help identify the reason for claim denial.
Technology
Bill collections and related activities can be better managed with software. Ask what technology the company uses.
Compliance and Security
PHI is transmitted in billing activities. A billing partner should assist in protecting PHI and adhering to HIPAA requirements.
Transparent Reporting
A good billing company is one that provides valuable data to the practice owner/manager, in the form of reports.
Examples of data points may include:
- Days in accounts receivable
- Collection rate
- Claim denial rate
- Clean claim rate
- Outstanding A/R
- Payer performance
Communication
Communication is often overlooked when selecting a medical billing company.
It is important that your billing company has a team that is available and responsive to work with you when there are problems with your practice’s billing.
Common Medical Billing Problems
Medical billing problems are a common challenge that nearly all medical practices face.
There are many different types of billing problems, and some of the most common are:
- Patient info entered incorrectly
- Patient coverage is inactive
- Documents are missing
- Correct codes are not used
- Claims are rejected
- Claims are denied
- Claims are not submitted in a timely manner
- Insurance claims are not paid
- High A/R
There are many other issues with billing that a practice faces, but it is important that a billing team identifies and addresses recurring billing issues.
For example, if a practice continues to receive repeated denials from a payer for the same reason, the billing team should address the reason and find ways to improve the process.
Medical Billing and Revenue Cycle Management
The process of medical billing is part of a larger process of managing the practice’s revenue cycle. The entire revenue cycle of the practice begins when a patient is first scheduled and continues all the way through the time the practice receives final payment.
Some of the process of the revenue cycle may include:
- Patient scheduling
- Patient registration
- Insurance verification
- Prior authorization
- Charge capture
- Medical coding
- Claims submission
- Payment posting
- Follow up on denied claims
- A/R collections
- Financial reporting
A practice may contract with a company that does select services of the revenue cycle or a company that manages the entire revenue cycle of the practice.
How Technology Improves Medical Billing
There are several ways in which technology changes the way healthcare providers manage their billing. For example, various software applications help automate billing processes such as checking insurance eligibility and submitting claims.
The use of technology within a medical billing office is not meant to replace experienced staff; human judgment is still essential, particularly when dealing with payer-specific requirements and documentation.
Potential billing errors and claim denials are increasingly being identified through the use of artificial intelligence and automation.
Trends have shown that an increase in the use of technology in the field of medical billing has resulted in a reduced reliance on experienced staff.
Questions to Ask Before Engaging a Billing Partner
Prior to engaging a billing partner, a healthcare provider should consider the following:
Does the company have experience with my specialty?
Knowing if a billing company specializes in the healthcare service being provided is important when determining if a company is appropriate for your needs.
What services are included?
Make sure you know what areas of the revenue cycle the billing company will manage.
How are denied claims handled?
Ask if the company has processes in place to track and act on the reasons claims are denied.
What reports will I receive?
Understand the types of reports you will receive, how often you will receive them, and the metrics the reports will measure.
How is patient information protected?
Ask about processes the company has in place to protect patient information.
How will we communicate?
Ensure you understand how the company handles communication with clients and billing-related issues.
Benefits of Outsourcing Medical Billing Services
Some benefits of outsourcing medical billing services to a third party are:
Less time spent on billing-related tasks, and, as a result, more time spent on direct patient care, for both the healthcare providers and their staff.
Benefits of Billing Support
Practices are able to outsource their billing processes without having to develop and manage a large internal billing department.
Better Revenue Cycle Understanding
Practice owners can better understand areas in their practice where they are losing or holding on to their money with regular reports.
Flexible Support
Billing services can be outsourced and increase as the practice adds providers and/or increases the number of patients seen.
Less Administrative Burden
Billing, claims, denials and accounts receivable processes require an ongoing effort to manage. Outsourcing these processes can alleviate workload from practice employees.
Additional Thoughts
Medical billing is integral to running a successful practice and collecting the revenue the practice is entitled to. Unprocessed medical bills, denied claims and claims that are processed in an unprecedented manner negatively impact a practice’s revenue.
An experienced medical billing company can help healthcare providers with these important, but sometimes daunting, tasks.
Basic medical billing, medical coding and/or denials management, and/or revenue cycle management are just a few of the services a billing company can provide.
The company should have a clear line of communication, a thorough understanding of your specialty, and protect the confidentiality of patient information.
They should also provide easy to understand reports.
It is important that claims and billing processes are streamlined, organized, and compliant to help practice collect the revenue they are entitled to.
If your practice is spending a significant amount of time on billing processes and/or insurance claim processes, professional billing services may be a good option for your practice.