Your employees are crucial to your practice's success. They handle many vital tasks that keep operations running. However, they may lack the manpower, time, skill, or knowledge to properly manage the most crucial aspect of the practice: revenue cycle management (RCM), also known as medical billing. In these cases, outsourcing medical billing may be an excellent situation for your practice.
Relinquishing medical billing to a third party can seem daunting, especially if you are concerned about having to fire staff. Consider the advantages and disadvantages of outsourced medical billing to see why outsourcing medical billing may be beneficial to your practice.
The Advantage of Outsourcing Medical Billing
Outsourced medical billing provides numerous benefits to healthcare practices, such as:
Improvement in RCM Quality
Outsourcing medical billing can dramatically improve the quality of a practice's revenue cycle management.
Outsourcing provides access to highly specialized RCM staff with extensive experience in the industry. They are qualified to ensure procedures and best practices are in place for the revenue cycle. This translates to fewer denials and write-offs and lower average days in A/R rate.
In addition, third-party medical billing experts have access to the most up-to-date technology and information to ensure that every claim is processed according to industry standards. They can also assist with coding and documentation compliance, which helps to improve billing accuracy. A reduction in errors increases your first pass clean claims rate (the number of claims reimbursed on the first submission), allowing you to receive payment on time.
Timeliness
Medical billing experts can quickly and accurately process claims, which greatly reduces your number of rejected claims, denied payments from insurers, and write-offs. This allows you to collect your payments more quickly, reducing your accounts receivable (A/R) and improving your cash flow.
Reduced Staffing Issues
A lack of talented, qualified, and long-term staff is a problem that has plagued the healthcare industry since the beginning of the pandemic and the ongoing Great Resignation. Outsourced medical billing can reduce staffing issues. You gain access to a team of qualified experts dedicated to managing your medical billing.
Partnering with a third-party medical billing team does not necessarily mean you have to fire your existing staff. In some scenarios, it may be more beneficial to keep your staff.
For example, suppose you are an established practice struggling to meet important metrics. Instead of being forced to fire staff or invest in recruiting and training completely new employees, you can let the experts handle your RCM and repurpose your existing team to help with other important areas in your practice.
Cost-Effective
Outsourcing medical billing services often helps you to reduce costs and maximize profit. Generally, it is cheaper to outsource than to hire a full-time staff and pay all the related costs, such as benefits, taxes, expensive RCM software, and more.
Furthermore, you may not need to use the entire medical billing team available to you. On average, one medical billing expert can work for three to four clinicians.
With the right billing company, you can also turn one or more of your billing staff into management experts and reduce the number of third-party medical billers you need.
The Disadvantages of Outsourcing Medical Billing
Outsourcing medical billing offers many enticing benefits, but it also has its own set of disadvantages to consider.
Communication
One disadvantage of third-party medical billing services is communication. Most experts work remotely, so you cannot physically go into an office and talk with your medical billing expert as you do with in-house staff. This can cause delays in communication.
To combat this, you should find a partner that has an office stateside. Even if they do not, make sure you can build an established relationship and get on the phone with someone quickly.
Giving Up Control
Inevitably, you will lose a measure of visibility and control over the billing process when you outsource RCM to a third party.
However, many billing companies provide access to detailed reporting so you can stay informed. Before partnering with a company, ask them about their reporting cycle and processes to ensure you maintain a comfortable level of oversight.
Possibility of Imbalanced Risk
Lastly, third-party billing companies may not fight for your money as much as your in-house team will, which results in increased financial risk for you.
However, many medical billing companies now utilize a shared risk structure where pricing is a percentage of the revenue. This means they only make money if you do, which balances assumed risks and ensures a proper return on investment (ROI).
Integrating Outsourced Medical Billing Into Your Practice
Outsourcing medical billing is an excellent way to reduce costs and staffing issues and increase RCM quality and timeliness. It does have its disadvantages, such as communication and lack of control. However, you can combat these issues strategically to ensure they remain an asset to your practice.
Are you seeking a medical billing company that manages the entire RCM process while providing detailed reports and a shared risk structure? If so, PUREDI is an excellent solution for you. Our comprehensive medical billing services are tailored to meet the needs of your company. Contact us today to see how our medical billing solutions can optimize your revenue management and help improve your bottom line.
