The advantages and disadvantages of outsourcing Medical Billing and Coding
The benefits and drawbacks of outsourcing medical billing and coding will be discussed here. Why should you read it, though? Here’s why!
Patient care and revenue management are the two key pillars of every practice’s success. Since the main purpose of any medical facility is to deliver healthcare, providers view this as the simpler of the two tasks. On the other hand, a lot of work goes into handling the financial side of your practice, particularly medical billing. Cash flow and financial health, which are essential to any facility’s smooth operation, are directly impacted by medical billing.
Regarding internal medical billing. You have two options: Teach your current administrative team or employ qualified medical billing specialists. Since you will need to lease the space and purchase the required equipment to accommodate the additional hires, the first increase your overhead costs. The latter could result in a higher turnover rate by making your employees feel overworked, worn out, and dissatisfied with their jobs.
The THIRD SOLUTION IS HERE! Assigning a third-party provider to handle your medical billing and coding. Because it relieves them of the burden of medical billing and coding, the majority of healthcare practitioners view it as a feasible alternative. While doctors concentrate on patient care, certified coders and professional billing professionals oversee the design, filing, rejection handling, and A/R follow-ups of claims.
Deciding without fully understanding the nuances, however, could endanger the reputation and financial stability of your firm. Therefore, before making a decision, consider your practice and what is best for it. This guide will provide a list of the benefits and drawbacks of outsourcing medical billing and coding to assist you.
Now let’s get started without any more delay!
Medical Billing and Coding: What Is It?
In simple terms, medical billing and coding convert a patient’s visit into claims that are processed using CPT and ICD coding standards that the insurance payer is familiar with to obtain payment for the care services that were provided.
A lot of individuals use the terms billing and coding interchangeably. They are distinct processes, though. For healthcare professionals to be paid, both coding and billing are essential.
Extracting billable information from clinical documentation and medical records is known as medical coding. Medical billing is the process of creating insurance claims and patient bills using coding information. The foundation of the healthcare revenue cycle is the claim creation stage, which intersects both.
Benefits of Hiring Outside Help for Medical Billing and Coding
Medical billing and coding outsourcing seems foreign to many healthcare practices. However, private practices and healthcare facilities actually use it extensively.
The global medical billing outsourcing market was estimated by Grand View Research to be worth US $12.2 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 12.26% from 2023 to 2030.
Hiring a third-party organization to handle medical billing and coding has several advantages. Below is a discussion of a few of these:
Changing Accountability
These days, healthcare CFOs worry about continuing to adhere to the ICD coding standards. They have good reason to be worried! Human error while coding may occur, which could lead to severe fines, longer reimbursement processing times, and more claim rejections.
The first benefit of outsourcing medical billing and coding is that it transfers accountability for adhering to evolving coding standards to the outsourced provider. Consequently, the Recovery Audit Program’s (RAC Audits’) risk is reduced.
Additionally, you don’t have to worry about developing testing procedures and tactics to guarantee adherence to training, insurance, and collections benchmarks because the vendor does all of the work.
Increased Transparency
Many healthcare providers are concerned that outsourcing medical billing and coding is equivalent to giving outsiders complete control over their revenue cycle management (RCM).
But it isn’t the case! By agreeing to a service agreement, a medical BPO commits to giving you POSITIVE RESULTS based on predetermined parameters.
A/R days (the number of days it takes for a claim to be paid), the first-pass rate (the ability of a claim to be reimbursed on the first try), the denial rate (the tendency of claims to be rejected or refused by the payers on average), etc, are examples of these measures.
By speaking candidly with the medical outsourcing provider, you may establish metrics. They are required to support results with pertinent data after they accept the metrics you have provided. Consequently, complete revenue cycle transparency is attained.
Also, any trustworthy medical billing outsourcing company will post delays and issues more efficiently than most in-house employees, as well as create and share reports with you regularly. This eliminates the need for micromanagement and improves oversight of the overall financial performance.
Cost Saving
The cost of internal billing is high. Practices can manage their costs on a cost-per-patient basis by outsourcing their medical billing and coding.
The costs add up when you have medical billing and coding employees working for you. These include payroll, benefits, insurance, onboarding, and infrastructure installation expenses. Additionally, you have to balance patient satisfaction and high-quality care while monitoring your revenue cycle.
However, the sole responsibility of medical billing businesses is to MANAGE YOUR COLLECTIONS! Furthermore, your practice only pays these vendors a portion of the money they collect, and most contracts with them are performance-based.
As a result, you guarantee a healthier revenue cycle in addition to saving money on running a whole in-house department.
Reduced Billing Mistakes
The worst nightmare for medical offices is making billing mistakes and adhering to erroneous collection policies. It damages your reputation, causes penalties, and delays your payments.
Negligence in earlier authorization, inadequate or erroneous patient data, coding errors, or duplicate billing can all have a detrimental effect on your revenue cycle, leading to delays and denials.
Here, too, outsourcing proves to be a lifesaver! It ensures prompt claim submission, error-free coding, current billing procedures, and automated eligibility and benefit verification. Additionally, outsourcing firms have stringent quality assurance procedures that result in increased accuracy because they employ qualified coders and billing specialists.
Increases Patient Involvement
All healthcare professionals and other employees concentrate on enhancing their products and efficiency to support the revenue stream in light of the recent price reduction and growing operating costs in medical practices. This frequently results in patients becoming dissatisfied as the emphasis moves from them to the healthcare facility’s financial concerns.
Your employees may concentrate on providing in-person care, patient engagement, satisfaction, and strengthening patient-provider relationships when you relieve them of the billing and coding responsibilities.
Increased Reimbursements
Reductions in coding and billing errors shorten the time it takes to receive reimbursement and increase the first-pass rate. Inadequate paperwork, coding problems, invoicing errors, non-compliance with regulatory standards, etc., are the SIMPLE causes of delays and rejections. You may DITCH these difficulties by hiring experts to handle medical billing and coding. Consequently, quicker refunds are guaranteed.
Drawbacks of Using Outside Medical Billing and Coding Services
There is nothing perfect in this world! This also applies to medical billing and coding that is outsourced. Although outsourcing billing operations offers many advantages, you run the risk of jeopardizing not just your revenue cycle but also the standing of your practice if you DO NOT select a reliable partner.
Therefore, we advise you to take the time to go over the drawbacks of outsourcing to a subpar medical billing firm before making a decision.
Therefore, let’s get started without delay!
Lack of Resource Control
Administrators of healthcare facilities frequently fear losing control when they assign their work to outsourcing agents. This is due to the possibility that the partners’ hardware or software is incompatible, which could lead to a lack of transparency.
To increase their earnings, some agents could also give priority to working on high-value accounts. Furthermore, it’s crucial to remember that patients can feel uncomfortable with other parties accessing and handling their accounts, which could lead to problems with customer support.
Lack of Security Procedures
When incorporating outsourced medical billing and coding services, your practice must fulfill its obligation to protect patient confidentiality and security. It should be mentioned that giving third-party service providers access to your systems may open the door for harmful activity, including cyberattacks.
A security vulnerability could occur if the outsourced organization doesn’t maintain its software updated. Therefore, it’s crucial to find out how a potential medical billing partner handles their digital ties. Additionally, you can learn more about their internal information leak prevention training initiatives. Knowing their protocols is also essential for spotting any outside dangers.
The US Department of Health and Human Services study states that there were 48 distinct ransomware occurrences in 2021 alone. Cyberattacks affect about 34% of hospitals and healthcare facilities. Sixty-five percent of them said that their patient data had been successfully encrypted by cybercriminals.
Is Medical Coding and Billing Worth Outsourcing?
Healthcare professionals and other medical personnel can concentrate on the performance of their practice and work to maintain patient engagement and satisfaction by outsourcing medical billing and coding.
However, it is not the sole cause. By outsourcing the complex billing and coding process, practices can reduce overhead expenses by eliminating the need to hire staff, set up costly infrastructure, obtain software licenses, etc.
Your partner billing business is now in charge of managing your accounts, following up on claims, creating and submitting claims, handling denials, and adhering to legal requirements.
To increase the general productivity and efficiency of your practice, we advise you to contract with a specialized billing company to handle your medical billing and coding.
Conclusion
This tutorial covered medical billing outsourcing thoroughly. The benefits and drawbacks were discussed very good. Choosing a provider needs care now. Do a comprehensive background check on all candidates. Study internet reviews for sure. Ask challenging questions like data security procedures. It is wise business.
We make investments in the education and training of our employees to guarantee adherence to legal requirements as well as various insurance payer specifications. Our partner practices benefit from increased openness, fewer denials, and quicker reimbursements as a result.
