How To Know If You Should Outsource Your Medical Billing

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Medical billing is one of the most complicated, time-consuming parts of running a practice. A 2018 study published in JAMA found that billing and insurance-related activities can take anywhere from 13 minutes for a primary care visit to 100 minutes for an inpatient surgical procedure.

Understandably, as practices grow, many providers face a breaking point. They must take an objective look at their workload and determine whether or not they should outsource their medical billing.

We spoke with DrChrono medical billing and RCM expert, Mursal Ahmad. She explained what to look for, whether you’re a new practice or an established provider who wants to ease the burden on staff.

When Should You Outsource Billing?

As a rule of thumb, a provider should consider outsourcing medical billing when new patient volume and claims volume become unmanageable. Work may start spilling out after hours. According to Ahmad, that means that there are completed appointments with either charges not entered or claims not billed.

Additionally, practices need to look at their net collections rate. This determines whether they can afford a revenue cycle management system. More specifically, practices should review metrics such as the number of days in AR, clean claims rate, and denials rate.

“If anything is spending 50 days or more in AR, there is a very serious problem worth looking into. A typical benchmark for a practice should be about 30 to 35 days,” said Ahmad. “If your clean claims rate is below 85%, then something is wrong with your practice’s RCM strategy. Similarly, a denials rate over 10% indicates that there’s something wrong with your RCM workflow.”

These numbers provide guidance. However, some practices still might only be comfortable outsourcing select medical billing tasks.

“Some customers want to keep coding and patient support in-house while allowing RCM services to manage their claim submission and their receivables,” Ahmad explained.

If a client prefers, they can continue to code their claims and have them reviewed for accuracy. From there, the RCM team can change the codes themselves if the practice allows them to do so.

The provider could also receive a note explaining the team’s findings and suggestions. Then, the practice can update the codes if they agree.

However, not everyone looking to outsource medical billing is an established practice.

Providers looking to start an independent practice should also consider these options. They’re especially helpful if the practice isn’t already properly credentialed. They may need a stronger understanding of how to code their claims.

A good billing and coding service can serve as a springboard for newer practices. They then have more time to become more comfortable with the billing process.

Ahmad points out that RCM companies can cover everything from obtaining the NPI number to getting them credentialed with the payers. They are especially adept at knowing which CPT codes they can and cannot bill for. This gives practices a lot of space to focus on the care they give and their growth as a business.

How to Look for a Revenue Cycle Management Service

Once a practice is ready to outsource its medical billing, it’s important to know what to look for in a revenue cycle management (RCM) company. Ahmad recommends starting that process of discovery with some more introspection.

Create goals

“What are your expectations from an ideal billing service? Those sorts of things need to be thought about from a practice perspective first. What do you want to achieve when outsourcing your RCM?” Ahmad asks.

First, develop some concrete goals. Your practice can then precisely refine its needs and communicate them to your new billing service.

Typically, RCM services will charge in one of two ways. They may bill a percentage of your total collections rate. Or, they may offer a bare minimum monthly or annual fee.

Make sure you have a general understanding of the revenue you expect to generate each month. That will make determining which will work better for your practice easier.

Tailor your search to the needs of your practice

Consider how much support an RCM company offers. You may anticipate having a lot of questions after business hours, particularly as a new practice. If so, seek out a service with a ticketing system to accommodate that.

Working with an organization that provides a dedicated account manager for your practice is also recommended. They should be the main point of contact and an advocate for your practice.

Your practice may want to be able to completely hand off all billing. If that’s the case, transparency is paramount to a productive relationship between a practice and an RCM organization

“First, we do not want to bother you with any unnecessary billing issues unless we absolutely have to. The only time we will ask you for something is if there was information we cannot obtain from the chart or note ourselves,” says Ahmad.

However, she always makes a point of being very transparent about the work that she does. At any point in time, she can show a provider where their claim is in the revenue cycle process. They can see the work that she’s doing to try to get the claim paid.

She wants that information to be very clear to a practitioner. That way, if anybody wants to take over the account from the practice’s side, they can do that with the click of a button.

Other Things to Consider

When considering an RCM service, evaluate their track record with similar-sized practices or specialties. Look for an RCM that has successfully managed billing for practices similar to yours. They can provide tailored solutions that are more likely to meet your unique needs.

In addition, verify their compliance with healthcare regulations like HIPAA. You want to know they ensure patient data security and confidentiality.

It’s also wise to ask about integration capabilities with your existing Electronic Health Records (EHR) and practice management systems. Seamless integration simplifies the transition. It also ensures that patient data flows efficiently between systems. This reduces the likelihood of errors and delays.

Another significant factor is the adaptability to the ever-changing healthcare billing landscape. Regulations and payer policies are frequently evolving. An RCM that stays up-to-date and proactive in adapting to these changes can save your practice from potential compliance issues and financial setbacks.

Consider, too, the customer service aspect. An RCM provider should offer robust customer support. It should include training for your staff and resources to handle patient inquiries. This can significantly enhance the overall experience for both your team and your patients.

Finally, don’t overlook the feedback from other practices that have used the RCM services. Testimonials, case studies, and even direct conversations with current clients can provide valuable insights into the RCM’s efficiency, reliability, and overall service quality.

Billing and coding are difficult but essential functions for every medical office. How you manage them is a defining decision for your practice. Revenue cycle management services can certainly go a long way in simplifying and improving that process in both the short and long term if you do it correctly.

To learn more about RCMs, visit our blog or schedule a demo today.