The choice to outsource your medical billing can yield substantially better results than the choice to keep billing in-house. Why? Because a properly structured outsourced billing relationship insures that the medical billing company succeeds by making you succeed.
Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.
This is a critical distinction that is easily missed because of the misplaced belief that if the billers work for the practice then they care more about its collections. I am not saying they do not care, but I am saying that when your biller has their economic incentives completely aligned with yours (as with a medical billing service) it makes a big difference in how they think about your medical billing and how well they perform their job.
In a conversation I had recently with a busy cardiologist I heard a story that is not unusual. One of the office's medical billers called in sick. Some information was needed while she was out so the office manager went looking through her desk. She did not find the information she needed, but she did find over $40,000 worth of claims that had not been billed and had gone beyond the timely filing deadline. That is right, $40,000 worth of claims that could not be billed and for which no money would ever be realized. Upon the billers return she was "sternly reprimanded for this egregious error. Not fired, but reprimanded for costing the practices tens of thousands of dollars. There is no alignment of incentives present in a situation like this.
When I asked the doctor why a more severe action was not taken, he explained to me that "we already have staffing problems and did not want to alienate the billing staff any further." The guilty biller was apparently moved to the front-desk role and is now responsible for gathering demographic information and money.
I also asked how it was possible that the billing supervisor missed that $40,000. Did they not reconcile charges and payments and track charges, payments and write-offs? To this the doctor replied that "their system did not provide this level of reporting and no such reports were ever given to him". Since, the practice was using a new release of a major billing software, I know this system has such capabilities - it is just that either (1) no one knows how to use the system-that's bad or (2) they just don't want to bother-that's' worse! Just imagine how much money is probably lost at this practice annually.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- All the charges, payments and write-offs should be made visible to you. Everything should be tracked so no charges (batches, days or places of service, etc) can be missed.
- Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company's control. What this means is that you never suffer financially if the billing company drops the ball. Try to have your billers reimburse you if they drop the ball.
- You should have access to the billing system so that you can see real time status of your account.
As physicians struggle with stagnant (at best) reimbursements and escalating costs, it is critical that they make the best possible decision in regards to their medical billing. Selecting a solution that structurally minimizes the risk of poor medical billing is critical.
It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.
Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.
Copyright 2008 by Carl Mays II - 16089
Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.
This is a critical distinction that is easily missed because of the misplaced belief that if the billers work for the practice then they care more about its collections. I am not saying they do not care, but I am saying that when your biller has their economic incentives completely aligned with yours (as with a medical billing service) it makes a big difference in how they think about your medical billing and how well they perform their job.
In a conversation I had recently with a busy cardiologist I heard a story that is not unusual. One of the office's medical billers called in sick. Some information was needed while she was out so the office manager went looking through her desk. She did not find the information she needed, but she did find over $40,000 worth of claims that had not been billed and had gone beyond the timely filing deadline. That is right, $40,000 worth of claims that could not be billed and for which no money would ever be realized. Upon the billers return she was "sternly reprimanded for this egregious error. Not fired, but reprimanded for costing the practices tens of thousands of dollars. There is no alignment of incentives present in a situation like this.
When I asked the doctor why a more severe action was not taken, he explained to me that "we already have staffing problems and did not want to alienate the billing staff any further." The guilty biller was apparently moved to the front-desk role and is now responsible for gathering demographic information and money.
I also asked how it was possible that the billing supervisor missed that $40,000. Did they not reconcile charges and payments and track charges, payments and write-offs? To this the doctor replied that "their system did not provide this level of reporting and no such reports were ever given to him". Since, the practice was using a new release of a major billing software, I know this system has such capabilities - it is just that either (1) no one knows how to use the system-that's bad or (2) they just don't want to bother-that's' worse! Just imagine how much money is probably lost at this practice annually.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- All the charges, payments and write-offs should be made visible to you. Everything should be tracked so no charges (batches, days or places of service, etc) can be missed.
- Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company's control. What this means is that you never suffer financially if the billing company drops the ball. Try to have your billers reimburse you if they drop the ball.
- You should have access to the billing system so that you can see real time status of your account.
As physicians struggle with stagnant (at best) reimbursements and escalating costs, it is critical that they make the best possible decision in regards to their medical billing. Selecting a solution that structurally minimizes the risk of poor medical billing is critical.
It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.
Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.
Copyright 2008 by Carl Mays II - 16089
About the Author:
Carl Mays II, Founder and Chairman of ClaimCare Medical Billing Services, is a medical billing and process design expert. Carl has been working in the medical field for more than 12 years. Prior to that Carl worked as a mechanical engineer for Boeing. Read more about medical billing companies at the ClaimCare Blog.
