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.
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
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 recent meeting with a multi-physician provider practice I was told a tale that I have heard many times before. One of the offices multiple medical billers was out for a few days. While she was out her supervisor was looking through the billers desk for some information that was needed. What she found was over $40,000 worth of old claims that the biller had stuck in her bottom drawer and never billed. As if this was not bad enough, almost all of the claims were beyond the timely filing deadlines and the money was lost forever. When the medical biller was back in the office she was reprimanded for this horrendous error. She was not terminated - she kept her job despite the fact the office lost thousands of dollars because of this horrific medical billing performance.
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.
There should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice's system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice's medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
- 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.
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
Without properly aligning the incentives (both upside and downside consequences) of in-house medical billers, you can rest assured that history will likely repeat itself and the biller that lost $40,000 in charges is unlikely to excel at demographic collections.
A judicious selection of a medical billing company that meets the criteria outlined above is your most direct and reliable method for avoiding your own medical billing horror stories.
Copyright 2008 by Carl Mays II
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
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 recent meeting with a multi-physician provider practice I was told a tale that I have heard many times before. One of the offices multiple medical billers was out for a few days. While she was out her supervisor was looking through the billers desk for some information that was needed. What she found was over $40,000 worth of old claims that the biller had stuck in her bottom drawer and never billed. As if this was not bad enough, almost all of the claims were beyond the timely filing deadlines and the money was lost forever. When the medical biller was back in the office she was reprimanded for this horrendous error. She was not terminated - she kept her job despite the fact the office lost thousands of dollars because of this horrific medical billing performance.
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.
There should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice's system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice's medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
- 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.
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.
Without properly aligning the incentives (both upside and downside consequences) of in-house medical billers, you can rest assured that history will likely repeat itself and the biller that lost $40,000 in charges is unlikely to excel at demographic collections.
A judicious selection of a medical billing company that meets the criteria outlined above is your most direct and reliable method for avoiding your own medical billing horror stories.
Copyright 2008 by Carl Mays II
About the Author:
Carl Mays II, President and CEO of ClaimCare Medical Billing Services, is an expert in the field of medical billing and medical practice management. Carl has been working with medical clients since 1995. Prior to that Carl worked as an aeronautical engineer for Boeing. Read more about medical billing companies at ClaimCare's medical billing blog.
