Services
Contact
MRC
Buster
Justifying a
Billing Service
By Flo Murray
When would an outside billing service be justified instead of in-house personnel?
The focus of this article is to get you to look at your current billing situation
and assess if you would benefit from switching to an outside billing service.
The main reason many doctors choose to do their billing in-house
is because they feel they have better control. This is certainly true if someone
inside the practice truly understands billing, collecting and tracking.
If that person has done it for many years, has experience with the hundreds
of different scenarios you run into every day, and has the time to coordinate
and focus on getting paid for all claims, then keeping the billing inside may be the right decision.
If the practice is also profitable with the current in-house billing department expense,
the billing should probably be done inside. A doctor's take home pay is directly
related to overhead, and in-house billing expenses can be a high percentage of overhead.
If you stay with inside billing it is recommended that you have a support network
of some sort: the annual H. J. Ross hotline, CCA hotline, or other doctors'
billing departments that you can call in time of need. If your billing department
has no outside resources to fall back on, the ability to collect
on certain accounts is limited by your office person's experience.
If you think things are running smoothly in your billing department, but you never
ask about any one patient's individual account,you have no clue whether things
are running smoothly. When the billing manager is not accountable to anyone else
(the doctor, doctor's spouse, the accountant, etc.), you depend solely on that
person to make sure everything is handled timely and efficiently.
I know a doctor who thought he had a very efficient billing department, but he was
unaware that his billing manager had plans to leave his employ. As she neared her
last two months of commitment to the doctor, she stopped sending the billing out!
To the doctor's dismay, he was unable to get paid for approximately $10,000 in claims
the managed care plan refused to pay because of missed deadlines. This costly
problem occurred because the doctor depended upon the billing manager, who was
not accountable to anyone else for her work. In other cases, doctors have had
billing managers for years without problems, because they take pride in what
they do and would never consider leaving without helping to hire and train their replacement.
If no one double-checks your department from time to time, you really can't be sure.
Even if you use an outside billing service, you do not really gain any control
unless you have someone check their work as well. Though switching to an outside
service will not necessarily give you better control, it can provide some of the following benefits:
- 1. You don't need to worry about your biller quitting and leaving you high and dry.
- 2. You don't need to worry about retraining if your in-house biller leaves.
- 3. You don't need to worry about the transition on problem accounts from one biller to the next.
- 4. You don't need to worry that a new biller will ask you to make an investment in the software that he or she uses.
- 5. You will have more space, time and energy to treat patients.
- 6. No one will be argue with an insurance company on the phone where patients can overhear.
- 7. You will gain the expertise of the billing company's many years of service to your industry, assuming you choose a billing company with this sort of experience.
- 8. You should see no break in your service or cash flow, as long as you choose a billing company that is dedicated to providing excellent service and has the expansion capabilities necessary to grow with your business.
- 9. You will save many expenses associated with inside billing.
compute the cost of doing the billing inside and compare that to the cost quoted
by the outside service. Your inside costs include: payroll labor hours;
payroll labor overhead; postage; paper; computer support; billing program support;
telephone bills; and any other direct costs you can associate with doing the billing.
You should also consider an alternate use of the billing department's space,
such as having an extra massage room or renting it to an associate who works
on a percentage.
Consider your own time and energy expended on hiring and replacing personnel.
Consider who trains the new staff person and the time it takes a new person to get
comfortable with your office and procedures. Your in-house personnel should
attend seminars that keep them updated on industry changes, but that can be an
added expense.
As you can see, some costs are not easy to compute mathematically. Sometimes the
situation is black and white, and you can save a lot of money by going to
outside billing. In other cases where expertise rather than money may be the issue,
you may not see a direct savings. However, a good billing service will pay
for itself with its knowledge and experience, and may be able to collect more
than your own in-house staff. This is particularly true in offices where a single
staff person supports the doctor. That person is expected to answer all phone calls,
do all the paperwork management, and perhaps even assist in therapy occasionally.
If a doctor's volume is only 30 to 50 patient visits per week, using an outside
service may not be cost-justified. However, the cost of a service handling that
volume of billing might be as little as $400 per month.
If the billing service has the kind of expertise you need, then justifying that
expense is very easy to do, because they will easily be able to collect an average
of $400 more per month than your inexperienced in-house biller. Your in-house staff
person would then have more time to help you with recalls, screenings, etc.
I have heard horror stories about billing services. There are good and bad services
everywhere, just as there are good and bad employees. However, I have heard many
more horror stories associated with in-house problems:
- drawers full of problem billings that went untouched and are now uncollectable due to insurance policy filing requirements
- personal injury cases that went unpaid because no one had a tracking system for following up on the old cases
- workers' compensation cases that no one in-house knew what to do with - cases that were
easily collectable by someone with the proper experience.
how things are running. You might consider bringing someone in to help assess
your department. Many billing services have people who will do that for you. If they take over the billing, they should help you make a good transition.
Knowing how your office runs will be the key to their helping you get your billing out in a timely and efficient manner with as little stress to the practice as possible.
Website by dcWebCo