Medical billing is a largely clerical task that requires its own specific set of skills and training and can be done independently of the actual administration of health services. This makes it the ideal task for outsourcing.
If you are considering outsourcing your medical billing function, rest assured that you are not alone as the popularity of this option is drastically rising.
According to recent studies, the medical billing outsourcing market is exploding with an annual compounded growth rate CAGR) predicted to hover around 16.6% for the next nine years, which, will equate to $55.6 billion per year by 2032.
But why is there is such a huge growth in this market? But why do practices outsource billing services? This article will explore 7 of the benefits practices realize once they outsource medical billing.
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What does it entail to outsource medical billing services?
Outsourcing medical billing involves hiring a company to handle the billing and insurance claims processes for a healthcare provider or practice. The outsourcing company is responsible for tasks such as coding, submitting claims to insurance companies, following up on denied claims, collecting payments from patients and insurance companies, etc.
The goal of outsourcing medical billing is to improve revenue cycle management, increase efficiency, and reduce the administrative burden on healthcare providers.
If you wish to take a little break from reading and learn more about improving reimbursements at your practice, grab a beverage and watch the video below.
7 Reasons to Outsource Medical Billing Services in 2023
We’ll discuss how outsourcing will reduce both management and office overheads and save your practice quite a bit of money in the long run.
A professional billing company will also help you avoid overbilling and underbilling, thus maximizing your cash flow without risking an audit. They’ll do it all while enhancing your practice’s cybersecurity and keeping your patient records safe.
1 . Win Your Time Back With New Efficiencies.
By outsourcing medical billing services, you’ll spend less time managing people and constantly checking their work. Instead, you’ll be able to focus on providing services and measurable results. As a trained medical professional, you’ll have much more time to put your valuable skills to good use.
You’re the expert in your field; they’re the experts in theirs. Outsource medical billing service and let the professionals handle the deadlines.
Focusing on your own specialty is the most intelligent and cost-effective way to manage your medical practice. Above and beyond all its other benefits, outsourcing medical billing lets you do that.
2. Reduce Costs.
Along with reduced management overheads, you’ll also save quite a bit on office overheads by outsourcing your billing. After all, a lot goes into proper medical billing. You need state-of-the-art IT equipment, updated software, as well as all the staff required to operate them.
This will cost your practice substantial money, time, and office space. This is all on top of the additional liability that comes with doing your own medical billing in-house. Professional billers will set up all the needed billing software for clients using tax ID and NPI information from providers.
By outsourcing your billing, you’ll eliminate the added costs of recruiting and training your own in-house billing team. Compared to keeping your billing in house, your practice will enjoy much lower costs and liability.
3. Increased Efficiency And Accuracy
A medical billing service company has a team of experts who are trained and experienced in handling all aspects of medical billing (benefit verification, coding, claims submission, payment collections, etc.) Because of this, medical practice enjoys more accurate and efficient billing processes, reducing the risk of denied or delayed claims.
4. Avoid Overbilling And Underbilling
If your practice constantly uses the highest codes to bill, you risk being flagged by PPO or Medicare. This can result in audits and/or serious penalties. On the other hand, bill too low and you may end up leaving money on the table.
How, then, can you strike the perfect balance and bill at just the right level?
That’s where a medical billing service comes in! Billing companies typically employ a coding expert who can advise you how to bill neither too high nor too low.
They’ll get your billing rates exactly where they need to be to optimize cash flow without risking an audit. This is one of the chief ways that outsourcing medical billing will boost your bottom line.
5. Secure Patient Data
Finally, one of the best reasons to outsourcing lies in the added security it provides. Below are some of the shocking statistics regarding data breaches in the medical industry.
November of 2022 was quite bad regarding breached healthcare records. 6.904.441 records were exposed or impermissibly disclosed.
Medical billing companies put cybersecurity front and center. After all, their business lives and dies by the trust healthcare providers place in them. Even one data breach could ruin their reputation and end their career.
When hiring a medical billing company, do your homework first. Investigate their past security record and make sure they’re trustworthy.
A good medical billing service will handle cybersecurity and keep your patients’ records safe at all times.
6. Access To Advanced Technology
Medical billing companies typically invest in advanced technology and software that streamlines the billing process, which can improve the accuracy and speed of billing and payment collection. The use of omnichannel technology will also have a positive effect on the patient experience at a practice.
7. Deeper Insight Into Revenue Cycle
Do you know if your billing operations are improving or stagnating? Who is keeping track and how are they doing this?
Thanks to expertise and technology of medical billing companies, they can provide intuitive reports and highlight performance and growth areas. Depending on the company, these in-depth reports are provided frequently as per agreement or on-demand, whenever requested.
What Are the Fee Structures or Pricing Models for Outsourced Medical Billing?
We highly recommend that you read our article, relating specifically to the going rate for medical billing services. But for your convenience, we have included some of the key outtakes here.
Outsourced Onshore Medical Billing Services
- Medical billing companies located in the United States go for somewhere between 6.5% and 8% of monthly collections.
- Typically, this works out to a minimum monthly collection of $40,000.
- Minimum charges vary from $2,500 to $4,000 per month.
- However, this can easily change depending on your volume and how many billers the company will have to hire to service the minimum hours your billing requires.
Outsourced Offshore Medical Billing Service
- They generally offer lower rates than their onshore counterparts.
- Ranging from 2% to 3% of monthly collections.
- Minimum charges much cheaper than for onshore services, usually around $500 per month.
- When a practice employs both onshore and offshore resources to perform various tasks.
- Onshore services do the more complex aspects of billing such as checking claims and reviewing errors. Bulk of transaction processing work, such as claim entry and payment posting, is outsourced offshore
- Hybrid services ranges from 3% to 5.5%.
What’s the ROI on Outsourced Medical Billing?
If you consider the demand growth, then it suggests that there should be a positive return on investment (ROI) because why else would more and more practices be lining up to outsource their medical billing operations? In a previous article, we discussed what’s the ROI on partnering with a medical billing management services organization in detail.
If you don’t have time to read the entire article right now, here are some key outtakes to consider.
An Estimation of ROI
- Consider that you are a $4 million healthcare practice that collects around 85% of the bill owed.
- Uncollected annual revenue= $600,000
- An MSO with a 90% to 95% revenue collecting power can help bring down the uncollected figure to $400,000 to $200,000
- Your net collections will increase by an amount ranging from $200,000 to $400,000
- If the agency charges 4% for their services, you would still be collecting an additional $56,000 to $248,000
Thus, outsourcing your medical billing services will not only increase your collection but will also reduce overhead. You can literally add this $60,000 in savings to the additional collection of $56,000 to $248,000 made by your outsourced agency.
Conclusion
The continues growth in demand for outsourcing billing services indicates that more and more medical providers are realizing he benefits associated with outsourcing their medical billing processes versus keeping them in-practice.
The positive ROI associated with teaming up with a medical billing company, the reduction in stress and gaining of time thanks to the processes being moved over to capable and credible hands are some of the motivating factors that healthcare providers nationwide are finding most attractive.
Are you ready to take that next step to outsource medical billing or keen to learn more about the benefits?
Neolytix has been helping practices of all sizes improve their billing processes nationwide for over 10 years. Our experts are familiar with the best practices and industry know-hows of how to prevent revenue leakage, improve collections and improve your overall revenue. This can let you have more time to focus on patient care and even work toward that work-life-balance you aspire to have.
Schedule a FREE, no-obligation below to learn how you could stop revenue leakage and improve the overall financial health of your practice.
