Medical billing is a primarily clerical task that requires specific skills and training and can be done independently of the actual administration of health services. This makes it the ideal job 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, equating to $55.6 billion annually by 2032.
But why is there such a massive 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 a healthcare provider or practice’s billing and insurance claims processes. The outsourcing company is responsible for coding, submitting claims to insurance companies, following up on denied claims, collecting payments from patients and insurance companies, etc.
Outsourcing medical billing aims 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 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 patient records safe.
1 . Win Your Time Back With New Efficiencies.
Outsourcing medical billing services means you’ll spend less time managing people and constantly checking their work. Instead, you can 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 services and let the professionals handle the deadlines.
Focusing on your 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. It would be best to have state-of-the-art IT equipment, updated software, and 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 of in-house medical billing. Professional billers will set up all client billing software using providers’ tax IDs and NPI information.
Outsourcing your billing eliminates the additional costs of recruiting and training your in-house billing team. Your practice will enjoy much lower prices and liability than keeping your billing in-house.
3. Increased Efficiency And Accuracy
A medical billing service company has a team of experts trained and experienced in handling all aspects of medical billing (benefit verification, coding, claims submission, payment collections, etc.) Because of this, the 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 severe penalties. On the other hand, bills are too low, and you may leave money on the table.
How can you strike the perfect balance and bill at the right level?
That’s where a medical billing service comes in! Billing companies typically employ a coding expert who can advise you on 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 outsourcing medical billing will boost your bottom line.
5. Secure Patient Data
Finally, one of the best reasons for outsourcing lies in the added security it provides. Below are some 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 protect patients’ records.
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. Omnichannel technology will also positively affect the patient experience at a practice.
7. Deeper Insight Into the 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 the 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, specifically about the going rate for medical billing services. But for your convenience, we have included some of the critical outtakes here.
Outsourced Onshore Medical Billing Services
- Medical billing companies in the United States spend 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 quickly change depending on your volume and how many billers the company will hire to service the minimum hours your billing requires.
Outsourced Offshore Medical Billing Service
- They generally offer lower rates than their onshore counterparts.
- They range from 2% to 3% of monthly collections.
- Minimum charges are much cheaper than onshore services, usually around $500 monthly.
Hybrid Billing
- 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. The bulk of transaction processing work, such as claim entry and payment posting, is outsourced offshore.
- Hybrid services range from 3% to 5.5%.
What’s the ROI on Outsourced Medical Billing?
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
Conclusion
The continued growth in demand for outsourcing billing services indicates that more and more medical providers realize the benefits of 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 the 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 find 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 ten years. Our experts are familiar with the best practices and industry know-how for preventing revenue leakage, enhancing collections, and improving your overall revenue. This can give you 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 to stop revenue leakage and improve the overall financial health of your practice.
