IN-HOUSE OR OUTSOURCED BILLING

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1 IN-HOUSE OR OUTSOURCED BILLING Medical billing is ne f the mst cmplicated aspects f running a medical practice. With thusands f pssible cdes fr diagnses and prcedures, and multiple payers, the ability t have efficient billing is a real challenge. There isn t a ne size fits all slutin when it cmes t medical billing, but the tw main ptins are in-huse billing thrugh a Practice Management System (PMS), with r withut an Electrnic Medical Recrd (EMR), r utsurcing t a medical billing cmpany. In-huse Staff f the Clinic r Health Department are respnsible fr all aspects f Revenue Cycle Management. They submit claims t a clearinghuse r directly t Medicaid r the insurance cmpany fr reimbursement, set charges, cllect patient fees and manage the accunts receivable. Outsurced Prviders may utsurce their medical billing t a third party knwn as a medical billing service. These billing services typically take a percentage f a practice's cllectins as payment fr managing many aspects f the Clinic s Revenue Cycle Management. There may be recurring mnthly fees as well. In rder t determine whether t keep billing services in-huse r t utsurce them, a cst-benefit analysis shuld be cmpleted t weigh the csts f billing t yur agency in terms f persnnel, training, technlgy, and ther resurces versus the cst f cntracting with an utside rganizatin. 1 Fr mre infrmatin read Chris Thrman s article, Shuld Yu Outsurce Yur Medical Billing?. 1 Thrman, C. Shuld Yu Outsurce Yur Medical Billing? March 6,

2 Clearinghuse A clearinghuse is a cmpany that accepts electrnic claims frm a medical grup s practice management sftware (PMS). They "scrub" the claims, lking fr bvius pssible reasns fr rejectins, fr example, if the date f birth is missing n the claim. They then put the claims in a universal frmat and electrnically send them ff t the insurance cmpanies fr prcessing. Sme clearinghuses prvide mre services than thers. Often clearinghuses partner with individual practice management systems. The PMS cmpany recmmends r cntracts with the clearinghuse. Smetimes the medical grup pays the clearinghuse directly, ther times it is included in the service bill frm the PMS. Fees are usually charged n a per claim basis with a minimum charge. Outsurced Billing Outsurced billing services n the ther hand prvide cmprehensive Revenue Cycle Management. An utsurced billing services cmpany will have its wn PMS and they will utsurce t the clearinghuse fr claim scrubbing and submissin. Outsurced billing service cmpanies usually charge a percentage f revenue cllected. In-huse vs. Outsurced Billing Cnsideratins Belw are sme f the Prs and Cns and cnsideratins yu may want t explre befre making the decisin t bill in-huse r use utsurced billing services. In-huse Prs: Outsurced Prs: If existing emplyees have the capacity t execute medical cding and billing, prviders and administratrs appreciate having handsn cntrl f financial peratins thrugh inhuse billing. Especially if a clinic is starting up, utsurcing is less expensive. An utsurced billing cmpany shuld ffer: State f the art billing sftware. Once a practice has invested in training medical billers and purchasing billing technlgy, mving t an utsurced slutin means lsing lts f time and mney spent. Access t individuals with expertise in medical cding and billing. Access t staff wh are up-t-date with 2

3 When there is infrastructure in place, it s wrthwhile t just refine existing billing prcesses t generate the best return n investment. Shuld issues arise, the accessibility f yur inhuse billing department is a majr advantage, since all it takes t bserve the billing prcess and address any prblems is a walk acrss the ffice flr. There are nw many web-based practice management systems. This reduces the need t purchase expensive hardware and special netwrking systems. Updates t sftware are made autmatically. The system is always current. Maintaining patient cnfidentiality is ne f the mst imprtant issues fr STD clinics. Inhuse billing allws fr strict cntrl ver patient accunts. regulatins and recent changes t regulatins. (Keeping clinic staff and billing systems up t date with the latest billing rules can be time cnsuming fr prviders and health department administratrs.) Cding and billing rules and regulatins training fr clinic staff. Timely and effective accunts receivable management. Ability t identify cding r registratin prblems and able t cmmunicate thse prblems t apprpriate staff when necessary. 2 Supply the clinic with cmprehensive perfrmance reprts and data extracts autmatically r upn request. Appeal denials, with a certain level f success. 2 Kern Cunty Public Health Services. Califrnia s Innvative Immunizatin Billing Prject Plan,

4 In-huse Cns: Outsurced Cns: Upfrnt expenses include labr, csts fr technlgy, hardware, billing sftware and training; and n-ging expenses fr maintaining the billing system. If the training and billing capacity f staff is nt kept up t date, there can be higher rates f denials, un-appealed claims, and lwer reimbursement rates. If the billing department cnsists f nly ne r tw staff members, the peratins and cash flw can be disrupted when even just ne emplyee gets sick, ges n vacatin, takes a leave f absence r quits altgether. Lss f cntrl f the wrk being perfrmed. Pssible misunderstanding f cntractual agreements. HIPAA privacy and security can becme a greater cncern when utsurcing the billing. Typically billing service fees frm utsurced cmpanies are based n a percentage f cllectin and the fee is generally higher per claim fr lwer vlumes f claims. Sme billing cmpanies will nt cntract with small sites; they may have a minimum number f claims fr them t cntract with a clinic. Billing Services Cnsideratins: Billing Internally Des the clinic r health department cnsidering billing have the internal knwledge and/r capacity t bill fr services? If nt, hw will yu build that capacity? Wh will lead the prcess f establishing and verseeing billing? Is the clinic r health department billing fr ther services, such as immunizatin, family planning r TB? Culd the STD clinic partner with ther prgrams t leverage the assciated csts and respnsibilities? 4

5 Outsurced Billing Are there ther clinics, service sites, r prviders with which yur clinic culd frm an partnership t attain the minimum number f claims fr cntracting? Even if the clinic selects an utsurced billing cmpany, many billing activities must be maintained within the clinic. Fr example, insurance verificatin, demgraphic infrmatin cllectin, patient registratin and cpay cllectins. Hw will these services be maintained? Hw des the clinic want t handle bills and balances that are the patient s respnsibility? Des the clinic want t maintain cntrl f all direct cmmunicatins with the patient? Cnsidering a Billing Cmpany Is the billing cmpany lcal? Can yu meet with them in persn? Or is it a virtual relatinship? Is the clinic cmfrtable with that arrangement? T which insurance carriers des the billing cmpany submit claims electrnically? Hw will the billing cmpany prvide the STD clinic with assurances regarding sensitivity and cnfidentiality when cmmunicating with patients? Will the billing cmpany be sending any bills, inquiries r speaking with the patients? Hw will the utsurced billing staff be trained regarding the unique cncerns f STD patients? 5

6 What are the terms f the cntract? Beware f hidden fees. Read the cntract carefully. Are there startup charges? Fees fr things like printing statements r sending reprts? What happens if the cntract is cancelled prir t its terminatin date? Make sure the mney saved by utsurcing isn t ffset by a multitude f fine-print charges. 3 What is the length f the cntract? Again, are there fees fr early terminatin? Hw will hardship discunts be handled? Is the billing cmpany cmfrtable with a flexible patient billing plicy? Fr example, if n ne will be sent t cllectins r n bills will be sent t patients hmes. Wh will be respnsible fr credentialing r re-credentialing? Is that a service they ffer? If yes, are there any additinal fees fr this service? Hw d they pst rejectins and denials? Are the rejectins and denials tracked? If s, request a cpy f a sample reprt. Ask them fr three references. What standard reprts des the billing cmpany prvide and hw ften? *STDTAC/Jan Yung, M. In-Huse vs. Outsurced Medical Billing: Prs and Cns. 6

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