One of the key advantages of billing outsourcing, when it is done correctly, is the clear alignment of incentives between the practice and the billing company.
The average medical billing company's fee is a percentage of the practice's collections. As a result of this their compensation is directly proportional to to how much money they collect for your. In stark contrast to this are internal medical billing employees that are paid on an hourly basis. They are paid because they are at their desk, not because money is flowing into the practice's bank account.
Most people would prefer all their service providers to have "skin in the game" and only be paid for success versus just for making an attempt. For instance, would you prefer to pay your mechanic only if he properly fixed your car (and only for a previously agreed to price) or would you prefer to pay him an hourly rate and hope he will be as effective and efficient as possible in performing the job?
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
This reaction is surprisingly common. Typically practices have so much trouble recruiting, training and retaining billing staff they are reticent to let one go. In addition, the billing staff complains about how understaffed they are and how they cannot be held responsible for not being able to complete even basic medical billing tasks. In this office's case they moved the biller to the front desk and had her in charge of collecting patient demographics. A place where she can do even more harm through poor performance.
This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from "falling through the cracks".
- Any claims that are denied for timely filing should be the responsibility of the billing company. In other words, they should make the practice whole if they fail to file your claims. This is not a demand you can make of in-house billers (it is not even legal to make it).
- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.
We often hear from the physicians how hard and long they work for ever decreasing reimbursements. All this is true. However, too often we also see practices (through various reasons) hurt themselves financially - over and over again.
No - your staff will not work harder for you just because you employ them; and No - the biller who lost you $40,000 will not do any better job collecting money and gathering information from patients. You will probably need to "sternly" reprimand them again.
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
The average medical billing company's fee is a percentage of the practice's collections. As a result of this their compensation is directly proportional to to how much money they collect for your. In stark contrast to this are internal medical billing employees that are paid on an hourly basis. They are paid because they are at their desk, not because money is flowing into the practice's bank account.
Most people would prefer all their service providers to have "skin in the game" and only be paid for success versus just for making an attempt. For instance, would you prefer to pay your mechanic only if he properly fixed your car (and only for a previously agreed to price) or would you prefer to pay him an hourly rate and hope he will be as effective and efficient as possible in performing the job?
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
This reaction is surprisingly common. Typically practices have so much trouble recruiting, training and retaining billing staff they are reticent to let one go. In addition, the billing staff complains about how understaffed they are and how they cannot be held responsible for not being able to complete even basic medical billing tasks. In this office's case they moved the biller to the front desk and had her in charge of collecting patient demographics. A place where she can do even more harm through poor performance.
This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.
Utilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from "falling through the cracks".
- Any claims that are denied for timely filing should be the responsibility of the billing company. In other words, they should make the practice whole if they fail to file your claims. This is not a demand you can make of in-house billers (it is not even legal to make it).
- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.
We often hear from the physicians how hard and long they work for ever decreasing reimbursements. All this is true. However, too often we also see practices (through various reasons) hurt themselves financially - over and over again.
No - your staff will not work harder for you just because you employ them; and No - the biller who lost you $40,000 will not do any better job collecting money and gathering information from patients. You will probably need to "sternly" reprimand them again.
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, Founder and Chairman of ClaimCare Medical Billing Services, is an expert in the field of medical billing and medical practice management. Carl has been working in the medical field for more than 12 years. Prior to that Carl worked as an aeronautical engineer for Boeing. Read more about medical billing companies at the ClaimCare Blog.
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