Understanding Medical Billing in Healthcare Practices
One of the more complex components of running a medical practice is managing your organization’s medical billing process. With thousands of potential medical codes for different diagnoses and procedures, on top of the numerous payers in the market, having the ability to effectively manage billing is a key driver of success in today’s healthcare industry.
In-House vs Outsourced Billing: No One-Size-Fits-All Solution
There is no “one-size-fits-all” as it relates to medical billing solutions; however, the two primary options for a healthcare organization are in-house medical billing and outsourced billing. There are three overarching considerations when evaluating whether to implement in-house or outsourced billing:
- The cost
- An organization’s capacity to execute billing
- Maintaining confidential health services while billing
Evaluating the Cost of Medical Billing
Evaluating the cost implications of your selected billing option is critical for revenue management. For small clinics, there may not be enough revenue generated to cover the fixed costs of billing and turn a return on investment (ROI). It is important to do a cost-benefit analysis to ensure that the clinic can expect a net income.
Essential Internal Billing Activities
Whether or not your organization elects to keep billing in-house or outsource billing, a handful of important billing activities must be maintained internally. As an organization, you are held accountable for submitting accurate and timely billing information to the outsourced billing agency or to individual third-party payers. The organization is also responsible for:
- Insurance verification
- Medical patient registration
- Coding
Maintaining Confidentiality: Written Billing Policies
Finally, it is of utmost importance to have clear written healthcare billing policies on how to manage bills and balances to ensure private patient information is managed appropriately.
Exploring In-House Billing
In-house billing includes the staff of a clinic or healthcare organization being responsible for all aspects of revenue cycle management. They submit claims to a clearinghouse, directly to Medicaid, or to the insurance company for reimbursement. They also set charges, collect patient fees (copays and deductibles), and manage the accounts receivable.
In-housing billing comes with several advantages all of which include:
- More visibility over the billing process
- High flexibility
- Increased control over patient accounts
Nevertheless, it’s essential to be mindful of the potential difficulties linked with in-house billing, which encompass:
- High upfront expenses for labor and technology
- Ongoing training needs
- High dependency on your staff members
Outsourcing: A Common Solution to Medical Billing
Many healthcare organizations opt to outsource their medical billing to a third party. These third-party companies typically take a percentage of a healthcare organization’s collections as payment for managing many aspects of a revenue cycle, on top of recurring monthly fees.
Outsourced billing has countless benefits which may include:
- Having more experienced parties managing your billing
- Advanced software options
- Saving on internal time and resources
However, outsourced billing requires your organization to:
- Maintain and oversee contractual obligations to the selected third party
- Outsourcing gives your organization less control over patient accounts
Weighing the Choices: Outsourced vs In-House Medical Billing
The decision in outsource medical billing versus billing in-house is very dependent on your organization’s needs and resources, and each option has its own benefits and disadvantages.
To learn how Pathstone Partners can help your organization with medical billing, contact our team of healthcare experts.
