When there’s an urge for optimization, most of the healthcare practices stick under a dilemma of
going either for outsourcing billing services or in-house billing. Scars earned from both the sides
actually highlight the struggle of navigating the hardships. Dealing with constant challenges like
hiring quality staff, cost, technology integration, medical coding updates, and changes in coding
regulations can bring down even the strong healthcare professional who gives a tough in managing
their billing practice.
On the other side of coin, it’s nothing but taking risk in providing a chunk of revenue payment to
medical billing companies. But on a positive note, outsourcing billing services can avoid
frustrating miscommunications, technical incompatibilities and missed expectations. So, the major
question is “what’s missing”? The biggest confusion arises whether to pay the hired staff or just
simply go for outsourcing billing services.
There are lots of hidden factors in fact. But there’s no right or wrong answer. It’s up to
healthcare professionals to choose what’s right for the practice. It’s very crucial to not ignore
hidden costs as they might leave you suckered by the knockout blow where you would regret for your
choice.
Outsourcing Billing Services or In-House Billing:
The hidden costs of the billing services are much more than expected. The main issue lies when it
captures only 55% of total cost in in-house billing.
The other multiple factors directly impact the billing cost which are often overlooked and are
considered as tradeoff between outsourcing billing services vs in-house billing services.
Almost 45% margin for error doesn’t make the best odds for sound decision making and most
importantly, it can overwhelm and destroy the others as well.
Factors that Impact the Ultimate Decision:
This discussion is framed around a typical three healthcare professionals practice whose revenue
payments $1,000,000 annually with two in-house billers are each earning $25,000 per year along with
average employment longevity of two years. Other expense ratio seems very typical for this size
practice and billing operation. Cost percentages convey the percentage of total billing cost.
The first cost, includes the wages for the hired billing staff, which in reality comprises 55% of
the total cost of an in-house billing operation or service. For the matter of fact, these costs
should include the payroll of all individuals involved in the billing and reimbursement process,
including payroll taxes and other employer-paid amounts.
These so-called hidden costs or expenses are that many healthcare practices overlook while
conducting any analysis. These are listed in descending order of financial impact.
About 15% of the technology cost includes billing-related practice management, billing and EHR
system software licensing fees, the portion of upgrades, support, annual maintenance, interfaces
etc. which pertains to the medical billing function.
It’s crucial to make a note of cloud billing technology that has unified; all-in-one medical office
automation platform provides the greatest probability of delivering competitive in-house billing
performance.
Almost 14% of employee benefits that include vacation, health insurance, retirement plans, social
security, unemployment and other benefits reach and equalize the level of 20 to 30% of salary and
total wage.
Infrastructure for internal billing staff incurs cost included in the general overhead of the
healthcare professional’s practice. This space also represents a potential opportunity cost where it
has to be converted to revenue producing space like an added exam or treatment room. About 3% of
space is occupied related to the above.
Outsourcing billing services make it very simple dealing with almost every expensive benefits and
leaves the practice tension free.
However, as known medical coding and billing updates are happening every year and healthcare
professionals alone cannot handle it. Hired billing staff must constantly stay concentrated and stay
ahead of the curve in order to maintain seamless revenue payments. 3% is invested in training
programs including government regulations and incentive programs, coding and technology updates and
changes.
To the matter of fact, outsourcing billing companies aren’t very perfect at revenue reimbursements
either. But ,they are experts in using best tools and technologies to deliver high ratios of profits
combined with reasonable fees, and provide attractive total cost alternative to attempting to
replicate the same level of excellence like in healthcare professionals’ practice.
In-House billing vs Outsourcing Billing Services:
In-House Billing:
It clearly states advantages of the numerical comparison of total costs including the hidden cost
and errors in billing.
As a decision maker, in-house billing is committed to provide and focus on management for a
successful billing operation.
It can consistently support billing operations along with infrastructure on the hidden cost
especially when cloud billing platform is a part of unified and all-in-one medical office automation
platform.
Outsourcing Billing Services:
In outsourcing billing, fee structure fits into decided financial model between 4 to 8% of gross
collections.
Outsourcing billing is capable of utilizing cloud based billing platform with feasible integration
to current EHR systems.
It performs and keeps up strong accountability based partnership and collaborate constantly unlike
adversarial relationship.
Outsourcing billing companies can track records of flawless claims acceptance for any specialty and
perform 90% in overall collection process.
Hope you got the information on outsourcing billing. For further updates on healthcare, please
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