Inefficiency – If you’ve been watching your collections drop while the time to collect increases, you may have issues in your billing department. Outsourcing to a third-party billing service typically decreases the number of rejected claims and decreases the time it takes to receive payment from a payer.
Staff Turnover – Turnover is an issue in any industry but turnover in a provider’s billing department is especially damaging. Claim processing is the economic life blood of a practice and a new addition or replacement in the billing department will inevitably lead to slowdown in the processing of claims.
Tech Savvy – Keeping your billing in-house will require a continuing investment in practice management software. Add in training for your staff and the significance of this investment becomes clearer. If you don’t want to deal with software upgrades and occasional technical issues, outsourcing is probably a good choice.
Priorities – Many doctors are not strong on the business side of running a practice. They became doctors to help patients – not worry about the administrative/clerical side of the business. Outsourcing the billing process eliminates the hassle and frees doctors to concentrate on patients.
Cost – Outsourcing Costs Less than In-House
An article which appears in Physicians News Digest contains a cost analysis of outsourced billing vs. in-house billing, and concluded that outsourcing does in fact cost less.
“To help compare the costs of in-house billing versus outsourced billing, we’ve created a hypothetical, three-physician practice. To arrive at these numbers, we’ve used what we believe to be industry averages.
“Here are the characteristics of this practice: Three primary care physicians; Two medical billing specialists; 80 insurance claims filed per day (~20,000 per year); $125 billed per claim on average (~$2,500,000 per year); and, we assume that the billing service has a high collection rate on claims.”
The article contains a breakdown of costs and explanations as to how the figures in the chart above were obtained. The bottom line is this:
Outsourcing your billing to a company such as Cherry Lane Billing costs you less than in-house billing, giving you more time to concentrate upon your existing patients and more resources to dedicate to obtaining new patients.