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.
- 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.
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