Hourly Medical Billing Employees Are Not Your Best Option

The choice to outsource your medical billing can yield substantially better results than the choice to keep billing in-house. Why? Because a properly structured outsourced billing relationship insures that the medical billing company succeeds by making you succeed.nnThe 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.nnThis issue, however, is often not fully understood or appreciated by many providers. These providers frequently say: \”the staff works directly for me in my office– they are more loyal and will do a better job and I can see what they are doing\”. Experience has shown, however, that this is often not true. nnIn a conversation I had recently with a busy cardiologist I heard a story that is not unusual. One of the office\’s medical billers called in sick. Some information was needed while she was out so the office manager went looking through her desk. She did not find the information she needed, but she did find over $40,000 worth of claims that had not been billed and had gone beyond the timely filing deadline. That is right, $40,000 worth of claims that could not be billed and for which no money would ever be realized. Upon the billers return she was \”sternly reprimanded for this egregious error. Not fired, but reprimanded for costing the practices tens of thousands of dollars. There is no alignment of incentives present in a situation like this.nnThis 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.nnThere should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice\’s system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice\’s medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.nnUtilizing a medical billing service that meets the following criteria can help you avoid a medical billing horror story like the one above:nn- A fully integrated tracking system (charges by locations/provider and payments by source – lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.nn- Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company\’s control. What this means is that you never suffer financially if the billing company drops the ball. Try to have your billers reimburse you if they drop the ball.nn- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.nnPhysicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.nnWithout properly aligning the incentives (both upside and downside consequences) of in-house medical billers, you can rest assured that history will likely repeat itself and the biller that lost $40,000 in charges is unlikely to excel at demographic collections. nnSelecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.nnCopyright 2008 by Carl Mays II