Outsourcing your medical billing to a billing service has the power to make your practice much easier to manage.  It can also increase your profitability. But as the world of reimbursement continues to evolve, it’s important to stay involved with the process.  If you’ve adopted a “that’s off my plate now” approach to using a medical billing service, it’s possible your service is too empowered.

A properly utilized medical billing service will be an extension of your team.  Your office staff must work well with them in order to maximize the benefit you gain from outsourcing.  When everything billing-related is dropped into the billing service’s lap, it’s impossible for them to do their best work for you.  And they may feel compelled to make decisions for you that they really shouldn’t be taking on unilaterally.

Here are a few examples we’ve seen over the past few years of billing services believing it was left up to them to make key decisions on behalf of practice clients — leading to sub-optimal decisions as a result:

  • A billing service for a primary care/infectious disease practice with predominantly older patients with multiple chronic conditions received documentation about the chronic care management (CCM) reimbursement opportunity from the CMS (i.e., code 99490).  But the billing service already had trouble getting properly prepared claims and sufficient documentation from providers, even for office visits. Plus, the practice manager was inexperienced with billing, and typically deflected the service’s questions with “you decide – that’s your job.” The service owner decided for the practice that pursuing CCM “wasn’t worthwhile.” She felt that the providers wouldn’t have been willing to do additional documentation. The physician owner was unaware that the practice was likely leaving at least $120,000 of revenue on the table in 2015 — revenue which could have helped the practice repair its difficult financial position;
  • A pediatric practice assumed its billing service would “handle” all payer contracts. The billing service thought “handling” them meant simply dealing with information requests from payers, and alerting the practice when something needed to be done — they certainly didn’t expect to be negotiating new contracts, since that was far outside their skill set.  With nobody monitoring contract renewal dates or requesting new contracts, auto-renewal kicked in — and no one realized that several of the contracts had evergreen provisions that kept the rates the same. Simply signing a new standard contract would have brought an automatic increase in the fee schedule, but no one thought to ask.  In the case of one important payer, the practice’s rates were about 35% less than the standard fee schedule in place for other pediatric practices in their market. That payer’s contract had been allowed to renew automatically at rates that were almost ten years old;
  • An OB/GYN practice staff was too intimidated to ask patients on high deductible plans to being paying for their maternity services at the start of their prenatal care, and many patients wound up surprised by bills of $1,000 or more after delivery. The billing service had suggested at least once to the practice manager (perhaps not too forcefully) that the staff needed to be trained to collect the maternity charges in installments, as patients came in for their regular prenatal visits. But the front desk collections didn’t improve. And, to make matters worse, the practice was on the slower side in signing charts and transmitting billing data to the service, so patients received their bills months after their babies were born. As the patient AR climbed, the billing service felt it had no choice but to send more patient accounts to collections — leading patients to leave the practice, bills unpaid. Some of the patients even posted negative reviews about the practice.

Every one of these situations was financially damaging for the practice — and preventable.  The billing services were worse off, too, because they could potentially have collected more, and then earned a greater commission.  But the lack of communication and teamwork between the billing services and these practices made it impossible for the service to do as good a job as they wanted to.

The billing world is changing in some important ways.  Patients are expected to pay for more of their care directly — more of that money should be collected by your front desk, not your billing service, to improve the chances it is collected at all and avoid the expense of collecting via statements. Models like CCM and PCMH are just the beginning of a trend towards reimbursement models that require more documentation and more staff involvement than straight fee-for-service.  With these new challenges and the need to change to accommodate them, your billing service can’t be expected to handle the entire responsibility for your revenue on their own.  The most effective managers bring their billing service into their practice team, so that everyone plays their role in the practice business and problems can be solved efficiently.

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