By Bill Cockrell

Having been involved in medical practice management for almost 40 years, I’ve seen the move from the old pegboard financial tracking system to today’s computerized patient account management systems. To attempt to manage the patient accounting and insurance claims systems of today’s world by paper would be a monumental task that would prove costly from both indirect and direct cost standpoints. The move to the electronic world of patient accounts management has opened the door to in-house or outsourced (full or partial) billing departments. 

The decision to outsource the billing functions of a medical practice should be made only after carefully considering all the needs of the practice and the capabilities of any independent billing organization. It’s not for all medical practices and is affected in large part by the complexity of the practice in question. If a practice is going to consider this step, here are some considerations:

1. How does a practice keep from “losing control” of its billing department? In considering outsourcing a practice should be sure that billing service has a convenient contact who can answer detailed questions and who is empowered to find solutions to problems. The practice should never feel that it has lost control of this function. The outside provider must offer services according to the guidelines of a practice.
2. How will a practice know how well the outsourced service is performing? The servicing company should provide you with detailed reports on an ongoing basis as needed and should also review reports and results in a face-to-face manner. That might include in person (preferred) or remote video contact.
3. How is staffing handled? If a practice has an internal billing department, what happens to the staff? Will the billing company hire them, taking their cost and related benefits and H/R issues of the hands of the practice, or will the practice be responsible for transferring or outplacing staff?
4. Where will the billing staff work? In today’s world remote work is feasible and cost-effective. However, that means there needs to be appropriate network security in place. In addition, when patients call with questions, can they have ready access to individuals who will communicate with them clearly and accurately?
5. What services will be provided by the billing company and what services might be maintained internally? It is easy for an outside provide to handle claims filing and payment posting. However, who will enter charge, pre-certify testing and answer the phone when patients call with questions?
6. What billing system will be used? Does the third party have a separate system that must be interfaced with or are the able to access, and understand, the practice’s billing system?
7. What are the follow-up services provided? It is easy to take electronic remittances and automatically post payments. However, doing that without a careful review of payment rejections might lead to unnecessary write offs of collectible money. In addition, feedback to the practice of why a payment is rejected so the practice can take corrective action, is critical to the success of any patient accounting process. Indeed, through economies of scale, an outside billing service may be able to provide high quality coders, billers and follow-up staff that exceeds the capabilities of an in-house department.

Outsourced billing can be of great value to a practice by improving processes and saving staffing costs. The questions above are just some of the questions to be asked. Again, while work may be outsourced, the practice should never feel that it has lost control of this function.

Bill Cockrell is the Co-Founder and Chief Administrative Officer at Medical Billing and Consulting Services, LLC.