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Weigh the Pros and Cons of Outsourced Billing

The Doctor's Office, June 5, 2008

Physicians and practice managers may sometimes feel like they are running after dimes and nickels. However, the cost of collecting those coins can quickly add up, especially if you do not have an efficient billing system, which is why some medical practices decide to outsource their billing.

Consider the following most common outsourcing pros and cons when making your decision:

The pros
Provides professional billing performance. The billing company creates core competencies, such as coding properly, meeting compliance standards, credentialing accurately, and applying necessary updates, to help the practice achieve its desired success, says Tim Anderson, owner of ACS, a billing and collections firm in Lafayette, LA.

Limits hiring and training. The benefit of hiring an experienced billing company is that it limits the amount of staff members needed to fulfill each task, says Owen Dahl, owner of Owen Dahl Consulting in New Orleans. Also, less training is required for staff members to learn new billing software or understand payer contracts.

Maintains consistent flow. The billing company can instill better relationships between payers and patients to ensure bills are paid. For example, staff members don't send billing information; they do not have to call insurance companies to ask questions about each patient's account or send out reminder letters to patients to pay their bill.

Lessens the need for technology upgrades. The practice avoids the hassle of installing new software systems that may be costly and time-consuming.

The cons
Allows less control. You no longer have direct access to your patients' or payers' billing accounts, says Donna Lupinski, billing manager at Physicians to Women in Stuart, FL.

You cannot see the statements before they go out to the patient, you cannot call or talk to them directly about the problem, and you cannot conduct a random audit to check on overall productivity. Also, there is no way to know whether the billing company is adequately processing, following up, and fully adjudicating patient claims, Dahl adds.

Limits access to data. You may not have full disclosure of all your patient collections or the ability to review billing reports. There isn't always electronic access to these files. The practice may not have a suitable billing contract from the company that details the specific billing services they will provide, Anderson says. For example, if a payer agrees to reimburse your practice 120% of Medicare, be sure the contract specifies the dollar amount.

Lacks solid partnership. The practice does not have the opportunity to develop a peer-to-peer relationship with the billing company the same way it would internally, Dahl says, making it harder to call and ask about a patient's bill or a denied claim.


Shannon Sousa is the editor of The Doctor's Office. She may be reached at Ssousa@hcpro.com. This story was adapted from one that first appeared in the June edition of The Doctor's Office, a publication by HealthLeaders Media.