The Pro’s and Con’s of Outsourcing the Billing Function
Making a decision to outsource your billing vs. do it in-house requires a clear understanding of the entire billing function itself before you can make a choice. Businesses have many challenges and knowing that the services you provide are charged and managed correctly is paramount. Whether you are dealing with various insurances, direct access patients, homecare, nursing homes, providing cash based programs or other similar types of billing, you need assurance that you are doing it right and in compliance with established guidelines.
What makes it difficult to make the choice is how much you know about the billing process. If you do not understand the billing process then it is difficult to hire someone to do your billing in-house or to outsource because you won’t have the skills or knowhow of what to expect or how to hold either accountable. It’s easy to find someone or a company to talk the talk but how do you know if they can walk the walk.
Hiring a competent business management consultant who is intimately familiar with physical therapy operations will help you to make informed decisions that will fit your style. The more informed you are the better decisions you will make. Many private practice owners need assistance in running the business side of the practice and that includes understanding billing and collection policies and procedures – and there is a lot to know! A consultant can help you set up efficient billing and collections processes in-house or help you choose and appropriate billing company for your practice. This is a very important decision.
The “entire” billing process includes but is not limited to:
- Collecting at time of service from patients with no insurance
- Checking benefits prior to the patient coming in for treatment
- Checking for a referral or authorization
- Collecting co-pays at time of service from patients with a co-pay responsibility
- Entering charges for the services provided by the therapist
- Insuring claims are sent timely and that they are received
- Insuring all rules of compliance are followed
- Posting payments and making contractual adjustments
- Balance billing to patients or a secondary or tertiary insurance
- Follow-up on daily denials
- Follow-up on claims not paid – managing the Accounts Receivable (A/R)
The billing process ends when the claims are paid!
Based on the assumption you have the best business practices in place and/or that you have done adequate homework in choosing a competent billing company let’s take a look at some of the positive things that each choice offers:
In-house billing – You control the day to day operation
- You know who is responsible for the processes
- You know if you charges are being entered daily and billed out the same dayYou know if your reimbursements are accurate
- You know if your payments are being posted daily
- You know if your staff is processing denials and/or following up on unpaid claims
- You know where your A/R stands at any moment
- You know where your business stands through reports and staff input
- You are able to set standards and hold your staff accountable
- You have cross-trained staff and have an excellent in-house training program
- You insure total compliance according to insurance guidelines
- You pay associated payroll and benefits for the billing staff
- You consistently hire and train when staff leaves
Outsourcing billing – You leave the billing process to a professional service company
- You hire a professional billing company with the experience to manage the billing and collection process
- They have proven experience in physical therapy billing
- You have less staff to pay, train and manage
- You save on the hiring process
- You have no loss of productivity for training new billing staff
- You do not have to pay for a billing system (although you could and have the billing company bill through your program if that option is available)
- You pay a monthly fee
The major complaints of doing in-house billing include time to manage the staff, the cost of the staff – payroll and benefits, not knowing how to hiring the right staff, lack of proper training, out of control A/R, lack of time for meetings, and not being sure that your staff is consistently up to date on changes and compliance issues in the industry.
Here are some suggestions for doing your billing in-house:
- Learn the entire process
- Put billing and collection policies and procedures in place to insure accountability
- Learn how to hire the most appropriate staff for the job
- Have a comprehensive training and development program in place
- Create billing and collection handbooks and make sure they are consistently updated with current insurance and reimbursement information
- Hold weekly staff meetings to insure there are no major issues that will delay the billing process (computer problems, electronic billing issues etc.)
- Bill out your charges and post your payments daily
- Review month end stats with the biller so you can understand and identity any pitfalls
- Insure that staff is collecting from patients at time of service
- Insure that statements are sent at least monthly to all patients with balances
- Insure that collections are consistently done beginning at 30 days
The major complaints of outsourcing your billing include unreliable companies, not knowing if billing and posting payments are done daily, no reconciliation processes, lack of communication, not knowing where your money is- out of control A/R, not getting outcome reports that allow you to run your business effectively and little to no feedback from the company.
Here are some suggestions for outsourcing your billing:
- Choose a billing company that can give you some physical therapy billing references
- Check references – ask about outcomes of the services
- Ask about the system they use for PT billing (you do not want your billing done on a physician billing system)
- Ask for a sample of reports they will be giving you
- Look for a company that will offer you options:
- You own the system and they will bill remotely or come in to your site
- They will train your staff on your system to enter demographics and do the referral management
- Billing company owns the system and will train your staff to insure the flow of information they need to do the job is obtained
- They will help you move from in-house billing to their company or move you from your current billing company to their company
- They will consistently schedule month end meetings to explain and review reports
- They give you the tools to hold THEM accountable to you
- They can assure you that no accounts will be written off without your consent
- They will train your current and new staff to insure they get the information they need to do the job
Whether you do billing in-house or outsource, here are some tips for holding both accountable:
- Know how to check the system to insure billing is consistently up to date
- Know how to check to insure payments are posted as they are received
- Insure that all charges and payments have a reconciliation process and that process is always followed
- Ask questions????
- Know how to interpret your A/R – check the changes, understand why the A/R is going up or down
- Do Not listen to excuses – get results
- Consistently check the denials – why are you getting them?
Regardless of which way you go you must have highly efficient systems in place to insure that you are paid for the services you provide, you are compliant and you always know where your business stands financially. Take the time to learn what tools will help you the most. Don’t rely on others to run your business unless you have the tools in place to insure accountability and reduce your liability. Use the best resources to help you make your decision.
Diane McCutcheon, President
DM Business Management Consulting Services, Inc.
Account Matters – Billing & Collection Services
4 Charlesview Road, Suite 4
Hopedale, MA 01747
P: 508-422-0231 F: 508-422-0234