Medical Billing Companies: FAQs to Know Before You Outsource
We put together a list of frequently asked questions you should know before looking at medical billing companies to outsource to.
A medical practice should exist to serve its patients. Medicine is about helping people when they’re sick and supporting them when they’re healthy.
But, a medical practice is also a business. It needs a consistent revenue cycle to function.
Unfortunately, the stress that comes along with the financial side of a clinic can have a negative effect on patient care.
The good news is, medical billing companies can help lessen the burden. The key is to ask the right questions to find the right company for your practice. Read on to learn what you should know before you outsource medical billing.
What is a Medical Billing Company?
A medical billing company is a third-party business that manages the entire billing process for a medical practice. These companies take the place of an in-house medical biller.
Billing companies submit claims to health insurance companies and follow up on claims to make sure the clinic gets paid. If there’s a problem with a claim, they will deal with secondary filing, denials, appeals, and exclusions.
If a patient has an unpaid bill, many billing companies will also send it to collections on behalf of the practice.
Private insurance companies, Medicare, and Medicaid constantly update their rules, regulations, and requirements. It can be a challenge to keep up with all the changes, but a billing company will stay up to date on policy changes for you.
How Much Will it Cost To Use a Medical Billing Company?
The cost for outsourcing your billing will depend on the needs of your practice, the billing company you choose, and any extra services you add on.
Every medical billing company will charge an administration fee. This is a set rate that you’ll be charged in order to use their services throughout the year. Companies will often charge somewhere in the $3500 to $6000 range for a year of service.
You may also need to hire another employee or promote a current staff member to deal with the billing company. This extra employee will add to your overall billing costs. But, this might not be necessary if your practice is small.
When you choose a billing company, you’ll have to sign a contract. You’ll probably want to get legal counsel for any contract negotiations. It’s important that you only sign a contract that has your practice’s best interest in mind.
Even with all of these costs combined, it will still be cheaper than creating an in-house billing team. When you outsource, you won’t need to pay a salary or benefits to your medical biller or buy additional computers and software.
How Do Billing Companies Charge for Their Services?
Beyond the yearly administration fees, many medical billers will also charge a start-up fee. This is a one-time charge when you first start using a billing company.
Start-up fees depend on the number of physicians at your practice. They are generally a few hundred dollars per physician, so it will cost more if you have a clinic with multiple practitioners.
Billing companies will also charge fees based on the number of patient claims they need to file for you. Many companies charge a percentage of the reimbursement for each claim, a flat rate per claim, or an hourly rate.
What Are the 3 Different Types of Billing Systems?
Medical billers will typically bill their clients (the medical practices) for each patient claim. There are three ways of billing: a percentage of each claim, a flat-fee per claim, or an hourly rate.
Many billing companies charge a percentage of the claim collection. Typically, rates are between 5 and 10% of collections. If you run a specialist practice, as opposed to general practice, you can expect to pay a higher percentage. Many companies charge a higher rate because the claims are usually more complicated for specialists.
Another method of billing is on a per-claim basis. This method will charge a few dollars per claim. This is a convenient method that can actually end up saving you money on more expensive claims since it’s a flat rate.
The least common billing system is an hourly rate. This method is best for smaller practices that see fewer patients. You’ll be charged a fee based on how much time it takes the billing company to process your claims.
Is There a Way to Monitor Your Medical Billing Company?
Being able to check on your billing process is essential when you outsource.
When you evaluate each medical billing company, look for companies that offer access to reports about your practice’s billing process and financial information.
Since efficient billing and revenue cycles keep your business up and running, you need to have easy access to this information.
Who Are the Best Medical Billing Companies?
When searching for the best billing companies, it’s important to look at their software features and details about their services. There is no one-size-fits-all for medical billing. It really depends on the needs of your practice and the size of your staff.
A helpful feature that many good billing companies offer is claims scrubbing. This service will look for billing mistakes and correct them before the claim is submitted to the insurer. It can prevent more claims from being denied and increase your revenue flow.
You should also evaluate each company’s contract length, service fees, and software to decide which company is best for you.
Find the Right Billing Service Company Today
Most doctors don’t decide to go into medicine because they love paperwork. In-house billing might sound easy to manage, but it can be difficult to keep up with the constant changes to insurance coverage.
Outsourcing your billing duties can really take a burden off your practice. You and your staff can focus on giving your patients the best care possible.
With all the medical billing companies out there, it can be difficult to know which one to choose. Use our tool to get a quote on medical billing services and compare up to 6 providers.
Author: Mike Cynar
Mike Cynar brings buyers and sellers together by producing reviews and creating non biased webpages allowing users to share their experiences on various products and services. He and his staff write informative articles related to the medical field, legal, and other small business industries.