The topic of outsourcing the billing of a chiropractic office generates much controversy in chiropractic circles. Although there is no right answer for everyone, let’s take a look at the problem in detail to find the best answer that might suit you.
The question of control
Chiropractors who are big fans of keeping billing in-house often cite “control” as a factor in why they favor in-billing. Although it can Appear that you have more control over your billing by having an employee working in your office handling your claims, your employee may have too much control.
That is, they can get to know the patients and let past due bills go by. They may not like certain tasks (calling lawyers, for example) and choose to ignore them. One of the biggest negatives of internal control is the fact that when the biller is sick, goes on vacation, or isn’t doing a stellar job, he has effectively controlled your ability to get paid. “Control” is not always a good thing.
Are employees more sensitive to patient concerns?
Another common reason I hear in defense of internal billing is that they want to be more “responsive” to patient concerns. Yes, it is true that an outsourced biller who is paid a percentage of the charges may not really care if Mrs. Jones can actually pay her copays, mainly because the biller does not know the patient. Billers want to get paid, period. And when Mr. Smith’s claims go directly to the deductible, again, the billing agency wants to get paid.
Again, look at the bottom line before concluding that you need this sensitivity from your billing department. In general, these are the exact kinds of situations that will land you in long-term accounts receivable problems and are easy temptations for the internal biller who wants to be liked. Down the road, small incidents that your internal billing clerk has let slip will cost you money.
Still on the fence? More reasons to outsource!
Given the requirements of today’s billing processes, it takes the specialized skill of a medical billing professional to be successful and compliant. Billing should not be something someone does to fill the time between scheduling patients and getting their records.
A decade and a half ago, billing was much easier. Payers changed the rules once a year and reported practices early enough for them to adjust their processes. Denials averaged less than five percent of total claims. Today, it’s not unusual to have a claim denial rate of 30 percent or more, requiring extensive follow-up.
The challenges that internal billing operations face on a regular basis can lead to collection shortfalls or defaults.
Here are a few more reasons why outsourcing to a billing company makes sense:
o Regulations are constantly changing, which means dedicated staff must be assigned to read newsletters, interact with payers, and attend industry seminars.
o In large organizations, Billing and Coding are separate departments. Most chiropractic offices do not have the resources to dedicate staff who are responsible for ensuring documentation and coding comply with federal regulations and must also be certified by one of the accredited organizations. Outsourcing can allow you to achieve this.
o Implementing and maintaining a compliance plan can be costly for an individual practice; With a professional billing company, the cost of a compliance plan and compliance officer can be spread over many clients.
o Technology is a huge cost center for an individual practice. For example, in addition to the initial purchase price of payment tracking software to ensure correct payment according to the applicable fee schedule, there is the ongoing cost of maintaining accurate payment tables. Denial management tools are also necessary to track down and eliminate the root cause of why the denials occur in the first place.
o Lack of follow up related to unpaid claims is the biggest issue I encounter when consulting with most chiropractic clients. Monitoring is onerous and time consuming. Because it seems to be the last thing people do, it leads to lost revenue due to the “timely filing” requirements of the various payers.
o It is becoming increasingly difficult to attract and retain competent billing staff. The Society of Human Resource Management states that the cost to recruit, hire and train a new employee is $3,500. Using a professional billing company eliminates this expense entirely.
o Professional billing firms offer economies of scale, making their services less expensive than if a practice tries to run its own in-house operation.
When Outsourcing Doesn’t Make Sense
Like I said at the beginning, I think outsourcing makes sense most of the time, but not all of the time. In general, outsourcing may not be the best option from a financial perspective if your chiropractic practice falls into one of two extremes.
For small practices that have very few patients or for practices that are mostly cash-based, outsourcing can seem expensive and time consuming instead of doing it yourself or in-house. Take care here to ensure that you or your employee know what they are doing before reaching this conclusion.
The other extreme is very broad practices. The typical percentage that an outside billing company may want as a fee for their service may not make financial sense if the practice has qualified employees who can be highly compensated to do billing full-time.
Again, be careful here not to try to save too much. Sure, you can probably spend less on your employee’s salary than you would with an outside billing company. However, remember the issue of follow-up. Will your staff be able to handle it? If not, the extra money is worth it.
KEEP YOUR GOALS IN MIND
When looking at the big picture, it is important to keep in mind the end goal.
For most, the goal of any chiropractic billing company is to maximize collections and ensure compliance. With the plethora of regulations now affecting billing and collection, practices need full-time professionals to handle their billing.
Today, most chiropractors work harder than ever and earn less due to additional regulations and declining reimbursements. The question they should be asking is, “Why should I have the added burden of running a billing operation?”
As you can see, there are many good reasons to outsource your chiropractic billing, and the scales probably tip in favor of outsourcing. Either way, now you can make an informed decision!