Murky waters of out-sourced medical billing
As a continuation of the previous article, this article will explore the pros and cons of outsourced medical billing for your office vs.. inhouse medical biling. At first I was planning to just write this section in bullet points. But that would not have done this topic a justice. This is one of the longer posts I have written but is well worth the read.
I personally am in favor of keeping the medical billing inhouse, after a bad experience with a medical billing company. The medical billing company virtually drove my practice near to bankruptcy, by not trying to collect what they should have and by using untrained staff to process the medical billing. Once they stopped responding to our enquiries, we had no choice but to start inhouse medical billing. That was a good thing to do.
Before deciding to outsource the medical billing process, one should understand the dynamic nature of medical billing. Medical billing is not as simple as putting your bills in and getting the cash out. It is a process which will take you and your staff almost an year to learn. Why? Because once you file a charge, the turn around time is about one month to three months. Then you will have to review the rejected bills and refile after making some changes. The refiled claim will take another three months to process. Repeat this process for every mistake your billing office makes and one year will pass like a breeze. Funny thing is that it does not end here. Medicare and other insurance companies change policies and procedures frequently. So what is the right way to file charges today may not work tomorrow. On top of it, include technical components such as software errors or mismatch, and you can’t help grinding your teeth into powder.
Historically the businessmen have taken advantage of physicians who are not so savvy about business practices. So they (businessmen) saw this complicated procedure a great opportunity to exploit. They offered physicians an easy way out. Why don’t they take the headache of medical billing process, and doctors don’t have to pay them until they collect. Why would they not collect aggressively for the doctors? If they collect more, they make more! Its a win win situation. Sounds simple and easy.
IT IS NOT THAT SIMPLE ! This is a sales pitch. To understand the process better, let me classify medical billing into two unconventional categories:
1) The Straightforward medical charges: Lets define this term referring to those medical charges , which when entered into the computer even by a moron, will still get paid. There is no ‘trick’ / ’special process’ like adding a modifier etc. to it. This is the easiest of all medical billing and almost always get paid.
2) The Complex medical charges: This term will refer to those medical charges, which involve special process such as using the right code with right modifier, changing the ICD 9 to a more relevant but similar diagnosis etc. These kind of medical charges can be properly handled only by someone who has a thorough knowledge of medical billing. It is the most labor intensive, time consuming part of medical billing.
Now using the above unconventional classification lets open a shady medical billing company. Lets call it ‘Medical Billing Company’ (MBC). MBC had two accounts i.e. two medical practices, when the company first started. MBC did a good job at it and built its reputation. Now MBC has over a hundred accounts. MBC is busy making money but needs more staff. Good Medical billers are hard to find. Since MBC outsources its billing to another country, it is even harder to find trained medical billers. So MBC hires untrained staff to just enter all the charges into the computer.
This way MBC is processing only the ’straightforward medical charges’ successfully. It is avoiding the labor intensive, costly and hard work of collecting the ‘complex medical charges’. Doctors think MBC is losing money by not collecting these charges. But that is not the case. By employing untrained staff, MBC is saving money. Also it is saving labor as it does not have to spend too much time into the billing process. To boost its profits MBC now takes over 1000 medical practices, and just tries to get whatever they can without spending time on the complex billing process. Its working good for our shady Medical billing company. This kind of fraud is called “Skimming”.
But doctors like us are suffering. In my experience ’straightforward medical charges’ make only 1/4 to 1/5 of our collection. So the doctors who contracted with MBC now are losing 3/4 th of their income month after month. But they are stuck in the contract because MBC has got them in their hands by leaving no exit strategy in the contract for next year or two.
This hypothetical operation hopefully enlightens you about the pitfalls of outsourcing the medical billing. Probably there are good medical billing companies . But there are plenty of them like our MBC.
If you have had a bad experience with a medical billing company, feel free to email me or leave your comments on this post. You can help save other physicians from getting into trouble.
7 Responses to “Murky waters of out-sourced medical billing”
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Applause to this article! I think this is the best article! I will tell you why. After I read your post, this is the word come out of my mouth. "EXACTLY" yes, that is what exactly they did to me. I had similar problem and I had to pay them for three months fee extra to get out of the their contract. We as a physician need to unite to tell each other’s problem. I appreciate you "SSG" for this website.
I have to say I agree that there are several companies out there that do that,however in a medical billers defense I have to say that not all are like that. I am a Certified Professional Coder and have been in the medical billing industry for over 11 years. I worked for a medical billing company that did just that the skimming. When I first started with them there was only 5 of us and then when I left there was over 65 of us. This is the reason I left is because I was not able to do my job that way it needed to be done. I got the courage to start my own medical billing company. When I started developing my business plan that was one of my biggest pet peves was how can I assure a Physician that his/her accounts were going to be given top priority and I decided that I will not just hire any joe, they must be Certified Coders and that person will never have over two physicians that they are in charge of. I included this in my contract that each physician signs. I go by the core principles that I was raised with and that is to Treat others the way you want to be treated.
Tanya,
If you are doing that, please keep it up as we physicians do need such a service. I have heard of a large practice go bankrupt because of poor handling by an outsourced medical billing company.
How do you deal with a physician that owe you money and terminated the contract. Because she wanted a log of when the claims was mailed, the time I think it will get to the insurance and the date we are getting payment.
Medical billing companies are setup to make it easier for them to wade through the murky waters or regulation and insurance company code to ensure proper and timely reimbursement.
I think we have the same prob with an inhouse billing, since the biller was inexperienced and the person who hired the biller had total faith and didn’t watch the eob’s. When we were able to get into the billing it looked like things were not necessarily downcoded but the modifiers weren’t added, so we went from 60,000 mmothly to 15,000 monthly and I as a provider was blamed for slacking!! I saw as many pts as the other provider. So for us it was the opposite. Our outsourced wanted 10% and in the long run I think we had a good deal.
Medical Billing in the office has to be watched very carefully. EOBs should not only be reviewed by the medical billing staff but also by managers and even physicians from time to time. It may be confusing to read them at first but eventually you will get the hang of it and will allow you to quickly detect patterns and errors. Once discovered process changes need to be made to reduce these errors.
Whether outsourcing or doing in house medical billing, reviewing EOBs is a must.