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.