Top 7 Advantages of In-House Medical Billing
We go over the top 7 reasons in-house medical billing may be best for your clinic or FQHC. Noteworthy is that the author ran a very successful India-based outsourced billing company and a Philippines-based outsourced medical staffing company before and throughout COVID before joining PCG Software in November 2022. While outsourcing is a Godsend for many clinics, the risks and costs may be more controllable through in-house medical billing.
Increased Medical Billing Control
Handling medical billing in-house allows you to have more control over the process and ensure that it is done accurately and efficiently. When using an outsourced billing company, you have to rely on their internal HR structure and training to ensure that every claim is performed the way you wish it to be processed, addressed, and how to handle performance-related evaluations and improvements.
Increased Privacy
In-house medical billing allows you to keep patient information more secure, as the data is not being shared with an external company. If you haven’t already you should have created an employee agreement and administered HIPAA-related training and certificates to your internal employees. If you consider outsourcing your billing, it is becoming more and more common for billing companies to administer HIPAA compliance in-house as third-party HIPAA compliance companies are expensive. If that outsourced company does participate in this type of external review, it is likely their fees are higher than the industry average as they should be, but this cuts into the profit margins you expect and may rival that of hiring a local medical biller who works internally. Many times, outsourced billing companies that reside overseas will utilize a team of personnel and may not always notify you of who’s working on what claims and/or what portion of your patient claims.
Reduced Error Rate with New Hires
By handling billing in-house, you can reduce the risk of errors that can occur when information is transferred between multiple parties. Why is this? Offshore billing companies do not always hire medical billers, but rather graduates of healthcare degrees or accounting degrees followed by 2-6 weeks of training in medical billing and medical electronic medical records and electronic health records software. This means you can never really know the extent of your medical biller’s knowledge prior to hiring their firm. While their leaders are very experienced offshore, their new hires are the ones doing the work for you. Now, some offshore companies are great! However, if you could find a local biller who knew the eligibility requirements, benefits, and processes of that local IPA or health plan, they’ll have far fewer errors during the first 90-120 days of hire.
Faster Profit Generation
There is no debate on what's cheaper for the hourly wage, but that's not a full discussion of continued profitability.
Outsourcing medical billing is ideal for clinics or FQHCs that need 3 or more medical billers, we’ll explain. If you are making $150,000 per month, that’s $1.8 million per year. If the outsourced billing company has a 5.0% collection rate fee, that’s $7,500 per month and approximately $90,000 per year. However, as your collections increase the outsourced billing company will earn more each month, and you’ll retain your margin, but they get their profit growth before your clinic. Shouldn’t it be the other way around? A Medical Biller in most states will make $25.00 per hour, that’s roughly $4,200 per month, with an additional 20% of salary for benefits, that’s $5,040 per month or $60,480 per year. If you run a smaller or medium-sized clinic, you could save $25,000 or more per year, until you have to hire a second biller. The point of increased profitability is when your practice needs 3 or more billers. Once you hit that threshold, the overall payroll costs favor outsourced billing.
Patient Satisfaction & Patient Collections
- In-house medical billing can help to improve relationships with patients, as you have more direct control over the billing process and can address any issues that may arise more quickly. The ideal billing department is there not just to process eligibility, benefits, authorizations, and claims but to answer phone calls from patients and explain EOBs. Many offshore companies have some of the following struggles that your in-house team will not:
- Local Knowledge: You get to interview your billers onsite and make sure they are a good fit culturally, understand the local payers, and understand the local culture. Offshore will likely struggle for an undisclosed amount of time, possibly forever.
- Language Barrier: After running a 1,700-employee billing and staffing company that had people in the Philippines, India, Dominican Republic, and Colombia, I can tell you that English fluency is a problem. However, even when you find a fluent English medical biller or coder, their knowledge of synonyms or local language and terms will take a long time to get accustomed to. A local in-house biller talk like your patients understands how they think, and can usually communicate answers faster.
- Turnover of Offshore Billers: India has a turnover rate average of 35-48% dependent upon the company (4), while the Philippines has a 40-50% turnover rate for their employees (5). Many employees get hired but keep their resumes online and are always in the market for a slightly higher salary. Job hopping is a very real thing in their culture.
Enhanced Data Security and HIPAA
In-house medical billing allows you to keep patient data within your organization, which can reduce the risk of data breaches and protect sensitive information. We’re hoping that you have all your employees go through HIPAA training every year, that you test them every year or other year on your EMR and EHR software… We’re hoping. At the very least you have the ability to do so. In 2020, there was a 51% increase in fraud due to the new COVID vaccine coding and billing guides, leaving patients and clinics vulnerable (5). We’re also hoping that your patient data is secured through your own servers… Great! However, is the connection of your outsourced billing via VPN and RDPs secure as well? Who has access to it? Who manages it? How quickly can they restrict all access for terminated or resigned employees? Who’s training on your systems and preparing for their next role to replace a resigned or terminated offshore employee? There are a lot of questions and a lot of trusts you’re putting on someone halfway around the world.
Medical Coding is Crucial for Approvals
Medical billers and medical coders are two different professions that work together in the healthcare industry to ensure that patients are accurately billed for the services that they receive. Medical coders are responsible for assigning appropriate codes to diagnoses, procedures, and equipment using a standardized coding system. These codes are used to accurately describe the healthcare services that were provided to a patient, and they are used to determine the amount that an insurance company will reimburse a healthcare provider for those services. Medical billers, on the other hand, are responsible for preparing and submitting claims to insurance companies for payment. They use the codes assigned by medical coders to create detailed invoices for the services that were provided to a patient. They may also be responsible for following up on unpaid claims, negotiating with insurance companies, and helping patients to understand their bills and any out-of-pocket costs. While medical coders and medical billers often work closely together, they have different responsibilities and skill sets within the healthcare billing process. When you’re hiring locally you can make the requirement for your billers to be certified medical coders. When you hire an outsourced billing company in India or the Philippines there is a very small chance they can give you a dedicated medical biller who has a medical coding background. Instead, they tend to hire less and use them across multiple clients at once. Are you okay with that?
Conclusion and Summary
Medical Billing is unique to your clinic or FQHC. Whether you hire internally or externally, just be aware of the risks of using an outside company. You can also read our next blog which discusses the benefits of outsourcing your billing as we wish to remain impartial and show you both sides of the medical billing coin. If you already have your solution and are looking to optimize your approval rates, contact PCG Software for a free demo of our iVECoder which can be utilized by both internal and external billing companies.
References:
(1) "Outsourced medical billing and coding error rates and their impact on healthcare providers." Journal of Healthcare Information Management, vol. 18, no. 3, 2004, pp. 44-50.
(2) "Outsourced medical billing: A cost-effective solution?" Healthcare Financial Management Association, 2002. Retrieved from: https://www.hfma.org/topics/hfm/2018/september/61776.html
(3) Latest Report: Statistics on the Philippines BPO Industry (2022). Retrieve from: https://www.magellan-solutions.com/blog/philippine-bpo-industry-statistics-2022/#:~:text=BPO%20Attrition%20Rate%20in%20the,30%20percent%20to%2040%20percent.
(4) JK Advisory (2021). Employee Turnover in the BPO Industry. Retrieved from: http://jkadvisory.us/blog/employee-turnover-in-the-bpo-industry/
(5) Partida, Devin. (March 24, 2021). Outsourcing Medical Coding and HIPAA: What to Know. Retrieved from:
https://www.healthitanswers.net/outsourcing-medical-coding-and-hipaa-what-to-know/
