Is the price right?

Outsourcing your billing certainly doesn’t come for free. Just like a CoinStar machine in the grocery store takes a cut from the loose change you dump in for automatic tallying, a billing service takes a percentage of your claims revenue — sometimes as much as 8 percent. Obviously, the more you earn the bigger the cut.

But Southeast New Mexico’s decision makers think it’s money well spent. “I don’t see it as an added expense. What they’re doing is worth it because we would’ve had to hire a lot more people and train them,” says Cottrell. This is a valid point. Compute what you would be making if all your claims are processed at maximum efficiency, and calculate 8 percent of that. Then ask yourself how this figure compares to the expense of keeping your billing in-house. These expenses can include:

Staffing — Good help doesn’t come cheap, and there’s no guarantee you’ll see a good return on your investment after you go through the time and expense to hire people. Billing manager Jonathan Fowler of Chapel Hill, N.C.-based Village Pediatrics says, “I’ve talked with providers who say they’d fired a biller and when they cleaned out the biller’s desk they found a box of unsubmitted encounters.” Yikes.

Technology — Eric Vitug, senior billing office manager for Sentara, a multispecialty practice in Southeastern Virginia, says that being properly outfitted technologically to handle billing is key. Will you need to purchase software? Who will provide ongoing technical support? “Having rock-solid IT support is critical to in-house billing,” says Vitug. “If someone doesn’t have that, or billing experience with electronic claims, then I can see why someone might [use a service].”

D-I-Y electronic billing

With billing software, you can go one of two ways: Have it installed on your office computers or access it on the Web from any computer. Vendors are increasingly touting Web-based solutions as their primary products. Tommie Lewis, vice president of marketing for Emdeon, says, “We provide the solution that works best for the provider’s work flow. Web-based seems to be the best way. The users are always on the latest rendition, so there are no version control or licensing problems. If we upgrade the software, they have it immediately, and they can work remotely.”

Vitug says that Sentara has been using PayerPath, a Web-based billing application, for nearly seven years — back when such technology was in its infancy. “We wanted to be online. We knew there was going to be lots going on with the Internet.”

PayerPath itself was a baby back then. In many ways, Sentara and PayerPath developed the billing application together, based on Sentara’s numerous needs. A 400-physician, 60-site, multispecialty behemoth, Sentara’s 119-employee billing department processes 6,000 to 8,000 claims a day, with last year’s total topping 1.5 million. Nevertheless, outstanding funds-in-A/R average only 27 days — a 67 percent improvement from a decade ago, before the practice teamed with PayerPath. Any claim still in A/R after 60 days gets shunted back to the central office for one-to-one treatment and follow-up.

Vitug prides himself on the performance of his in-house billing department, but he readily admits that PayerPath outshines his team in one area: “They’re the experts on what the payers want electronically. We pay for their knowledge and their edits so we can bump our claims up against them. If we didn’t have that and just sent the file out, we don’t know as much. Then we’d have to create our own unit here to watch out for all the rules and regulations — and they change every single day.”

That’s for sure. Take Medicare’s June announcement that providers should start including their NPI numbers on a small number of claims to test for acceptance. Did you know this? Make sure the vendor you choose has a firm grasp of such issues.

But possibly the most compelling reason for adopting in-house billing technology is the instant gratification factor, thoroughly trumping the long learning curve of a third-party service. Craig Bridge, chief operating officer for Navicure, which offers a Web-based billing product, says, “Within 30 days, [practices] are pretty much up and running. Within 90 days, the financial benefit starts.”

Benefits across the board

Regardless of which solution you choose, resolve to face and fix your billing problems. Family physician Yatin Shah of Illinois-based Primary Care Joliet says he’s glad his practice finally did just that in April 2006. Primary Care Joliet was already using a billing system, but the system was insufficient, leaving the practice awash in denials. Busy check-in staff collected copays but rarely verified insurance, opting instead to cash in on a practice incentive plan tied to copay collection. Coding mistakes committed by the back office further gummed up the reimbursement gears. But now, with the CareSeries Plus Web-based billing application and a fully integrated EMR, the check-in staff verifies insurance and collects copays regularly and the providers code with panache. The automated claims are super-double-checked before submission using a claims scrubber. Everybody’s happy.

Regardless of which approach you take, you can expect the following benefits with billing technology: