Adam Alpers, DO

In my nearly 20 years of practicing medicine as both a healthcare provider and medical practice owner, medical billing has proven to be one of the most complex and crucial components of my business.

As the management of medical practices evolves with the introduction of new technologies, government requirements, and financial limitations, owner-practitioners constantly find themselves having to decide which operations methods will both save expenses and generate revenues. And of course, medical billing is one of those operations.

Regardless of whether you keep your billing operations in-house or outsource them, your first concern should be your professional medical coding practices. The overall effectiveness of your billing operations begins and ends with your billing and coding knowledge. If you fail to spend the 10 to 20 hours it takes to learn how to bill and code for profit, not much else matters.
That said, which of the two most common billing scenarios benefits the physician-practice owner most? Let's look at the options.

Depending on the size of your practice, the average in-house billing department consists of one or two trained billers per one to three providers. Payroll expenses aside, the start-up costs of an in-house billing department will include: equipment (like computers and software), registration with a clearinghouse, additional space for records storage, and reference materials such as annual coding books or courses.

At the outset an in-house billing team may seem like an administrative burden and increase in overhead, but the advantages to having your billers in-house may outweigh those factors.
For example, with an in-house billing department you have close watch of the pulse of your day-to-day billing operations. Questions can be addressed in real time, and changes can be implemented immediately. In-house billing also allows you to have more control over your accounts receivable.

I’ve often seen billing companies fail to pursue an outstanding balance because there isn’t enough money in the collection process for it to be worth their effort. However, if you have hundreds of patients with outstanding balances of a low dollar amount that's money you want to capture. You can avoid this issue when your billing staff is in-house.

Outsourced billing is typically a good fit for practice-owners who don’t want to manage an administrative team. All of the day-to-day billing functions are handled off-site when your billing functions are outsourced, and a reputable medical billing company should have a team of well-trained certified billers versed in the nuances of billing and sending claims.

In some cases, large medical billing companies are the best option for smaller practices simply because some specialized medical billing tools and technologies are cost prohibitive.
Although outsourced billing companies enable practice owners to be less concerned with the claims process and records retention, problems arise out of the fact that these billers are removed from the day-to-day operations of your practice. As a result, claims are often submitted incorrectly and coding is billed incorrectly, which ultimately hurts your bottom line.

From the cost savings perspective, remember that the savings you may gain from outsourced billing functions is offset at some level by the fees charged by the outsourcing company. The average cost by a medical billing firm ranges from 5 percent to 10 percent of your practice’s collections.

Be sure to evaluate the percentage you are paying and see if it is comparable to the cost of an in-house billing department. Also, always negotiate for a lower collection percentage as your volume of collections increases. There is a lot of flexibility in this industry and these small contractual modifications could have a significant impact on your personal revenue.
I’ve found the most important factor in deciding between in-house or outsourced billing to be that of your management style. If you like to have your hands in the heart of your practice in-house billing is probably the best option for you. And if you prefer outsourcing, be sure you can gain access to the information you will need to make quality decisions that affect the profitability of your medical practice. 

Adam Alpers, DO, is a family-practice physician in private practice in Ocala, Fla. A medical coding expert, Alpers also helps other physicians learn how to maximize their insurance reimbursements and writes heavily on the subject at his blog 

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I’ve found the most important factor in deciding between in-house or outsourced billing to be that of your management style. 

In-House vs. Outsourced Billing Operations: Which Is Best?

As reimbursements continue to decline year after year, physicians are working harder and more hours only to maintain the level of compensation that they received 10 years prior. Some of my colleagues relate that they have to see three or four more patients a day to just keep up the same level of income that they had years ago.

Realizing that there are only a limited number of hours in the day that one can reasonably work, it is becoming more apparent that trading time for dollars is not the key. Duplication of your effort is much more beneficial and that is where 

First, you must identify whether or not your practice is a good fit for ancillary services. When considering ancillary services, consider what you know and what you are willing to learn. If you have a passion for a certain procedure or service there are many training courses that you can attend to become proficient in performing those. Once you feel competent, you are on your way to providing those services to your patient. The key to making these ancillary services profitable, however, is to have a provider performing those procedures in your office so that you free yourself up from having to personally do all the work.

Take for example physical therapy services. Perform an in-house tracking on all the referrals you are sending out and you can then quantify the amount of those therapy referrals. If you determine that your practice is sending out tons of referrals to physical therapy, then it may be prudent to have that process in your office. Hiring a physical therapist and setting up the service will require a little space and an extra payroll, but the financial rewards can be significant.

When getting started, ask yourself: What do I like and what will I feel comfortable performing in my practice? Do I refer a particular service regularly or is it hard for me to refer to that service?

If you are naturally thinking and consistently sending out that service, then it will probably be easy for you to have the “keep it in the family” mindset. Some services are relatively easy. The key is to make sure you are tracking the service and keeping a log so you can be sure you are generating revenue for that service.

Other services that are on a larger scale may require a service to come to your office and perform the test. Be sure you are aware of the rules and regulations that are particular to your state, as the billing will be different depending upon whether you can bill globally for the procedure or will have to separate the technical from the professional component with regards to the billing. Some services require the presence of a physician or midlevel such as a nurse practitioner or physician’s assistant during the procedure, as is the case in diagnostic cardiac testing, while others require only an allied health professional, such as a therapist.

Carefully considering these factors will ensure you find the best fit for your medical practice.

Financially, the requirements vary from service to service. If you are providing a lab test in your office, the costs are very small in scope and can become larger as the number of tests you perform increase. The good news is that as you continue to bill for those services. As the revenue comes in, the profits can be used to purchase more tests and so on.

On the other hand if you are considering the purchase a large piece of equipment, such as a CT scanner, then you will need to think about the space required as well as the room requirements, power needs, electronics, and building code requirements, to name a few. Make sure you research financing in-depth, and closely review the terms of leases. Be sure you are shopping around when you are thinking about large purchases as the marketplace is very competitive and you can get a great deal with a little negotiation.

In addition, make sure you are aware of the insurance reimbursement requirements for a particular piece of machinery. The rules and regulations are changing and that “great deal” may not be so great if you can’t charge for that scan and insurance is not willing to give you authorization on your machine, or it is too outdated for the number of slices that are required to be in current regulations.

Be aware of the technological changes coming down the pipe. Make sure that your 

 in them that takes into account these potential changes so that you may be able to get an upgrade for minimal cost. This precaution alone can save you tens of thousands of dollars in the future.

In the third part of this miniseries, I'll show you how to make sure all of your providers are on board to really make a boost in your bottom line.

Realizing that there are only a limited number of hours in the day that one can reasonably work, it is becoming more apparent that trading time for dollars is not the key. Duplication of your effort is much more beneficial and that is where ancillary services come in to play.

How to Use Ancillaries to Increase Revenues, Part 2

It’s no secret that it is becoming more and more difficult to make a reasonable profit practicing medicine these days. Although the primary purpose of our profession is to help heal and maintain the health of our patients, we are still business owners with salaries, taxes, and operating expenses to pay. This often means that we have to find ways to generate additional revenue, which raises the question, “Will offering 

 improve the profits in my practice?” 

They very well could. First, let’s define ancillary services.

Ancillary services are supplemental services which may include radiology, physical therapy, laboratory, and pulmonary services. They usually fall into three broad categories: diagnostic, therapeutic, and custodial. These services can be offered inside your practice as an add-on the day-to-day services that you already provide.

For example, if you send your patient out for a service such as physical therapy or an X-ray, then you are using an ancillary service. However, if you were to implement such service into your practice instead of sending the patient elsewhere, then you can capture the revenue for that service and create a convenience for the patient.

The key is to know how to properly code these ancillary services so that you obtain your full potential reimbursement for providing the service.

If you are already ordering a test for a patient, and your staff has to spend the time to refer the patient out to someone, then why not keep the patient right inside your practice? This enables you to duplicate your effort, as you have done the work once but now you get to reap the benefits twice. When you begin to use ancillary services in your practice, an in-house practitioner does the work, and you get to bill for it. Now, your patient is benefiting from the therapy or service right in your office.

The first issue to address is whether or not the services you provide would support in-house ancillary services. Then you must determine which ancillary services you feel comfortable providing. The choices are essentially yours. Below is a partial list of ancillary services which you should consider depending upon your practice and your personal philosophy and desires:

1. Therapy, such as physical, occupational, and speech
2. Pulmonary function testing
3. Weight management
4. Education classes, such as those on diabetes, nutrition, and fitness
5. Durable medical equipment
6. Infusion therapy
7. Radiology, such as X-rays and CT scans
8. Stress testing
9. Ultrasounds
10. In-house labs
11. Sleep studies
12. Trigger point injections
13. Facet injections

Once you have decided on which services you would like to offer, then you must determine whether your practice is a good fit for the ancillary services you’ve selected. Stayed tuned for Part 2 for more on the decision making process of adding ancillary services to your medical practice.



Although the primary purpose of our profession is to help heal and maintain the health of our patients, we are still business owners with salaries, taxes, and operating expenses to pay. This often means that we have to find ways to generate additional revenue, which raises the question, “Will offering ancillary services improve the profits in my practice?” They very well could.

Author | Adam Alpers, DO

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