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The billing conundrum


The decision of whether to keep billing in-house or outsource is not always about cost. It’s about the value realized for the expense and the risk of not getting it right.

I am working with two physicians who are leaving a large group because they are dissatisfied with the back-office operations and billing situation. Years ago, they had their own practice and did everything in-house. Now, three years later, they want to recreate the practice of their past.

These experienced docs operated a successful private practice in another market before coming my way. After a lot of discussion, it became apparent that they are not only strong clinicians who know what support they need from their clinical staff, they also have the characteristics of good leaders who know how to motivate a small staff and engender a healthy “family business” type environment.

We’ve found them a great independent practice association to work with, one that provides good in-network rates and a slew of value-added services and vendor connections to help make it a smooth transition. In fact, there’s only one real issue.

Billing. What did you expect?

I’ve worked with a host of practices over the last 10 years. Some billed in-house. Some billed in-house but employed a certified coder to oversee things. Others used a certified coder to oversee outsourced billing. Others were cash only. And some were out-of-network, a whole other Pandora’s Box of issues.

Billing is always a hot topic with docs. I’ve met many who have felt no person or company could collect their money better than an in-house staff. I’ve met others who shied away from outsourced billing because of a bad story they heard years ago from a peer, and there are certainly some bad stories out there.

Anxiety is always present when turning over the collection of your money to people you don’t see every day. Should it be?

Unless you’re an all-cash practice or have a practice that is predominantly Medicare or Medicaid, I’ve come to feel like outsourced billing is the way to go for a number of reasons:

  • Payer relationships
  • Regulations
  • Complexity of insurance plans and ACOs
  • Government and hospital reporting requirements
  • Claims denials
  • Perspective on payer reimbursements
  • Patient balances

This is, of course, a short list. In fact, each topic can generate a lot of discussion and comment. It’s almost impossible for someone not dealing with payers every day to understand how they are constantly changing reimbursements, reporting requirements, and even some rate structures. This can be especially endemic within the government plans.

I think the bigger questions to ask are these: Can a billing company stabilize my cash flow, aggressively address my revenue cycle, and keep me up to date on all billing-related matters that might impact my practice? Can they help my staff and me learn how to code more effectively and understand what payers are looking for in complex coding situations? Is their pricing truly expensive given what I would have to create within my own office and, more importantly, manage?

Focus on that last word. Most docs I know don’t want to take on another internal management position where they are going to be forced into a learning curve on a subject with extreme levels of detail and risk. In fact, in most instances where I’ve seen in-house billing, the docs start by being dedicated but fall away as their private practices and lives becomes more demanding. Managing the billing effort and staff becomes a pariah of a responsibility. Cash flow usually suffers in one way or another. Only, no one noticed until their salary check was affected. Then crisis mode and high anxiety levels set in.

It’s not always about cost. It’s about the value realized for the expense. You have to ask a lot of questions. You can rely on your peers for a variety of opinions, good and bad stories, and cost data. Or, you can work with a consultant who’s been down this road before, who can analyze what you need and be there to ask all the right and necessary questions.

You need to find ways to effectively use your time and manage the nonclinical parts of your practice as healthcare reimbursement becomes more complex in lockstep with the growing responsibilities of your clinical practice. Outsourced billing, when done right, is certainly one of them. And if the entry strategy is good, there should be no reason for anxiety.

Tom Ellis III has been a healthcare consultant in the North Texas area for more than 20 years and has worked with a variety of clients with a focus on physicians. More information on Tom can be found at www.ellisandassoc.com.

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