Can you please list the cons of outsourcing billing?
Question: Can you please list the cons of outsourcing billing?
Answer: A Roughly 17 percent of medical practices outsource their billing, but only 5.66 percent of "better-performing practices" do, according to the Medical Group Management Association's "Performance and Practices of Successful Medical Groups." To decide whether you should outsource or not, you must determine how well your current, in-house billing operation is performing and what it is costing you.
Measure your performance by tracking age trial balance, days in accounts receivable, and total accounts receivable over the past three years. Compare these trends to national benchmarks available from the Medical Group Management Association at www.mgma.com.
Measure your billing costs by tallying your expenses related to telecommunications/phone bills, information systems, space allocation, support staff benefits, and billing supplies. Divide your total revenue by these combined costs. Generally, billing costs eat up from 4 percent to 12 percent of your revenue.
If you have high costs and low performance, you should certainly consider outsourcing. However, if you have low costs and low performance, your needs may be best served by spending more on your staff and support tools. Don't outsource just to boost performance; the cost may be too much.
Remember that if you do outsource billing, you are still responsible for regulatory compliance. Billing services have been known to change codes to boost collections.
Some other drawbacks to outsourcing to keep in mind include: