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Switching to a Billing Service for Your Medical Practice


Ready to switch to an outside billing service? Here are a few guidelines to help you find the right fit for your practice.

The decision to switch from internal billing to an outside service can be a bit of a toss-up in a family practice clinic, as there are a lot of factors to take in. The argument in most specialty offices for a third-party company is because of complexity, and you don’t often see that need in family practice.

There are a few additional factors that come into play such as: the size and experience of your billing team (or lack thereof); the size of your clinic; the physician and office manager’s personal experience; and understanding of billing and reimbursement. Once you have made the decision to move to utilizing an outside billing service, here are a few guidelines to help you in your search for the perfect fit.

1. Look for or negotiate rates between 5.6 percent and absolutely no higher than 8 percent. There are some companies that charge flat rates, but typically this does not work out better financially in the long run, and in the event that it is cheaper, you usually get what you pay for.

2. Ensure your rates are based on claims paid or received, not just claims billed.

3. Find a company that has 90 percent or better rate of claims paid.

4. Ensure that your chosen billing company handles any appeals on claims filed at no additional charge.

5. Find a company with a track record of increasing claims paid by at least 20 percent. This may be slightly more difficult to find for family practice physicians, again because of the lack of complexity of billing, but it can be done.

6. Ask for and make sure you get in writing that the billing company will provide you with a monthly statement detailing the financial health of your business.

7. Make sure they have a quarterly open audit policy. In other words, make sure you can go through everything at least quarterly to ensure you are both getting your money’s worth.

8. Ask where the actual billers are located. This may or may not be important to you, but sometimes you will find that the primary company is here in the U.S. or even local to you, but the labor is actually performed overseas.

9. Check references. Most of the time a company is not going to give you a reference that won’t speak highly of them, but sometimes they do, and you won’t know unless you call. Have a list of questions prepared and make sure to ask about the good and the bad.

10. If you have ancillary services that bill out unusually high for a handful of CPT codes, negotiate new rates for those specific codes or have them struck from the agreement all together depending on volume. This isn’t always as easy once a contract is in place, so if you are looking to add ancillary services, consider pulling the trigger prior to negotiating with your billing service. There is a big difference in 5 percent of an $80 office visit and 5 percent of a $2,500 treatment.

11. Last but not least, be sure and ask about the billing services ability to assist you in negotiating insurance contracts.

No matter what billing service you choose it is imperative that the physicians, practice managers, and practice owners maintain up to date and in-depth knowledge of not only billing practices and reimbursement on a general level but also have hands-on knowledge of what is going on in their own practice. Having a billing service is not a free pass to be in the dark about these procedures and the ethical and legal way they must be handled.

Find out more about Audrey McLaughlin and our other Practice Notes bloggers.

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