In-house billing versus outsourcing: 5 questions to consider
Determining whether to handle medical billing in-house or outsource it to a third-party vendor is one of the most important decisions you will make. Why? Medical billing and revenue cycle management forms the foundation for accurate reimbursement and smooth cashflow. A wrong decision with in-house billing versus outsourcing could put your entire medical practice at risk for fines, recoupments, penalties, and claim denials. On the flip side, the right decision keeps the business profitable and allows physicians and staff to focus on doing what they do best: Provide high quality patient care. When thinking about in-house billing versus outsourcing, it’s important to be honest with your goals, strengths, and limitations. Following are five questions to consider as you assess internal capabilities and explore medical billing and coding outsourcing companies.
1. ‘Can we realistically do it on our own?’ This may seem obvious, but when thinking about in-house billing versus outsourcing, it’s important to consider whether you have the internal expertise to manage medical billing efficiently and compliantly for your specialty and payer mix. This includes having access to experienced and credentialed medical coders locally and/or the technological capabilities to hire remote staff. If you do have access, can you afford to pay these individuals competitive salaries that include benefits? The average CPC-credentialed medical coder earns around $65,000 annually. And what are the costs associated with the training, software, and other resources in-house coders and billers might need to be successful? Sometimes it’s more practical and cost effective to partner with a vendor because medical billing and coding outsourcing companies cover overhead costs and other expenses associated with full-time employees. All of these questions and more are critical as you consider in-house billing versus outsourcing and explore the potential for partnerships with medical billing and coding outsourcing companies.
2. ‘Are we comfortable with our current financial picture?’ If the medical billing staff you currently employ isn’t performing up to par (e.g., you’re experiencing high denial rates, delays in payment, and errors), you could try to explore the root causes of any problems and then implement proactive strategies to improve financial performance. However, it may be more cost effective and efficient to simply partner with one of many medical billing and coding outsourcing companies that can get you back on track immediately. When thinking about in-house billing versus outsourcing, it’s important to understand any potential vendor’s key performance indicators (e.g., collection rate, clean claim rate, and accounts receivable over 90 days) and how they compare to your own. Sometimes the numbers from these medical billing and coding outsourcing companies provide all the incentives you need to confidently move forward with outsourcing.
3. ‘Can our current medical billing model scale as we grow?’ As you ponder in-house billing versus outsourcing, remember this: Your solo medical coder/biller may be able to handle your current claim volume with ease, but what happens when you decide to merge with another medical practice, hire additional providers, and/or expand your service lines to include more specialized procedures? You’ll either need to hire more coders and billers or pursue a more sustainable and flexible option that expands commensurate with your business needs. Medical billing and coding outsourcing companies may be your best bet. Trying to ‘make do’ with existing staff can fuel burnout and increase billing errors. As you think about in-house billing versus outsourcing, keep in mind that outsourcing may also help mitigate risks of turnover, vacation gaps, or inconsistent performance. These are all important considerations as you think through in-house billing versus outsourcing and explore the potential to collaborate with medical billing and coding outsourcing companies.
4. ‘How effectively can we manage compliance risk?’ In many cases, medical billing and coding outsourcing companies offer stronger safeguards for HIPAA, OIG compliance, and audit preparedness. This fact alone may push you toward an external vendor as you think about in-house billing versus outsourcing. In some cases—and depending on the contractual language with medical billing and coding outsourcing companies—the vendor may even share financial responsibility for billing errors, underpayments, and/or overpayments. This includes agreeing to compensate you for losses related to specific types of errors these medical billing and coding outsourcing companies cause.
5. ‘Is our current EHR technology moving us forward or holding us back?’ Some medical billing and coding outsourcing companies may also offer advanced revenue cycle management software, automation, and advanced data analytics capabilities. These medical billing and coding outsourcing companies may also offer technology to improve patient engagement (e.g., check-in kiosks, secure patient portals, and online self-scheduling) that can help you leverage an improved patient experience as a competitive advantage. They may even specialize in patient-friendly communication and multilingual support. All of this matters when thinking about in-house billing versus outsourcing.
Making the right decision
As you think about in-house billing versus outsourcing, you’ll need to perform a thoughtful evaluation of current processes and outputs and a realistic and honest assessment of current and future needs. In some cases, it may make sense to partner with one of several medical billing and coding outsourcing companies in the short term but not in the long run while in other scenarios, the opposite may be true. Looking for help sorting through the confusion of in-house billing versus outsourcing? Contact edgeMED for more information and to learn more about how our unified platform of expert revenue cycle management and intelligent technology helps medical organizations of all sizes and specialties improve clinical, financial, and operational outcomes.
