Why Outsource Medical Billing Services?

Why Outsource Medical Billing Services
  • Avatar photo Victor Bala
  • Jan 30 2025
  • Reading Time: 10 minutes.

Medical billing is outsourced by subcontracting the entire billing process to an outside party company for a healthcare provider. This includes management of accounts receivable, payment posting, medical coding and claim submission. Outsourcing helps healthcare providers concentrate more on patient care rather than on an intricate billing process, leading to improved efficiency, lower costs, and enhanced revenue.

While the concept of outsourcing is not new, outsourcing of medical billing can be a daunting task. This is because medical billing and coding are closely associated; therefore, substantial financial loss can happen if your service provider is not skilled in accurately identifying the acceptable codes. But with the right approach, outsourcing should be smooth, enabling you to focus on the key priorities of your business.

Why Do Businesses Outsource Medical Billing?

The three key reasons for businesses to outsource medical billing include efficiency, cost savings, and regulatory compliance. Outsourcing to these specialized companies allows businesses to make the most out of their internal resources, focusing all efforts on patient care, reducing overhead integral to keeping the billing department in-house, and taking advantage of the experience offered by professional billers with extensive knowledge of billing regulations and medical billing nuances. Reasons to outsource medical billing include

Improved Management

Many people think that once they outsource their medical billing services, they lose control over their company operations. The reverse is actually the case. In fact, many people believe they have greater control over the money and processes involved in medical billing when they instead use a dedicated and experienced outsourced billing crew. As you might imagine, having this level of control is closely related to the gains you’ll find from outsourcing.

Changes in Regulatory Frameworks

The regulations governing the medical billing industry keep changing frequently. Whatever business you are in, keeping up with all of the updates can be, quite literally, a serious pain. When you outsource your medical billing, you can breathe easy knowing your partner will stay updated on regulations and incorporate them as needed. This will give you more mental bandwidth to spend on other aspects of running the business.

Labor Savings

Billing represents 30 to 40 percent of a company’s collection budget. Using an outside company to manage their medical billing can save them a fortune. Medical billing outsourcing eliminates the need to hire an in-house medical billing team and the costs involved with ensuring that the team is trained and up to date with the latest guidelines.

Enhanced Revenues

In terms of salaries, office infrastructure, procuring, upgrading, and maintaining billing software, companies can save a significant amount of time and money by outsourcing medical billing. Revenues for the business will rise in tandem with the decrease in overhead costs, prompt claim submission, and improved reimbursements.

Increased Security

Hiring a third party to handle your billing is a risk-free option. A highly transparent billing process is provided by well-established outsourcing companies. As a precaution against hacking, the majority of service providers use medical billing processes that are both secure and comply with HIPAA regulations. Companies must be confident that their data is kept confidential at all times. Outsourcing providers who are highly regarded possess the necessary infrastructure and security measures to offer a secure environment for medical billing outsourcing operations.

No Financial Risk

By outsourcing medical billing, a company is relieved of the obligation to acquire the most recent equipment or billing software. The company has to no longer contend with costly software upgrade investments as well. In numerous instances, the costs are significantly reduced, and it is feasible to commence operations without any initial capital investments. This is due to the absence of a necessity to possess a comprehensive invoicing system.

More Personalized Care

Health practitioners are able to focus on their patients instead of spending time on their billing processes when the medical billing processes are outsourced to a third party. It is a sound business decision to allocate your time to your primary competencies, such as providing high-quality patient care, and to outsource ancillary business functions to service providers.

Access to Trained Specialists

The majority of offshore service providers have employees who are highly experienced and well-versed in all the business requirements of outsourced medical billing and coding. They ensure that all carriers are paying the correct amount and examine and follow up on all payments. A decrease in overhead is achieved through the tracking of all outstanding claims until they are processed and paid in full.

Adherence to ICD-10 standards

The most recent iteration of the ICD, i.e., ICD 10, is an increasing concern amongst the medical community. The new coding changes have greatly affected how health providers manage their time and the results of their payments. Because most medical billing outsourcing companies are already familiar with the extensive laws involved, they will be able to handle all of the coding changes brought about by ICD-10.

Patient Satisfaction

For most patients, traveling to the hospital itself is time-consuming and, in certain cases, a bad experience. In addition to accepting medications and care regimens, they must understand the costs. An expert service provider can address all financial issues, while a staff that is both courteous and knowledgeable can guarantee that your patients are satisfied with their stay. This means you won’t have to burden patients with financial matters, and they can deal directly with the professional medical billing staff of the service provider. This enhances the efficiency and effectiveness of all individuals.

In conclusion, healthcare providers who are interested in optimizing their revenue cycle and improving operational efficiency may find outsourcing medical billing services to be an appealing option. Providers can significantly reduce administrative burdens, improve cash flow, and ultimately allocate more resources to patient care by outsourcing billing tasks to specialized companies. However, outsourcing is a viable and potentially advantageous strategy for many healthcare organizations due to the potential benefits, including cost savings, improved accuracy, and enhanced compliance, despite the importance of carefully selecting a reputable and trustworthy outsourcing partner.

FAQ

1. What are the advantages of outsourcing medical billing?

Cost Savings: By eliminating the necessity for in-house invoicing staff, salaries, benefits, and training.

Enhanced Efficiency: Enhances cash flow, reduces delays, and streamlines processes.

Improved Revenue: Assists in the identification and resolution of potential obstacles to revenue collection.

Concentrate on Patient Care: Enables healthcare providers to concentrate on patient care rather than administrative tasks.

Compliance and Regulatory Expertise: Guarantees adherence to the healthcare industry’s ever-evolving regulations and rules.

2. What are the potential hazards of outsourcing medical billing?

Data Security: Healthcare providers must guarantee that the outsourcing company has implemented sufficient security protocols to safeguard patient data.

Communication Obstacles: Delays and errors may result from miscommunication between the outsourcing company and the healthcare provider.

Loss of Control: The invoicing process may be subject to some degree of outsourcing.

Selecting the Appropriate Partner: It is crucial to conduct a thorough investigation and select a reputable outsourcing company.

3. Is outsourcing medical billing a good idea?

The outsourcing of medical billing can be extremely advantageous for healthcare providers. Outsourced medical billing companies provide specialized expertise, sophisticated technology, and streamlined processes that can enhance efficiency and accuracy. Healthcare providers can concentrate more on patient care and less on administrative tasks by collaborating with medical billing outsourcing companies in the United States. Evaluation of the specific advantages for your practice is imperative when contemplating medical billing outsourcing alternatives.

4. What is the process of outsourcing medical billing?

Third-party companies are responsible for administering your billing processes when you opt for outsourced medical billing services. These medical billing and coding outsourcing companies are responsible for a wide range of tasks, including revenue cycle optimization and claim submissions. Outsourced medical billing companies guarantee accurate and timely billing by employing sophisticated technologies and experienced personnel, thereby enhancing cash flow and mitigating errors.

5. What is the process for selecting a medical billing outsourcing company?

Research and Compare: Conduct research on various companies and compare their services, pricing, and client testimonials.

Verify Credentials: Ensure the organization’s accreditation and impeccable record.

Data Security: Inquire about the company’s data security measures to safeguard patient information.

Communication: Ensure that the organization maintains an effective communication process.

Contractual Conditions: Prior to signing, meticulously examine the terms of the contract.

Avatar photo

Victor Bala

Medical & coding

About the Author:

Victor has over a decade of experience in delivering revenue cycle management services to the US healthcare providers. He has a proven track record of accelerating revenue collection by streamlining the billing, coding and AR processes. His team at Velan has been delivering revenue cycle management cycle, appointment scheduling, pre-authorization and credentialing services to physicians, group practices, and hospitals.

He can be reached at [email protected]

Considering the complexities of healthcare billing in the USA, why choose Velan HCS for your billing services?