Medical billing is as burdensome as it is critical. Managing a medical practice's revenue cycle requires significant labor and attention to detail, and even with the best billers on staff, there's a lot that can go wrong. The nature of the healthcare industry means practices typically don't get paid until well after services are rendered. Without an efficient medical billing operation, that delay can become unmanageable; in some cases, practices might miss out on payment they are owed altogether.
To ensure that revenue continues to flow smoothly, medical billing departments need to quickly and efficiently capture charges to create claims, properly code those claims and submit them through the right channels to the proper payers. Even as new charges are coming in, billers must keep tabs on previously submitted claims, ensuring they are not rejected or denied by payers. If they are, billers must revise those claims and resubmit them, as new charges continue to pile up. Clearly, there's a lot that can go wrong.
The challenges associated with medical revenue cycle management (RCM) require billing departments to be nimble and adaptable. Billing departments are also responsible for staying abreast of the latest updates, whether that's changing regulations or shifts in payers' policies. No matter which way you slice it, medical billing demands a lot of time, energy and money to run in-house. That's why many medical practices choose to outsource their revenue cycle management to third-party medical billing services, sometimes called RCM services. Unfortunately, it's a crowded space with many disreputable companies; finding a good one can be tough, but it matters because the right service can take the burden of billing off your practice, ideally reducing your expenses while also boosting revenue.
Business.com researched some of the leading medical billing services to help you cut through the clutter. We've reviewed several quality services we encountered in our research and selected some as best picks, such as the best medical billing service for small practices, the best medical billing service for large practices and the most flexible medical billing service.
Editor's note: Looking for a medical billing service? Fill out the below questionnaire and our vendor partners will reach out to you with more information.
Medical Billing Trends to Watch in 2019
Initial ICD-11 diagnostic and procedural codes are up for adoption
You might have seen the flurry of news stories about the World Health Organization (WHO) classifying burnout as a workplace phenomenon and identifying gaming addiction as a risk facing youth. Those headlines came out of the 22nd World Health Assembly, where the WHO presented a proposed draft of the ICD-11 diagnostic and procedural codes.
You might be thinking, "Wait, we just shifted to ICD-10. What gives?" The transition to ICD-10 in the U.S. took place significantly after the rest of the world adopted the standards. In fact, most countries implemented ICD-10 in 1998, while the U.S. only meaningfully moved toward ICD-10 in 2015. Now that the proposed ICD-11 standards have been released, it's up to member states whether they endorse the codes or not.
ICD-11 builds on the ICD-10 coding standards, growing the list of codes in the library from 14,400 to 55,000. While that's a big expansion (likely stirring nightmares about yet another transition), healthcare IT vendors and healthcare providers likely have plenty of time before an IDC-11 implementation is required. Assuming the standards are adopted by member states within the next several months, they still wouldn't go into effect until January 2022. Still, keeping tabs on ICD-11 as it weaves its way through the regulatory process is key to prepare for any impending changes.
The medical billing service market will continue its growth
Healthcare IT is on the rise around the world, driving growth of the medical billing service industry forward as well. Market Research Engine issued a report projecting the medical billing service industry will eclipse $16 billion in total value by 2024. According to the report, that growth will be driven by rapidly changing regulations that make third-party billing more attractive, as well as by the desire of healthcare providers to cut their in-house expenses while growing revenue.
Data privacy will still be a drag on growth, however, giving pause to healthcare providers who are hesitant to provide sensitive patient records to a third party. Demonstrating staff certification and adherence to privacy best practices will be key for medical billing services to remain successful.
Outsourced Revenue Cycle Management vs. In-House Billing
Whether you choose to contract with a medical billing service or keep your billing in-house depends entirely on how large your practice is, how much revenue you take in and how you utilize your staff. To do billing in-house, you will need a certified medical coder on staff. You will also need to keep up with ever-changing medical laws and codes. So many things can go wrong with medical claims, such as simple coding errors, that will make insurance companies reject them. If you manage your billing in-house, it will be up to you and your staff to deal with rejected claims. Billing services take care of all of that for you, including staying on top of laws, codes and policies.
Cost can ultimately determine the smartest choice for your practice. In-house billing requires payroll for a medical coder and usually an annual license for medical billing software. Someone with this certification will cost more to employ than an average clinical staff member, and taking care of claims will likely be their full-time responsibility. Billing services typically charge a percentage of net collections, often between 4% and 9%. Based on that guideline, you should be able to get a general idea of what makes financial sense for your practice as you consider a medical coder's salary versus the speculative cost of a service's percentage. However, there are other costs to your practice to consider for each route.
Outsourced billing can be a good solution for small practices that need their staff to focus on other aspects of running the office. Having one person on payroll as a medical coder may not make sense with the number of patients the practice serves. For larger practices and hospitals, a billing service may not be worthwhile if you have the budget for medical coders and have a large volume of claims and the resources to handle them internally.
Pricing models are largely the same from company to company in the medical billing service industry. Most companies in our review charge a percentage of the net monthly collections, meaning the more revenue they generate for you, the more they get paid. Those percentages typically fall between 4% and 9%, although there are outliers on both the low and high ends.
Some companies also charge additional fees, such as setup fees, implementation fees or clearinghouse fees. These fees can vary greatly from company to company, so it's important to question sales representatives to find out their policies.
Occasionally, medical billing services will institute a monthly minimum that must be paid in case the percentage of a practice's revenue for the month isn't high enough. Other services will charge a base price per provider, per month, on top of which a small percentage of collections is taken, but this model is rare.
We researched dozens of prominent vendors in the medical billing space to determine which were worthy of our best picks. Our initial research included reviewing client testimony, other reviews, company websites and Better Business Bureau ranking. We also examined brands' other offerings in the healthcare space; for example, we considered whether they offer electronic medical record software. We used the information we gathered to narrow down our initial vendors list to a smaller list of 10 finalists to be considered for reviews and best picks. We then considered the following criteria to determine our best picks:
- Pricing: How did the service's pricing compare to others in our review, and was the company upfront about how its pricing model works and what is included?
- Additional fees: Are there additional fees on top of the base pricing? Did the company explain these fees in a forthcoming manner?
- Contract requirements: What is the minimum contract requirement? Is there an opportunity to cancel early for no fee if the service does not meet expectations?
- Healthcare IT suite: Does the company offer proprietary electronic medical records software or practice management software? If so, does the company require that RCM service clients use its IT systems, or can they integrate with third-party systems as well?
- Claims process: What does the claims process look like, and what services does the company include in its pricing? Are there certified coders on staff? Will staff follow up on outdated or denied claims?
- Specialties: What specialties does the service commonly work with, and will it tailor its process to the needs of the practice given its specialty?
- First-pass claims rate: How many claims are generally accepted by payers on the first pass, and how many require resubmission or follow-ups?
- Denial management: What does the RCM service's denial management process look like? Does it handle all types of denials and rejections or only certain types?
- Biller/coder certifications: What type of training, education or certifications are the billers and coders for the RCM service required to maintain?
- Reporting: What kind of financial reporting can a practice expect and how often? Are reports customizable? Are they available on demand?
In the end, we selected DrChrono as the best medical billing service for small practices, AdvancedMD as the best medical billing service for large practices and CareCloud as the most flexible medical billing service.
Common Medical Billing Service Questions & Answers
You can do all of that. Personally, I send an invoice to my clients for 50% of the accepted proposal in the beginning, and will start on the project as soon as I receive notification the invoice has been paid. Then a second invoice upon completion and launch of the project. Benefits: no printing, mailing, ink, no waiting on the post office to deliver the mail with the invoice because it is delivered immediately through email, and shows immediately in my account upon payment...
I would look at which states you want to bill in. Then go to each state's department of commerce website as you will need to get licensed in each state to be able to bill. From there, I would post on LinkedIn or a similar site to find people who know how to bill, what software you need to get started, etc. That should get you moving in the right direction. Good luck.
There are multiple options available to you, but yes, you should do the accounting in a program. If you start from now using accounting software, you'll have all of your history in one place and can generate reports to compare time periods. And many import your transactions, so if you know what they are for, it won't take long to post. That doesn't mean you have to do the work yourself. If it's a fairly simple business, you can have a teenager or intern assist you as long as you understand...
Hi Kassandra, Overdue payments are a chronic problem in professional services, which is why I've always advocated being paid in advance, even if it means a small discount. There are times when payments are late because of client cash flow problems (primarily in smaller businesses), or because invoices are lost, or because mistakes are made. But late payments are usually a product of either overly bureaucratic rules being enforced or just sloth. When a client says "It takes 30 days to go...