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Updated Mar 20, 2024

The Best Medical Billing Services of 2024

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Leah Zitter, Senior Analyst & Expert on Business Strategy
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Best RCM Software
  • Robust billing tools
  • Competitive pricing
  • User-friendly software
Visit Site
Links to RXNT
  • Robust billing tools
  • Competitive pricing
  • User-friendly software
Best for Claim Scrubbing
CareCloud
  • Exceptional usability
  • High flexibility
  • Consultative approach
Links to CareCloud
  • Exceptional usability
  • High flexibility
  • Consultative approach
Best for Workflows
DrChrono
Dr. Chrono logo
  • Low cost
  • Intuitive software
  • Good customer support
Links to DrChrono
  • Low cost
  • Intuitive software
  • Good customer support
Best for Tracking Claims
Tebra (Formerly Kareo) – MBS
Tebra logo
  • Inexpensive service
  • Intuitive software
  • Extensive training materials
Links to Tebra (Formerly Kareo) – MBS
  • Inexpensive service
  • Intuitive software
  • Extensive training materials
Best for Free Implementation
ChartLogic
  • Low cost
  • Certified coders and billers
  • Free implementation and training
Links to ChartLogic
  • Low cost
  • Certified coders and billers
  • Free implementation and training

Table of Contents

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Medical billing services can alleviate the burden of coding claims and chasing collections. The best services offer certified medical coders and billers who can create, submit and follow up on claims to ensure they get paid quickly and in full. Most medical billing services also offer rejection and denial management services, employing a team to revise and resubmit claims that clearinghouses and payers refuse. To help you choose the best medical billing service for your business, we examined the top medical billing companies, evaluating each on price, process, software and ease of use.

Why You Should Trust Us

At business.com, we’ve independently evaluated hundreds of business software and services to determine the best products for small businesses. Our expert editorial staff identified the best medical billing service based on firsthand experience, comprehensive research and rigorous testing. Each product was analyzed and rated on a number of factors, including cost, ease of use and features. The business.com team prioritizes accuracy and fairness in all of our assessments. Learn more about our methodology.

Did You Know?Did you know

Medical billing consists of charge entry, medical coding, claims scrubbing, submission via a clearinghouse, and denial management when a clearinghouse or payer kicks back a claim.

Tip Bulb

How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

11

Considered

11

Researched

8

Selected

Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
CareCloud
DrChrono
Tebra (Formerly Kareo) – MBS
ChartLogic
AdvancedMD – MBS
athenaCollector
CureMD
MedicsPremier
Rating (Out of 10)0.08.78.68.68.58.58.78.68.2
Best for

RCM Software

Claims Scrubbing

Workflows

Tracking claims

Free Implementation

0

New Practices

Tracking KPIs

Growing Practices

Pricing (% of monthly collections)

Starts at $193 per provider per month for billing software

3% to 7%

4% to 8%

4% to 9%

3% to 6%

0

4% to 7%

Starts at 4%

3% to 6%

Contract requirement

N/A

3 years

1 year

30-day cancellation notice

2 years

0

2 years

1 year

Varies

Reports

Dozens of pre-built reports

Custom tables can be turned into daily, weekly or monthly reports

Multiple pre-built, speciality-specific templates for reports.

More than 200 templates for reports, charts and automated emails. Real-time reporting engine.

Library of specialty-specific vocabulary that combines with customizable templates

0

Library of custom clinical reports

Customized for 30+ practices

User-definable reports for management and financial data

Implementation and training

Included in subscription

Varies by package

Typically takes 30-60 days

About 30 days from sign-up to fully set- up, trained, and actively using the software

6-8 week process

0

11-week implementation process

4-8 weeks depending on practice size

Minimal training/ onboarding

Mobile app

iOS/Android

iOS/ Android

iOS/ Android

iOS

No mobile app

0

iOS/ Android

iOS

Android

Review Link
Scroll Table

Our Reviews

RXNT: Best RCM Software

  • RXNT offers software for medical billers and RCM services that has all the tools and reports needed to succeed.
  • RXNT is competitively priced and charges a subscription rate instead of a percentage of monthly collections. 
  • RXNT is not a medical billing service and instead offers the tools medical billers need to get the job done in-house. 
Editor's Rating: 0/10
Visit Site

RXNT isn’t a medical billing service like the other companies we’ve reviewed on this list; instead, it provides software for medical billers to support comprehensive outsourced revenue cycle management. If you’re looking to start your own medical billing service, RXNT is the solution for you. Alternatively, if you’re managing billing for a large health system and want to run your billing department like a dedicated RCM company, RXNT could provide the tools you need as well.

Instead of a percentage of collections, you’d pay a subscription price for access to RXNT’s software. It’s competitively priced, starting at $193 per provider per month for access to the billing software and associated reports. Speaking of reports, RXNT gives you dozens of pre-built reports that offer strong insight into the financial performance of your practice, helping you refine billing operations to improve collections and reduce days in A/R.

We recommend RXNT for practices that want to keep billing in-house but with the sophistication of an outsourced RCM provider. We do not recommend RXNT for practices that want to outsource their medical billing to a third-party service.

CareCloud: Best Medical Billing Software for Claim Scrubbing

CareCloud
  • CareCloud provides practices with helpful reports on common denial reasons.
  • The software does an excellent job of helping practices identify billing problems.
  • CareCloud requires practices to commit to a multi-year contract.
Editor's Rating: 8.7/10

We chose CareCloud as the best medical billing software for claim scrubbing because of its medical billing rules engine, seamless end-to-end integration, and ability to eliminate medical billing inefficiencies and help users collect more money in less time.

CareCloud’s billing software removes all the inefficiencies of the billing cycle, making your RCM process as smooth as possible. It accomplishes this with features that include claim scrubbing and submission, coding, denial resolution, centralized billing, advanced analytics and payment processing.

We like how the platform provides a quick view of all billing information, which helps you view collections data in seconds. This ensures you don’t have to dig through numerous portals or hubs to find critical information.

CareCloud integrates with scheduling and patient experience tools, along with patient payments and clearinghouses, for end-to-end reviewing, preparing, scrubbing, verifying patient information, and processing and tracking submitted claims. An analytics and reporting hub with attractive graphs and metrics shows you whether and how to improve your practice. Helpful tools include capabilities to batch patient payments for faster processing and for posting electronic remittance advice (ERA) to your patients’ accounts. Other parts of the dashboard automatically identify no-response and denied claims. The platform comes with a CollectiveIQ, or rules engine with its compilation of advanced automated billing rules, so that you can avoid errors and get paid faster.

An in-house support team is also ready to assist you with your medical billing questions. We were also impressed with CareCloud’s dedicated training that helps clients with their medical billing and prompt data migration.

CareCloud also includes talkEHR, which is designed specifically for physical therapy (PT) practices. This enhanced platform integrates with CareCloud Remote, improving PT practices’ revenue and billing processes.

Google has recognized the platform as Chrome Enterprise Recommended, which confirms that talkEHR meets all of Google’s state-of-the-art testing and security standards. It also verifies that talkEHR is fully compatible with the ChromeOS ecosystem.

CareCloud RCM users who also use the company’s medical software should expect new generative AI features. These forthcoming tools, developed in partnership with Google Cloud, automatically display key data as practitioners devise treatment plans. This way, you can more efficiently access, review and use this data. More details are expected in the coming months.

DrChrono: Best Medical Billing Software for Workflows

DrChrono
Dr. Chrono logo
  • DrChrono medical billing software includes a live-claims feed with claim data and status information.
  • The software provides practices with clear and transparent reports and graphs.
  • DrChrono does not provide a telephone support option.
Editor's Rating: 8.6/10

We chose DrChrono as the best medical billing software for workflows because of its 96% clean claims submission rate (best in the industry), a higher-than-96% rate on claims paid in 60 days and over $3 billion in claims processed by DrChrono’s internal revenue cycle management (RCM) services to date. DrChrono’s case studies indicate that businesses that used their medical billing service saw their cash flow improve by around 40%.

DrChrono’s billing service promises to help you with income stability while giving you more time to look after your patients with its front-end electronic health record (EHR) billing platform and an add-on back-end internal team. Its internal team guarantees clean claims submission, 48-hour turnaround on denials and improved cash flow.

We like how DrChrono covers all aspects of medical billing in one convenient location. On the back end, its credentialed experts scrutinize clinical notes for proper ICD-10 and CPT codes to ensure you get reimbursed. They also confirm that your clinical documentation meets required compliance. DrChrono wraps it all in one, ensuring you don’t lose revenue through incorrect codes or noncompliance. Rejected claims are reworked by its experts and resubmitted within 48 hours of denial. Additionally, DrChrono’s RCM task manager helps you see real-time updates on your claims, receive payment and communicate with its team of billers whenever you want.

DrChrono matches you with a dedicated account manager who is available for questions and provides performance reports in your regular monthly one-on-one meetings. We find that appealing, since few companies can afford an in-house biller.

If you do your own billing, DrChrono gives you up-to-date reports on your practice’s performance and advice on optimizing your medical billing better (you’ll find both under the business intelligence (BI) tools hub). This ensures you know precisely where you stand and whether you’re over- or underperforming with your finances. Even those practices that hire DrChrono for back-end services can profit from these BI reports, since the two services synchronize. The internal team handles your billing while you use the front-end reports for insights to improve your finances.

Tebra - MBS: Best Medical Billing Service for Tracking Claims

Tebra - MBS
Tebra logo
  • Billing data is easily viewed and accessible from the Tebra platform.
  • The platform requires minimal training to get up to speed on.
  • Tebra does not have a track record of outstanding customer service.
Editor's Rating: 8.6/10

We chose Tebra as the best medical billing software for tracking claims because its functionalities help medical providers automate and track payments, seamlessly submit to clearinghouses, and collect outstanding bills from patients.  Tebra is a user-friendly, highly customizable piece of software that helps practices across the spectrum create a billing and reporting system that meets their needs.

Designed for independent and new practices, Tebra’s billing functionality helps medical providers automate and track payments, seamlessly submit to clearinghouses, and collect outstanding bills from patients. The dashboard’s functionality helps you enter charges, check coding, and send insurance claims and patient statements. It also enables you to process credit cards, automatically post payments, print reports, manage denials and collections, load fees and contracts, scan documents, and more.

We like how Tebra’s billing capabilities integrate with its EHR and patient portals (learn more in our review of Tebra’s medical software) so that you can see all medical billing-related data in one view. Providers submit their charges through TebraClinical, from which billers instantly get these records at the practice management back end to bill out.

Tebra’s medical billing system is all-encompassing and on demand because (like its competitors) it’s cloud-based, which means it’s available 24/7 with real-time reports. Tebra also collates reports from across its system so that you can see your patient data at a glance along with the status of claims, without needing to log in to other data sets.  This includes live information, such as whether the patient made copays, kept appointments and has active insurance. You can also audit their schedule to make sure you have all their partner billing. Another Tebra billing tool helps you check codes against industry standards and payer-specific reimbursement rules, as well as access a knowledge-base of coding, compliance and reimbursement rules.

The “insurance claims” tool processes your electronic claims to more than 2,500 government and commercial insurers, prints paper claims when necessary, and helps you receive claim processing reports with frequent status updates. Denial and collections management enables you to track unpaid insurance claims and automatically flag denials.

With Tebra, you can manage multiple practices, set up users and role-based security, manage insurance lists, and manage code sets such as CPT, HCPCS and ICD-9 from one convenient location. Unlike DrChrono and AdvancedMD, Tebra has no in-house medical billing option, but it optimizes your billing process and matches you with high-performance medical billing services if required.

ChartLogic: Best RCM Service for Free Implementation

ChartLogic
  • ChartLogic is a low-cost solution.
  • ChartLogic provides certified coders and billers.
  • In most instances, ChartLogic requires practices to use its EMR and practice management software in order to use its billing services.
Editor's Rating: 8.5/10

ChartLogic is our choice for the best medical billing software for free implementation because its vendors dedicate themselves to making the onboarding and training as simple as possible. The entire onboarding process takes no longer than six weeks and is meticulously customized for your practice. Training is quick and straightforward, and the interface is user-friendly. Users can start using the software right away. Support staff is available for ongoing support and challenges. ChartLogic is perfect for the tech-panicky individual.

ChartLogic has all the EHR tools necessary to make your practice, including your  billing, run as smoothly and efficiently as possible. Office managers use its practice management tools to handle appointment scheduling, reporting and claims, while billing specialists use its functions to determine eligibility and manage collections.

All of ChartLogic’s coders and billers are not only certified, but also experienced in various specialties. Team members are assigned to you based on your practice’s specialty and the complexity of your billing processes. Similarly, ChartLogic pairs coders and billers with your practice based on their understanding of your geographic region and local insurance company policies.

If you opt-in to ChartLogic’s practice management system (PMS) alongside its revenue cycle management services, you can also use it for inventory management. That’s because ChartLogic’s PMS comes with the platform FlexScanMD, which is designed for medical practices. You can use FlexScanMD to track the items that your medical practice stocks, sells or dispenses. Tracking your revenue becomes easier with this feature and your medical billing in the same online hub.

AdvancedMD - MBS: Best Medical Billing Software for Ease of Use

AdvancedMD - MBS
  • AdvancedMD provides practices with helpful code libraries for reference.
  • The software integrates with clearinghouses.
  • AdvancedMD’s system may not be compatible with physical therapy and behavioral health specialties.
Editor's Rating: 8.5/10

We chose AdvancedMD as the best medical billing software for ease of use because its platform uses a color-coded system that makes it simple to navigate. There are extensive code libraries for reference, and all claims are handled by its internal back-end team, which organizes your records in prioritized worklists, giving you visibility throughout the entire claims submission process.

AdvancedMD’s industry-proven clearinghouse and claims scrubber promise to help you achieve at least a 95% first-pass acceptance rate. Its platform’s “claim inspector” feature automatically scrubs each claim and identifies potential errors prior to submission, saving hours on appeals and lost reimbursement. AdvancedMD’s dashboard also feeds you the status of all claim runs in real time, as well as shows you worklists of unbilled claims with missing or incorrect data. AdvancedMD stops the process when affected claims are identified. Common claim errors are automatically recognized. Clearinghouse exclusions are also automatically organized in a certain waitlist, while running alerts give you better visibility over problem payors so you can shorten the payment cycle.

When it comes to remittance, the billing dashboard shows the carrier payments that have been received electronically and the patients associated with them. You can auto-post directly to a patient’s account with a single click, helping you review the remittance details of each claim and their key items, such as the patient’s date of service, contracted amount, patient balance and so forth. AdvancedMD’s dashboard also allows you to process credit cards stored on file and send out patient statements and collection letters, among other functions.

Other valuable tools include the ability to have electronic remittance advice (ERA) documentation included alongside write-off calculations to ensure proper payment collection. Additionally, you can also include documents directly alongside claims. Both of these features help simplify and streamline your on-staff coder’s portion of the medical billing process.

athenaCollector: Best Medical Billing Software for New Practices

athenaCollector
  • Athenahealth’s coding experts investigate denials.
  • The software automates bills for unpaid debts.
  • With athenahealth, you need in-house medical billers to handle coding and denied claims.
Editor's Rating: 8.7/10

AthenaCollector is our choice for the best medical billing software for new practices because its medical billing portal is intuitive and easy to use. Front-office staff can log in to see appointment requests, upcoming appointments and other clinical documents from one convenient location. Its dashboard gives you instant access to over 100,000 healthcare providers and close to 100 million patients, with alerts that notify you of data changes in real time. There’s also a library of around 50 million rules to help you with medical coding.

AthenaCollector’s billing portal offers some unprecedented benefits that competitors lack. Specifically, the service scrubs claims within a few seconds of receipt and promises to reimburse you in at least three working days. Also – and this is huge – if athenaCollector fails to get 95% of your denied claims accepted within 10 days, it guarantees a refund. Third, athenahealth handles your service-level agreements (SLAs) for full reimbursement. Finally, it pursues underpaid or unpaid claims, making sure you collect on every cent owed.

We like how athenaCollector’s reporting hub helps you view medical billing reports on a monthly or weekly basis with live information on accounts receivable, collections, and common causes for denial or delay. Its analytics compares your practice’s billing performance against those of other practices that use athenaCollector so that you can see how you stack up. Further, the software’s continuously updated rules engine catches claims errors before they’re made, resulting in a 93% first-pass resolution rate.

Additional services include dedicated training with its medical billing functionalities and active support. While DrChrono and AdvancedMD handle your billing internally, athenaCollector differs in that it outsources your claims and reviews them for accuracy before submitting those scrubbed reports to insurers. It’s the middle ground between referring you to outsourced billers, such as Tebra does, and scrubbing your claims in-house.

CureMD: Best Medical Billing Software for Tracking KPIs

CureMD
  • CureMD offers a KPI dashboard that lets you track your practice’s performance with easily digestible graphs and charts.
  • It offers a breadth of experience to suit many types of healthcare organizations.
  • To use the CureMD medical billing service, practices must also use the practice management software.
Editor's Rating: 8.6/10

CureMD offers one of the most intuitive, flexible dashboards for setting and tracking your practice’s key performance indicators (KPIs). Regardless of your practice’s specialty or size, you can adjust its KPIs and targets, then track their progress as CureMD performs charge entry, coding, claim submission and denial management.

CureMD is a low-cost medical billing service starting at a price of 4% of your monthly collections, which is more cost-effective than many of the medical billing services we reviewed, whose rates can range from 5% to 10% of monthly collections. CureMD also supports more than 30 specialties, making it a good fit for a wide range of medical practices. Certain specialties have unique needs, such as specific ICD-10 codes or payer rules.

In addition to the actual coding and billing, CureMD offers fee schedule review, insurance eligibility verification, credentialing and denial management services. The company touts a 96% first-pass claims rate. The company will also manage the collection of patients’ copays and other out-of-pocket charges.

CureMD’s cloud-based software platform doesn’t require user installation; CureMD manages the implementation process and provides training. However, some customers have complained that this process is arduous and leaves much to be desired in getting staff up to speed on the system. Because CureMD’s medical practice management software is required for the medical billing service, billing clients must go through this implementation process to configure the system. A rocky implementation can disrupt operations and negatively impact collections.

CureMD’s software is lightweight, lacking the bells and whistles of more advanced healthcare IT platforms. But for practices that want a simple, intuitive solution with a modern aesthetic and seamless user experience, CureMD is a great choice.

MedicsPremier: Best Medical Billing Service for Growing Practices

MedicsPremier
  • MedicsPremier offers low-cost medical billing services ranging from 3% to 6% of your monthly collections.
  • MedicsPremier submits test claims on behalf of clients, covering 50 to 100 patients over the first week of service.
  • MedicsPremier’s software has a somewhat cluttered and dated user interface that can be difficult for new users to navigate, so extensive training is a must to use the system effectively.
Editor's Rating: 8.2/10

MedicsPremier, a software platform and medical billing service from the Advanced Data Systems Corporation (ADSC), is an effective choice for growing practices looking for a competitively priced solution. For one thing, MedicsPremier begins your service with a test run on 50 to 100 patients, ensuring all vital elements of your billing operations (such as insurance eligibility verification and patient statements) are running smoothly. This is key for scaling operations, helping you guarantee your systems won’t break when your claims volume increases.

MedicsPremier’s pricing is on par with other billing services we reviewed. Ranging from 3% to 6% of your monthly collections, based on the specialty and claims volume of your practice, MedicsPremier beats the industry-standard pricing we discovered in our research.

MedicsPremier maintains a proprietary rules engine, which it says can boost a practice’s first-pass claims rate to over 99%. The company also performs insurance eligibility verification, an essential feature of medical billing services, which guarantees that your patients have up-to-date insurance policies that cover the services they need. In the event of rejections or denials, MedicsPremier will handle the denial management process, focusing on a fast turnaround of resubmitted claims.

We love that MedicsPremier tries to help uninsured patients find coverage. We also like how it is credentialled with clearinghouses and insurance companies. Finally, we’re impressed with how it guides users on electronic remittance and benefits.

Costs of Medical Billing Services

Pricing models are primarily the same from company to company in the medical billing industry. Most companies in our review charge a percentage of your net monthly collections, meaning the more revenue they generate for you, the more they get paid. Those percentages typically fall between 3% and 9%, although there are outliers on both ends.

Some companies charge additional fees, such as setup, implementation or clearinghouse fees. These fees can vary greatly by company, so it’s important to ask sales representatives about their companies’ policies.

Occasionally, medical billing services will institute a monthly minimum in case the practice’s revenue for the month isn’t high enough to be profitable for the billing company. Other services charge a monthly per-provider base price, taking a small percentage of collections on top of that, but this model is rare.

TipBottom line

Look for a medical billing service that doesn’t charge implementation fees or add-on costs for its healthcare IT features. For some practices, hiring a medical billing service is a great way to gain access to a healthcare IT suite, which is virtually a requirement for a modern healthcare practice.

What Are Medical Billing Services?

Medical billing services allow practices to outsource their medical coding and billing processes. Also known as revenue cycle management (RCM) services, medical billing companies remove the burden of coding claims, submitting them to payers, following up on unpaid claims and managing denied claims.

Outsourcing your RCM puts a dedicated team in charge of generating your claims, scrubbing them for errors, and chasing denials or underpayments, which reduces or eliminates the workload associated with in-house billing. Best of all, most services operate directly within your clinic’s existing practice management software, allowing your staff to monitor the progress of your submitted claims.

While medical billing services offer significant benefits, it’s important to choose the right one for your practice. The wrong partner could tie up your practice’s money and possibly allow patients’ payments to fall through the cracks. To ensure smooth cash flow, medical billing departments need to capture charges and create claims for them quickly, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges come in, the billers must keep tabs on previously submitted claims in case they are rejected or denied by payers. If they are, the billers must revise and resubmit those claims – without falling behind on the new claims. Medical billers are also responsible for sending statements to patients for copayments or out-of-pocket expenses and following up on unpaid patient accounts.

The challenges of medical RCM require billing departments to be nimble and adaptable. They must stay abreast of updates, such as changing regulations and shifts in payers’ policies. No matter which way you slice it, in-house medical billing demands a lot of time, energy and money. That’s why many medical practices outsource the process to third-party medical billing companies, sometimes called RCM services.

The Benefits of Medical Billing Services

Medical billing services help medical practices in various ways. These are the major benefits of medical billing services:

  • Streamlined back-office processes: Outsourcing to a medical billing service reduces the staff and resources your practice must expend on back-office processes like billing and coding. Because these services minimize the administrative burden on your staff, they have been known to reduce burnout in the healthcare field.
  • Payment tied to success: A medical billing service’s payment is connected to the success of your practice, since it generally costs a percentage of your monthly collections to outsource to an RCM service. The more money a medical billing service successfully collects on behalf of your practice, the more it gets paid, so it is invested in helping you succeed.
  • Faster reimbursements: Medical billing services are experts in coding and billing, so they can typically navigate the process much more easily than a single practice can. This is especially true if the RCM service has an existing relationship with clearinghouses and payers. This means less waiting around for payment on the services you’ve already rendered.
  • Lower denial and rejection rates: With its knowledge of payers’ expectations and advanced claim-scrubbing software, a good medical billing service should immediately reduce the rate of your claims’ denial or rejection by payers. Look for a first-pass claims rate above 95% to be sure you’re partnering with an effective RCM service.
  • Patient statements and follow-up: Medical billing services don’t just deal with insurance companies; they also manage your patients’ statements. Whenever a patient owes money out of pocket and hasn’t paid in your office, your medical billing service will send them a statement explaining their bill. If the bill goes unpaid, the billing service will follow up with the patient. In extreme cases, a medical billing service may even refer unpaid accounts to a collections agency.
  • Detailed financial reporting: Many medical billing services capture all the data related to your claims and couch it in easy-to-filter reports. The level of reporting and the usefulness of the visualizations vary by company, but this full accounting of your practice’s finances can be extremely helpful.
  • HIPAA compliance: By law, medical billing services must comply with the Health Insurance Portability and Accountability Act. Any sensitive patient data required for coding claims and billing must be secure at all times, both at rest and in transit. Many medical billing services work directly within your practice’s healthcare IT platform, leveraging the same security measures you trust on a daily basis.

While outsourcing isn’t right for everyone, it can help medical practices that are having trouble operating the back office smoothly. Best of all, a good medical billing service can improve your overall cash flow.

Did You Know?Did you know

Outsourcing your medical billing operations could reduce the burden on your team and free up resources for you to direct elsewhere. When choosing a billing service, you should request a breakdown of its RCM process in writing to confirm that it handles every aspect of billing that you need.

Outsourced RCM vs. In-House Billing

Whether you should contract with a medical billing service or keep your billing in-house depends 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 4% to 9%. This should give you 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 in terms of the number of patients the practice serves. For larger practices and hospitals, a billing service may not be worthwhile if they have the budget for medical coders, a large volume of claims and the resources to handle them internally.

TipBottom line

If your in-house medical coding and billing is inefficient or can’t keep up with your claims volume, hiring a medical billing service to support even just a portion of your billing needs could be the answer. You don’t necessarily have to outsource 100% of your billing operations.

How Does Medical Billing and Coding Help Increase Cash Flow?

A dedicated medical billing and coding department can improve your practice’s cash flow by reducing the time a claim spends in accounts receivable, a metric referred to as “days in A/R.”

First-Pass Claims Rate

Many RCM services focus on reducing days in A/R by coding clean claims and scrubbing them for errors with the same or similar rules that clearinghouses use. This improves the chances that a claim will move through the clearinghouse to the payer and be reimbursed on the first pass. The rate at which claims are approved and paid after the first submission is known as a medical billing service’s first-pass claims rate or clean claims rate. This is a critical element of choosing a service: The higher a company’s first-pass claims rate is, the better.

However, not all services track clean claims rates in the same way. Some companies only tally a “clean claim” if it was accepted and paid. Others factor in unpaid claims that were not denied, inflating their first-pass claims rate. Ask a company for clarification on how it tracks its clean claims rate before basing your decision on that rate.

Faster Payments With Denial Management and Follow-up

Medical billing services can also expedite the revision of rejected or denied claims. When a payer rejects a claim, it is usually due to a clerical error. Once edited, the claim can be resubmitted for payment. Good medical billing services keep close tabs on rejections and denials, acting swiftly to revise any errors and ensure timely payment.

Sometimes claims sit with a payer for a while without any response. In these cases, medical billing services follow up (sometimes rather aggressively) to get the payer to respond. This often results in faster approval and reimbursement. In other cases, it results in a denial or rejection; however, that also gives the billing service the opportunity to revise and resubmit the claim.

Each of these elements of an RCM service contribute to downward pressure on the days in A/R, which means you get paid sooner for the services your practice has rendered, keeping your cash flow regular and healthy.

Medical Billing Services FAQs

The answers to these frequently asked questions can shed additional light on the medical billing services space.

The medical billing process is complex and involves several third parties. However, it breaks down to these general components:

  1. The medical biller generates and codes claims based on clinical data.
  2. The claims are scrubbed (manually or using an automated system) and edited if any errors are found.
  3. Claims are transmitted through clearinghouses to the appropriate payers (insurance companies, Medicare and Medicaid).
  4. When payment is received, the billing service posts it to the practice’s account, minus the service’s percentage fee.
  5. If a claim languishes unpaid, the medical billing service follows up with payers.
  6. If a claim is denied, the medical billing service revises and resubmits the claim, tracking it until it is paid.
  7. All financial data is stored for reporting, sometimes directly within the client’s practice management system.

The process also includes tracking patient balances owed and following up on unpaid accounts. In some cases, the medical billing service will refer the balance to collections.

Medical billing services should be secure and HIPAA compliant. They should also employ certified medical coders and billers, preferably with years of experience in the industry. Some medical billing services also offer access to their EMR systems and practice management software as part of the percentage costs. If you need those platforms, bundling them with a medical billing service could be the way to go.

Before signing up with a medical billing service, ask for a sample contract or operating agreement in writing that spells out the percentage of collections you will be charged and the responsibilities of both the billing service and your own practice. You should also seek out practices similar to your own and request recommendations of medical billing services they’ve successfully used.

Outsourced RCM is right for some medical practices but not for others. If you find that your claims are going unpaid or you are receiving a high rate of rejections, you should consider partnering with an experienced medical billing service. Additionally, if the cost of a medical billing service is lower than that of maintaining full-time coders and billers on your staff, outsourcing is likely the right choice.

For patients whose payer is Medicare or Medicaid, the 72-hour rule governs the period before hospital admissions. Any outpatient diagnostic or other medical services that occur within 72 hours prior to hospital admission must be billed alongside hospital costs. Any RCM companies you hire for your practice should be familiar with this rule.

What to Expect in 2024

Through 2032, the worldwide medical billing outsourcing market is expected to grow at a compound annual growth rate (CAGR) of 13.23%, according to Spherical Insights. This reflects an increasing tendency for solo practitioners and small medical practices to outsource their medical billing as a way to reduce their overhead and eliminate labor-intensive, in-house billing operations. In fact, Spherical Insights also found that the medical billing service industry is projected to reach a market value of $41.9 billion by 2032. In short: In 2024, a growing number of medical practices are expected to outsource their medical billing to third-party services.

As technology improves, so do medical billing services’ offerings. Automation has been a key driver of growth in recent years, streamlining not only in-house medical billing operations, but also the way practices work with third-party RCM providers. It offers new opportunities for medical billers to quickly and easily scrub claims and submit them through clearinghouses to payers.

For example, practices and medical billing services often automate the creation of superbills. They may also automate the processes through which they verify that a superbill’s coding is accurate and billable. Claims transmission and patient statement generation may also be automated.

Additionally, Outbound AI has recently introduced generative AI technology to lessen billing staff administrative tasks. Through this technology, which includes ChatGPT, staff can more easily manage denials, process EOBs, and verify eligibility and benefits.

New technological developments also raise questions about data security, which may be a prominent concern given the Arietis Health data breach announced in October 2023. This breach resulted in patient data such as medical information and Social Security numbers being sold on the dark web. Another breach — this one a suspected ransomware attack against UnitedHealth Group unit Change Healthcare in February 2024 — may increase the focus on cybersecurity. Expect your medical billing service to fortify its digital security in tandem – and encourage you to do the same.

Additionally, medical billing quality may rank next to security in importance. That’s because a December 2023 study found that 62 percent of U.S. hospitals failed to meet at least one of three key medical billing standards: timely itemized patient statements, hospital legal action on unpaid patient bills and patient access to qualified billing representatives. Expect medical billing services to prioritize all these measures for hospitals and smaller health systems alike in 2024.

Modern medical billing software and services also allow healthcare organizations to personalize the patient experience in how they deliver statements and capture payments. Many services have begun implementing payment plans and other useful features to improve the patient experience. Expect more RCM providers to follow suit and double down on the trend of personalizing billing on a patient-by-patient basis.

Medical billing teams may also be expected to prioritize transparency throughout 2024 in response to both consumer and legislative concerns. For example, in Texas, Gov. Greg Abbott recently signed a bill mandating that hospitals not send patients to collections without first providing clear, itemized invoices.

Additionally, one consumer filed a complaint to Colorado’s Division of Insurance regarding a medical billing error that could affect tens of thousands of people. National news outlets have reported on this story, suggesting that transparency in medical billing will be of paramount concern nationwide in 2024.

In Minnesota, the Attorney General’s office has been holding public listening sessions about medical billing. These sessions are occurring as part of an investigation into the medical billing procedures of the health systems Allina Health and Mayo Clinic. This investigation suggests that medical practices and their billing teams must prioritize a positive, transparent patient experience in 2024.

Similarly, the No Surprises Act – implemented in 2022 to safeguard patients from unexpected medical bills – came under scrutiny in 2023. Namely, when a federal district court invalidated part of the law, the American Medical Association voiced its support for this decision. However, in July 2023, federal executive agencies requested that the court reverse its ruling.

By the end of November 2023, close to 30 public companies had deemed the No Surprises Act a risk. The law’s exact provisions may thus shift over the course of 2024, and medical billing requirements may change in tandem.

Given the contents of the Biden administration’s February 2024 progress report, changes to the No Surprises Act should be all but expected. According to this report, in over 80 percent of court-mandated, Act-related decisions, insurers paid more money to out-of-network providers than the equivalent costs for in-network providers. Additionally, the three federal agencies that jointly oversee the Act’s enforcement are spending more time doing so than planned. These findings may necessitate changes to the Act and its enforcement.

Medical billing services should also be ready to accommodate potential changes to Medicare. For example, the U.S. Centers for Medicare and Medicaid Services (CMS) expanded Medicare dental coverage in 2023, continuing into 2024. This expansion mandates that Medicare Parts A and B cover dental services key to patient treatment and disease outcomes. It also covers a broader set of circumstances, such as treatment to eliminate infections before organ transplants and some cardiac procedures. Billing services must adapt to such coverage shifts to be effective.

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Leah Zitter, Senior Analyst & Expert on Business Strategy
Leah Zitter's long-held passion for psychology and science led her to not only a doctorate but a career covering emerging technology in healthcare and related sectors. Her expertise has been trusted by The Centers for Disease Control and Prevention, and her analysis of medical software has proven invaluable for medical practices. Zitter has also studied SaaS and analytics more generally on behalf of clients like Google, Microsoft, Amazon Web Services and more. She also contributed to the book "Strategize Up: The Simplified Blueprint To Scaling Your Business."
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