Outsourced medical billing for small practices

When outsourced medical billing makes sense for a small practice

In a small practice, billing usually depends on one or two people. Sometimes that’s a dedicated biller. Often it’s an office manager who also runs scheduling, payroll and the phones, or a physician catching up on claims at night. That arrangement can work for years, and then it stops working all at once.

Outsourcing tends to make sense when you see one or more of these signs:

• Billing depends on one person. When they’re sick, on vacation or gone, claims stop going out.
• Denials sit unworked. New claims get submitted, but nobody has time to appeal the ones that come back.
• Over-90 A/R keeps growing. Old balances pile up because current work always comes first.
• You’re adding a provider or a location. Volume grows faster than you can hire and train.
• A provider is doing the billing. That’s expensive clinical time spent on administrative work.
• Nobody knows the numbers. If no one can tell you your denial rate or days in A/R, no one is managing them.

If claims go out on time, denials are worked and your biller is staying, you may not need to change anything. Our comparison of in-house vs outsourced medical billing covers the cases where keeping billing in-house is the better call.

What changes for the front desk

Outsourcing billing leaves the front desk with plenty to do. Many claim problems start at check-in, and they still have to be fixed there. After the switch, your staff will usually:

• Keep capturing accurate demographics and insurance details, including a new copy of the card whenever coverage changes.
• Collect copays and known balances at the visit. Money collected at the counter is far cheaper to collect than money chased by statement.
• Make sure encounters are closed on time. The billing team can only submit what providers have signed and coded.
• Pass along payer mail quickly. Paper EOBs, checks, refund requests and records requests need a fast route to the billing team.
• Use one channel for questions. A shared task list or ticket queue works better than scattered emails and voicemails.

What should disappear is the time your staff spends on hold with payers, posting payments and chasing denials. If the front desk is busier after outsourcing than before, the handoffs need fixing.

Risks of outsourcing billing, and how to manage them

• Losing visibility. Require monthly reports on collections, denials by reason and A/R aging by payer, and review them with the vendor. Keep your own logins to your practice management system and clearinghouse.
• Data security. A billing vendor handles protected health information, so HIPAA requires a signed Business Associate Agreement. Ask how access is granted, logged and removed when staff leave. The same questions apply to US-based and offshore teams.
• Slow communication. Put response times in writing and name one account contact. If the team works in another time zone, ask which hours overlap with yours and how urgent questions are handled.
• Unworked denials. Some vendors submit the easy claims and let the hard ones age. Ask each month how many denials were appealed, how many were written off, and who approved the write-offs.
• Lock-in. Read the termination clause before you sign. You should be able to leave with your full claims history.
• Transition gaps. Claims can fall between the old process and the new one. Agree on a cutover date and on who owns claims submitted before it.

What a small practice should keep in-house

• Ownership of your systems and data. Your EHR, practice management system and clearinghouse accounts should stay in the practice’s name.
• Patient financial conversations. Estimates, payment plans and hardship decisions affect patient relationships, and your staff should own them.
• Clinical documentation and code selection. Providers document and choose codes. A good billing team flags problems and sends queries when the note and the code don’t match.
• Approval of write-offs and refunds. Set a dollar limit above which the vendor needs your sign-off.
• Payer contract decisions. The vendor can show you which payers underpay or deny most. Whether to stay in network is your decision.

What the first months of outsourced billing look like

Expect a setup period. The billing team needs access to your systems, payer enrollment details, fee schedules and any open denials, and the clearinghouse connection may need to be updated. The first few weeks usually go to getting current claims out on time while the existing backlog is sorted by age and value.

Plan for some extra staff time while everyone learns the new handoffs, and hold a short weekly check-in for the first month or two. After that, a monthly review of the reports is usually enough to keep both sides honest.

Choosing a billing partner for a small practice

Small practices can end up treated as small accounts. Ask who will actually work your claims, how many other practices that person covers, and whether you can talk to them directly. Ask how they handle the denials common in your specialty, and ask for a sample monthly report.

Then judge the arrangement on numbers you can check yourself: claims submitted within a few days of the visit, denials worked and appealed promptly, and an over-90 balance that shrinks over time. Our claims and denial management service is built around taking each denial to a decision: corrected, appealed, or sent back to you when the fix is on the practice side.

Find out where your claims stand first

Before deciding anything, get a clear picture of your current A/R. Our free A/R audit looks at ninety days of claims by payer, provider and denial reason, and the findings are yours to keep even if you decide to stay in-house. Request your free A/R audit.