Medical billing has gained more attention in recent years as the demands of healthcare overburden hospitals.
Unfortunately, health insurance companies are notoriously slow at paying, and that causes problems for everyone else in the industry.
While billing can be tedious and time-consuming, clearly implementing procedures and processes to help keep excessive charges can help eliminate bad debts.
With so much to focus on, you need someone who can handle this for you. This is where outsourcing becomes an attractive option.
There are different types of medical billing that will help streamline your operations. This article will feature medical billing, its types, common services, and the advantages of outsourcing medical billing.
What is medical billing?
Medical billing is the process of submitting a claim to an insurance company for payment. The claim will include all of the services performed by the healthcare professional and information about the patient.
This is considered a complex practice that requires significant knowledge of the various types of insurance plans and how to submit claims for reimbursement properly.
Medical billing professionals ensure that claims are submitted promptly and accurately and comply with regulations set by payers (insurance companies) and third-party organizations.
This practice has been around since the beginning of health care, but it has become more complex as medical practices have evolved.
According to Grand View Research’s latest study, the global medical billing outsourcing market was valued at USD 11.1 billion in 2021. It is projected to reach a compound annual growth rate (CAGR) of 12.0% by 2030.
Today’s practices are larger, more specialized, and more complex, so additional staff members who specialize in medical billing are needed.
How outsourcing medical billing works
Outsourcing medical billing is an increasingly popular option for small institutions that don’t have the resources or expertise to handle their own billing.
Typically, outsourced medical billing companies work with insurance companies that provide them with forms and detailed reports on claims they submit on behalf of their clients.
When healthcare facilities outsource all types of medical billing tasks, they hand over all of the responsibilities to a professional team of industry experts.
This is a great way to manage the practice’s billing functions, especially if they don’t have an internal staff member who can handle this task.
3 main types of medical billing systems
Medical billing systems are used to track and process patient payments. There are several different types of medical billing systems, each with its own unique features and benefits.
Here are the three main types of medical billing systems:
Closed medical billing systems
Closed medical billing systems are the most common type of medical billing system used today. These types do not allow any changes or additions to the system once it has been installed.
The information contained within these systems is static and does not change over time. With this type of system, all they need to do is input data into the software and then print out the invoice.
Small practices and solo physicians often use closed systems to manage their own billing, collections, and accounts receivable processes. The major drawback of this type is that it does not allow for data sharing or communication between providers or patients.
Open medical billing systems
This type of medical billing allows for changes and updates to be made over time as needed. Thus, making them more flexible, yet it requires more maintenance from the company that installs them.
Open medical billing systems enable healthcare facilities to accept claims from out-of-network providers. Submission of claims will be electronically through their HMO or PPO network with minimal intervention from the third-party administrator (TPA).
Moreover, It allows institutions to integrate with other software programs to make sure that everything is properly tracked and documented.
Isolated medical billing systems
Isolated is a type of medical billing system used by many small hospitals and clinics that only see one type of patient at one time (such as pediatricians).
In this kind of system, all patients are treated equally regardless of insurance coverage or ability to pay out-of-pocket costs. These are stand-alone software programs that handle only one type of insurance, and only one type of provider, such as a hospital or doctor’s office.
They are not integrated with other systems or applications, so the information has to be manually entered into other software applications for analysis. This makes it difficult to keep track of the data and make sure that everything is up-to-date.
Common types of medical billing services
Medical billing services help medical facilities manage their practice operations by providing them with tools, technology, and expertise for efficient claims management.
They can outsource these tasks to third-party organizations that specialize in such operations to save money and time. The common types of medical billing services include:
This is the process of sending a claim to an insurance company or government agency within a specified time frame for reimbursement purposes.
Claims submission services can be outsourced to an outside agency to do this work, although some may have the staff in-house to handle it directly.
Claims scrubbing and verification
This type of medical billing service involves reviewing submitted claims for errors before they are sent out. It also includes verifying whether the patient has met his or her deductible amount before submitting claims.
When a claim is received from an insurance company, it usually contains errors that need to be corrected before the claim is paid.
These errors typically include missing information (such as dates), incorrect amounts, or other problems that must be fixed before payment can be made on the claim.
Both claims scrubbing and verification are essential to maintaining good relationships with insurance companies.
Claims appeals and denials
Claims appeals are when a patient’s insurance company denies coverage for a particular service or treatment that was provided by a doctor or other healthcare provider.
On the other hand, claims denials can occur because of incorrect coding on a patient’s claim form or because their insurance policy did not cover them.
The appeals process can be complicated, but some medical billing services provide templates and instructions on how to appeal claims so that patients can do it themselves.
Account receivables (A/R) Follow-Up
Account receivables are the money owed by patients who have not paid for services rendered by their physician or other health care provider.
Outsourcing this type of medical billing can help institutions follow up with patients who have outstanding balances on their accounts. These services often include contacting patients by phone or mail and reminding them about unpaid bills until payment is made.
The first step in the billing process is to check whether or not the patient has already paid their bill. The medical practitioner will receive payment from insurers, government agencies, or other payers and deposit those funds into their bank accounts.
This type of medical billing service ensures that payments are sent to patients in accordance with the agreed-upon schedule and that they arrive at the practice on time.
Revenue cycle management
Revenue cycle management (RCM) is an umbrella term used to describe all activities involved in collecting payments. Payment collection covers patients who have insurance coverage as well as those who are self-pay patients.
RCM includes tasks such as coding, billing, and reimbursement follow-up procedures for each claim submitted by a physician’s office or practice.
This is one of the types of medical billing services that can help prevent claims from being rejected due to missing information later down the line.
With revenue cycle management in place, it helps practices manage their collections and complete their billing cycles without any hiccups.
Why should you outsource these types of medical billing?
Medical billing outsourcing is an option that many medical practices consider when they have a high volume of patient bills to process.
Here are a few reasons why you should consider outsourcing these types of medical billing:
Fewer billing errors and ensure compliance
With so much documentation required for each patient visit or procedure, it’s easy for simple mistakes to be made when entering data into the system.
In fact, Becker’s Hospital Review reported in 2017 revealed that approximately 80% of medical bills contain errors. These mistakes can lead to incorrect charges being billed to patients or payments being delayed or denied altogether.
Outsourcing medical billing can help reduce these kinds of errors by using an experienced and dedicated team specializing in all aspects of healthcare payment processes.
If an institution wants to save money and reduce expenses, then outsourcing these types of medical billing is a good way to go.
The outsourced provider will handle all aspects of the process, including sending out bills, collecting payments from patients or insurance firms, filing claims, and performing audits.
Hiring an outsourced medical billing provider will allow organizations to focus on their business while saving money in the long run.
Increased control and transparency
Medical billing is a key part of running a medical practice. Organizations need to know how much money they’re bringing in each month to manage their finances accordingly.
With an outsourced solution, they’ll have access to real-time information on all incoming payments and transactions. Firms can keep track of what’s happening with the business at all times.
In addition, outsourcing gives them complete control over their finances and how they are processed.
Improved cash flow and revenue
Outsourced medical billing companies are efficient and provide their clients with a fast turnaround time for filing claims.
For many small businesses, cash flow management can be challenging because they lack the resources or expertise to handle it themselves.
An outsourced solution will help ensure that they have access to the best practices for managing cash flow so that it can focus on its core operations.
With all these advantages of outsourcing medical billing mentioned above, you won’t have to worry about a single thing. You will be able to focus on other important aspects and increase efficiencies while improving your bottom line.