Delayed payments and denied claims cost billions to medical practices every year. Regardless of whether it’s due to inappropriate codes or missed due dates for claim submission, physicians lose a major share of their income due to lag in the billing process. This loss of revenue increases when you think about the number of unpaid patient bills that burry down with passing time and are never followed up. This is why a number of medical practices employ professional medical billing companies to handle their billing.
It not only improves the billing process, increases revenue but also sets medical practices free from a burdensome task. But what is the cost? What percentage of these medical billing companies charge medical practices?
The medical billing process begins with patient registration and when the billing staff checks the eligibility and enters insurance information. As soon as the patient is registered, it is analyzed that what services would be covered by the insurance provider and what the patient would copay. After the patient checkout, medical bills are prepared by entering the corresponding ICD and CPT codes. Claims are submitted to relevant entities for clearance. This is further followed up with adjudication and negotiations and ends with payment collections. The process is the same for almost all medical practices but involves rigorous working and follow-ups that only a professional medical billing company can handle with consistency.
Medical Billing Services Cost
It is usually presumed by small practices that by keeping the billing resources in-house they can save cost. However, it proves vice versa, when most of the internal resources underperform and miss their collection targets. Outsourcing billing to a professional medical billing company is affordable in various ways. Medical billing companies provide a number of services to medical practices which include: insurance eligibility checks, Front desk management, ICD & CPT coding, charge entry, claim submission, payment posting, AR follow-up, denial management, and collection reporting. For these services, medical billing companies charge differently depending on the scope of services and type of medical specialty. Usually, medical billing companies charge
- Per claim rate, or
- Hourly rate
It looks daunting to share even a small portion of your collections with an external services provider but it pays back in various other ways. Most of the medical billing companies charge a certain percentage of collections which is on average between 5 to 10 percent which changes depending upon the volume and types of cases. Let’s say if a medical billing company collects $50,000 on a monthly average for a medical practice and agrees to charge the practice at the rate of 7 percent. Then the billing company is taking a small share of $3500 and the practice earns monthly revenue of $46,500 when managing all those outsourced tasks can incur more operational cost if managed in a facility.
Small practices that do not have a consistent monthly billing cycle and their patient turnover remain low. Such practices usually prefer per claim rate when they employ a medical billing company to manage their billing. They decide a certain dollar rate, which is usually $5 to $10 per claim, with the billing company.
Some medical billing companies agree to provide services on an hourly rate to those practices that want to remain linked with the billing process and only want to outsource to quality teams. Such practices actually want external teams to work remotely for them. So, they pay hourly rates to billing companies and lend their resources to work as an external team.