5 Common Mistakes in Choosing Medical Billing Outsourcing Services

For healthcare facilities and solo practitioners, outsourcing medical billing and coding can be a strategic move to streamline processes, improve revenue, and ensure compliance with ever-changing regulations. This transition often comes when billing issues arise, revenue starts declining, administrative burdens increase, or compliance requirements become overwhelming. By outsourcing, practitioners can focus on patient care, while specialized billing companies handle the intricacies of billing and revenue management.

However, selecting the right medical billing partner can be complex, and many healthcare providers fall into common pitfalls during this decision-making process. Here are five mistakes often made when outsourcing medical billing services and how to avoid them.

1. Not Fully Understanding the Practice’s Needs

One of the first missteps many healthcare providers make is not accurately assessing their practice’s billing needs. Medical billing companies often specialize in different account sizes and practice types. Some cater to large practices with complex billing needs, while others focus on smaller practices with fewer patients and simpler billing structures.

To avoid this mistake:

• Evaluate the scope of your practice: Consider your practice size, the range of services offered, and the number of physicians on staff.
• Consider your budget: Understand your financial capacity and limitations, as it will help narrow down the list of prospective outsourcing partners.
• Identify your payor mix: Ensure the billing company has experience handling the types of insurance companies you commonly work with. American Medical Billing Association is a good resource for more details on billing needs by practice size.

Based on your needs, there are generally three types of medical billing companies to consider:

• Small Practice Billing Services: These companies cater to small practices with fewer patients and data volumes, offering a more personal, one-on-one service.
• Physician Practice Management Firms: Equipped for larger volumes, these firms can handle extensive administrative and billing duties but often come at a higher price.
• Professional Billing Companies: Larger, more established companies offer advanced features, comprehensive support, and expertise in handling complex accounts. However, these also tend to be more costly.

2. Overlooking Key Performance Indicators (KPIs) and Value-Added Services

Many providers are lured by additional services or low prices but forget to assess the quality and performance metrics that truly indicate the success of the billing company. KPIs such as claim acceptance rates, denial management, and payment turnaround times are crucial to ensuring billing effectiveness and efficiency.

To avoid this mistake:

• Check for transparent reporting: The billing company should provide detailed reports on billings, collections, denials, and success rates.
• Ensure regulatory compliance: Verify that the company adheres to standards like HIPAA and employs security measures to protect patient data.
• Assess their industry expertise: Look for companies with specific experience in your medical specialty to ensure they understand your coding requirements, common denials, and appeal processes.

Also, value-added services, like patient insurance verification, online payment systems, and claim tracking, can significantly enhance billing efficiency. Select a company that offers these without compromising on core billing quality.

3. Neglecting to Craft a Thorough, Well-Defined Contract

Jumping into a contract too quickly is a common mistake when healthcare providers are eager to offload billing burdens. An effective outsourcing contract should go beyond service agreements to include protections, terms of liability, and clear service-level expectations.

To avoid this mistake:

• Review credentials and liabilities: Ensure the company has professional liability insurance and necessary registrations or permits.
• Define service level agreements (SLAs): Include specific performance standards, such as response times for billing inquiries, resolution timeframes for claims, and error rate limits.
• Clarify termination clauses: Make sure there’s an “escape clause” if the service quality deteriorates, and specify the resolution process for disputes or irregularities.

Seek legal guidance to carefully review the contract, paying attention to penalties, responsibilities, and cost implications. Clarify contacts for service issues, quality concerns, and dispute resolution. For more information on what makes a thorough medical billing contract, you can visit the Medical Group Management Association (MGMA) website.

4. Ignoring References and Client Testimonials

Relying solely on the company’s sales pitch or website testimonials can lead to an inaccurate perception of their capabilities. Contacting multiple references, especially from practices of similar size and specialty, is crucial for evaluating the company’s performance under real-world conditions.

To avoid this mistake:

• Request multiple references: Ask for contacts at similar-sized practices that the company has serviced to get a realistic understanding of their expertise.
• Evaluate patient interaction quality: Billing errors or delays can impact patient satisfaction. Ask about the outsourcing company’s responsiveness to patient inquiries and their handling of billing disputes.
• Inquire about past challenges: Discuss how they manage common issues, such as claim denials, appeals, and compliance, to gauge their problem-solving skills and adaptability.

Handling claim errors or discrepancies can slow down revenue, so choosing a reputable company is essential. Better Business Bureau is an excellent place to check for complaints and reviews of potential medical billing companies.

5. Selecting Based on Price Alone

While cost is a vital factor, choosing a medical billing company based solely on lower fees can lead to subpar service. Some companies lure clients with low upfront costs but lack essential industry experience or have hidden fees for additional services.

To avoid this mistake:

• Compare core and added services: Ensure the company’s offerings align with your practice needs. Some companies include features like claims follow-up or patient payment options, while others charge extra.
• Assess credentials and certifications: Confirm that the billing company has appropriate credentials for your medical specialty and complies with industry standards.
• Look beyond the sales pitch: Low prices should not compromise service quality, regulatory compliance, or transparency.

Choosing a company that aligns with your practice needs may involve a higher upfront investment but will likely yield better results and fewer headaches in the long run.

Conclusion: Choosing the Right Medical Billing Partner

Choosing the right medical billing outsourcing services is a strategic decision with far-reaching implications for healthcare providers. By avoiding these common mistakes, healthcare facilities and solo practitioners can choose a partner that will improve collections, reduce administrative burdens, and enhance patient satisfaction.

Looking for the ideal medical billing partner? HBHS is here to help. Our team is equipped with the latest protocols, compliance standards, and a deep understanding of your specialty’s unique billing requirements. With HBHS, you can be confident that your billing processes are handled by trained experts, allowing you to focus on delivering exceptional patient care.

Get started with HBHS today! Visit our website, HBHS Medical Billing Services, answer a few quick questions about your practice, and let us help you streamline your billing operations.