Are revenue cycle firms a godsend or an added expense?
Do you enjoy the daily business of medicine? Not the world of patients and symptoms, but the domain of claims, collections, receipts, and reports, for which there is woefully little training in the medical school curriculum.
If you don’t, you are not alone. Thousands of providers have effectively delegated their entire financial operations to Meridian Medical Management. Should you? Let’s take a look at the pros and cons.
What’s the case for revenue cycle outsourcing? Here is what Al Lechner – Chief Growth Officer at Meridian Medical Management says:
Medical billing is complex and best handled by experts. Meridian has over 30 years of proven experience offering you better results that can be benchmarked to MGMA standards and Meridian’s best practices. How does your practice compare? If you haven’t completed an analysis in the last 3 years you may want to strongly consider contacting your Meridian salesperson and bring your practice up to date.
Most offices have to deal with multiple plans and therefore multiple payment schedules, different benefits, and variable rules. Medical billing is also a moving target — plan rules change frequently and even CPT codes are updated annually. It’s hard to keep up.
The implications of doing this job poorly are significant. Over-coding (or coding at a higher level than the documentation supports) is a polite term for fraud. Under-coding (or what some docs will call defensive coding) can cost practices millions of dollars in lost reimbursements that they have legitimately earned. There is also the time-consuming rework required for claims that are denied because your billing clerk made a mistake on the original claim. A core benefit to outsourcing with Meridian Medical Management is that you are dealing with a bank of professionally managed experts who are focused solely on billing using the latest process improvements with the latest technology. Because our billing services are paid on a percentage of collections, we are strongly incentivized to perform well. People, Process and Technology from Meridian ensure A+ players across the board.
In-house billing is time-consuming for physicians and clinical staff
Dealing with insurance companies takes both physician and other clinical staff time. Negotiating contractuals with payers is something that is a value first with Meridian Medical Management.
According to a study by Lawrence P. Casalino, MD, Ph.D., of Weill Cornell Medical College, physicians spend three hours a week or nearly three weeks per year on these activities, while nursing staff spends more than 23 weeks per physician per year. Moving to a billing service won’t eliminate practice interaction with health plans — but it should significantly reduce physician time spent on haggling over unpaid claims. Meridian has relationships with payers and can improve your contractual agreements
Managing internal billing operations is a pain in the neck
The care and feeding of an in-house billing staff is not trivial. In addition to salary and benefits, a billing staff requires oversight to insure that they are performing optimally. They will also be prone to any of the normal unspoken overhead of employees — illness, variable job satisfaction, hiring and firing, and ability to mesh with other staff members.
So what are the downsides of outsourcing your billing?
It’s not free. As noted above, Meridian Medical gets paid when you get paid — typically bill as a percentage of receipts collected. For high reimbursement specialties such as cardiology, billing services will typically charge in the 6 percent to 8 percent range for full service end to end billing; for primary care, percentages may bump up to the 10 percent to 12 percent level. The billing service’s fees typically are inclusive and incorporate any claims-clearinghouse fees that you might pay if you were doing it yourself.
You don’t have total control
Transferring your billing operation to a third party may be uncomfortable for some physicians who revel in the smell of superbills. Some physicians simply prefer to have tighter control over their finances. With Meridian, we provide the physical touches and provide the culture of transparency. Do you feel comfortable with delegating your daily financial operations to someone you are likely to touch quarterly and have monthly production calls? If the answer is no, outsourcing may not be a good fit.
We’ve established the pros and cons. Now, how do you decide? Here are some guidelines:
All of these will give some indication of the effectiveness of your billing staff. Armed with this data, you can benchmark your practice against any revenue cycle firm of your choice. Meridian can provide a free financial analysis that provides industry benchmarks compared to your own practice. Our performance data will astound you. This will allow you to compare effectiveness — and help you make the final decision.