Is it time to outsource your

Joebilling?
Macies, CEO
Virtual OfficeWare Healthcare
Solutions

1.888.950.0688, option 3
info@vowhs.com

www.vowhs.com

Virtual OfficeWare Healthcare

Solutions

A GE Healthcare Centricity Practice Solutions partner,

providing best practice solutions fitting the needs of
todays healthcare professionals.

Specialize in EHR and Practice Management technology

Provide full service resources that include software

implementation, personalized training, custom
development and 100% U.S. based help desk support.

Agenda

Factors to Consider in Outsourcing

Advantages and Disadvantages of Outsourcing

Hypothetical Example

Factors to Consider in Selecting an RCM Company

Q&A

Is it time to outsource your

billing?
One of the many business questions physicians face is
whether to outsource their medical billing to third-party
medical billing services or do it in-house with medical
billing software.

Factors to Consider
1. Your billing process is inefficient.
If youve been watching your collections drop while
the time to collect increases, you may have issues in
your billing department. Outsourcing to a third-party
billing service typically decreases the number of
rejected claims and decreases the time it takes to
receive payment from a payer.

Factors to Consider
2. You have high staff turnover.
. Turnover

is an issue in any industry but turnover in a

providers billing department is especially damaging.
Claim processing is the economic life blood of a
practice and a new addition or replacement in the
billing department will inevitably lead to slowdown in
the processing of claims.

Factors to Consider
3. Youre not tech savvy.
. Keeping

your billing in-house will require an investment

in practice management software. Add in training for
your staff and the significance of this investment
becomes clearer. If you dont want to deal with software
upgrades and occasional technical issues, outsourcing
is probably a good choice.

Factors to Consider
4. Youre a new provider.
. New

providers have plenty to learn and worry about

aside from their billing. Outsourcing their billing right
off the bat can give them much needed relief from the
day-to-day stress of launching a new practice, without a
trial by fire in hiring, training and managing employees.

Factors to Consider
5. You have different priorities.
. Many

doctors are not strong on the business side of

running a practice. They became doctors to help
patients not worry about the administrative/clerical
side of the business. Outsourcing the billing process
eliminates the hassle and frees doctors to concentrate
on patients.

Factors to Consider
6. ICD-10

While the formats of the codes are similar formats, they are substantially
different for the new set.

Affects Medicare and Medicaid claims & also anyone else covered by
Health Insurance Portability Accountability Act (HIPPA).

Huge learning curve & time-intensive for your staff and very costly.

The AMA has estimated cost range from $56,639 for small practices to
millions of dollars for larger practices.

Medicare and Medicaid has estimated denial rates 100-200% higher than
normal. How many practices can sustain those type of denial rates?

Factors to Consider
7.Cost
. For

many practices, the outsourcing decision boils down

to one factor: cost.

Advantages of Outsourcing
More

focus on core business Patient Care

Complex
Fewer

technology

billing errors

Improves

cash flow

Increases

revenue

Economies
Pay

of scale

on collected revenue only

ICD-10
Better
Cost

trained specialists

Disadvantages of Outsourcing

Less control

Potential HIPAA Privacy and security breaches

Possible hidden costs

No flexibility

Contractual misunderstandings

Not focused on collecting all the money

Contractual commitment. Divorce can be messy

Cost

Hypothetical Example

. For

many practices, the outsourcing decision boils down

to one factor:
. To

cost.

help compare the costs of in-house billing versus

outsourced billing, weve created a hypothetical, threephysician practice.

Factors to Consider

Here are the characteristics of this practice:

Three primary care physicians;

Two medical billing specialists;
80 insurance claims filed per day (~20,000 per year);
$125 billed per claim on average (~$2,500,000 per year); and,
We assume that the billing service has a high collection rate on
claims.

Factors to Consider

Selecting an RCM Company

Cant manage what you cannot measure

Establish performance criteria reporting data, (WIP, AR, Rejections,

Resubmissions)

Risk sharing payment terms based on outcomes/results. Baseline plus

bonus and penalties. (e.g. % billed vs. % collected, AR aging, amount in
WIP)

Vendor experience with your billing system

Vendor experience with your specialty

Roles and responsibilities outside of RCM

Factors to Consider
Medical

billing service isnt a silver bullet for inhouse billing issues.

Billing

services can vary widely in their efficiency

and accuracy when processing claims.

If

a provider chooses a billing service that is lax

and prone to errors, the headaches surrounding
billing issues wont get better theyll get worse.

Which Approach Should I Choose?

Its important for a practice to factor in their individual costs

and preferences when deciding whether or not to outsource
their medical billing.

In an apples-to-apples comparison, we found that

outsourcing had the higher net income.

However, cost isnt the only issue practices should consider.

There are plenty of other factors involved in this business
decision that may be as if not more important than costs.

Questions?