How to hire a Medical Billing Company without compromising these 17 Factors.

 Erika Regulsky Tags: , , , Billing & Collections, RCM

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Outsourcing your claims to a third party medical billing service can make or break your healthcare organization. A very good medical billing service will get you on the path to making tens or hundreds of thousands of dollars every month, but a company with ineffective practices could cripple any existing revenue your practice makes.

Here’s what I can say: the best billing service will never compromise on rates. If you’re seriously looking for a company who charges less than 4% from your monthly collections, chances are you’ll end up with a company who cuts corners and hurts not just your revenue but your practice in the longer run.

That said, a high percentage doesn’t guarantee you quality output. As long as you know what to look for in a medical billing service company, you should be able to find the right revenue partner.

Download this printable checklist of 17 factors that you should consider before choosing a medical billing company.

1.AAPC certified Coders:

The writing is on the wall. Novice coders won’t make the cut anymore. With stringent regulations, more complex coding guidelines and not to mention the sheer volume of codes it is no longer a choice to hire certified medical coders. To keep up with changing demands and pressures, hiring a certified coder is mandatory.


3 reasons why you must double click on certified coders:

  • AAPC/AHIMA certified medical coders offer coding specificity that results in improved reimbursement
  • Clinical documentation improvement forms the fulcrum of current healthcare regulations. A certified coder can help medical practices in CDI
  • Certified coders usually specialize in one particular specialty. This specialty specific expertise translates to increased coding efficiency

2. Is this your EHR? How does it work? (Run if your medical biller asks this question)

This cannot be stressed more. Before hiring a medical biller/ billing company make sure your EHR doesn’t flummox them. We recently worked with an ob-gyn center in California who were paying an astronomical sum of software despite investing in a full-fledged EHR. Our transition team came to know that the ob-gyn center was paying both for its eCW EHR as well as Office Ally. Turns out, the billing company they worked just couldn’t get the hang of eClinicalWorks. Hence the double costs at a time when medical practices are pressurized to lower their cost base!  

Heaven knows we’ve come across several instances where healthcare organizations have been forced to adopt multiple software, lose revenue or worse still enter data into their EHR because their medical billers don’t know the workarounds of their EHRs.


  • Quicker claims cycle and elimination of double work
  • Better ROI on EHR
  • Tightly aligned processes

3. Federal government compliance

You know what is worse than mind-numbing regulations? Being penalized for them.  Recently a health billing company based in NY exposed the health records of 270,000 patients. The breach was brought to light when the company issued a statement saying that after noticing suspicious activity at an employee’s workstation an investigation was conducted. 

The company that works with 70 healthcare professionals, revealed that patient data had been leaked. Broadsheets are filled with headlines of data security leaks and compromises. Verify whether the medical company you opt to work with is in compliance with federal norms. Data security promises must be combed through carefully before signing on the dotted line. Insist on an on-site visit, check with existing clients, ask your peers, hire detectives. Do whatever you can and a little more to ensure your medical billing company offers best in class data security. And also is in cognizance with government regulations.


  • Minimized risk of data security leaks.
  • Assured compliance with federal guidelines.
  • Some companies also offer MIPS, MACRA support

4. Technology- IT matters

According to a survey by BlackBook, the healthcare industry’s holy grail, an increasing number of healthcare organizations are looking to their revenue cycle vendors for technical know-how and expect them to be their revenue cycle technology partners as opposed to mere professionals who take care of their billing cycle.

Technology can have a direct and significant impact on the performance measures of medical practices.  Yet, very few healthcare organizations choose to work with medical billing companies who offer better tech options. HIMSS, Analytics Director Of Research, Brendon Fitzerglad had recently expressed that “it came as a surprise that more organizations have not automated the denial management process through a vendor-provided solution”.

According to an online survey by Recondo technology, 70% of survey respondents revealed that the cost of following up on a claim was $4. This is a shocking 33% higher than industry estimates.

To improve revenue outcomes over the long run, working with an RCM company who have the technical expertise to integrate patient billing, denial management, AR management, and put together the fragmented pieces of a healthcare organization’s revenue cycle into a cohesive whole.


  • Automation speeds up processes and cuts costs
  • By working with a technology enabled RCM company you can keep up with changing times

5. It all boils down to money

A survey by Peer60 states that 83% of hospital executives surveyed shared that cost was the major criterion in the revenue cycle vendor decision-making process. Healthcare organizations must prepare a complete budget before taking the plunge.

If you listen closely, the corridors of hospitals echo with stories of hidden costs, inflated bills and being let down time and again by their revenue cycle vendors.

A podiatrist was in for a rude shock when the customer support team of his EHR informed him that AR calling was not a part of the revenue cycle services package he’d signed up for. “More than 40% of my revenue was stuck in aging AR”, he rued.

Look for transparency. Look for options in the pricing table. Ask questions. Work with affordable revenue cycle management companies to lower operational costs.


  • Different pricing options give you the power of choice  
  • Fixed prices eliminate guesswork
  • There are no last minute nasty surprises

6. Stuck in the bronze age when it comes to managing AR?

A senior consultant with California-based Capko & Morgan, Laurie Morgan MBA says ” The aging of your practice’s AR is crucial to watch because the older bills get, the harder and more costly they become to collect. “When your AR slips and you have a very large backlog or balance, it can seem like you’ll never be able to tackle it,” she adds.

Manual work represents two thirds the operational cost of managing financial tasks. Adopting an AR management software drives down the cost of receivable management. Work with medical billing organizations who offer AR automation support. Why? Not only does it cut back on costs an AR management system serves as a continuous feedback loop for your medical practice. A standardized process can be easily monitored.

Automated AR processes engender an exception based workflow to improve performance and the ability to unify all segments of the AR management process.  The right AR automation solutions can also help healthcare executives to track KPIs and make course corrections.


  • AR processes are streamlined and accelerated
  • An AR system offers value-rich intelligence
  • Weeds out AR follow-up inconsistencies

7. Still handling denials the old way?

It is time to rethink denial management. A medical practice loses close to 3% of its net revenue due to denials. It costs a staggering $25 to work on a single denial. Do the math and you’ll know the amount of money that is lost due to denials can be a huge blow to your bottomline. What’s the point in working with a medical billing company who don’t offer denial management software? Your denial management process would continue to be on the hamster’s wheel.

Around two thirds of denials are recoverable and 90% of denials are preventable. Yet, this is hardly good news, as most RCM vendors do not offer full fledged denial management solutions. It can be a wild goose chase. But look for a vendor who offers a denial prevention and reporting system.

Automating your denial management process will mitigate risks to your revenue stream. It will help in methodically eliminating controllable write-offs. It accelerates the revenue recovery process and some vendors offer denial management systems that offer a clear window into the denial resolution process.


  • Long-standing issues with denials get resolved with automation
  • Denial patterns are easily brought to the surface
  • A vendor provided denial management solution reduces software costs

8. Patient experiences - The bottom line that matters

Specialty practices are dependent on new patients to improve financial stability. There is a strong shift to deliver care in outpatient settings for specialty practices. Referrals are playing a huge role in bringing new patients to a medical practice. Unfortunately, according to recent studies, 70% of referrals go unscheduled due to interminable waiting times and patient access functions that leave much to be desired.   

Revcycleintelligence mentions in a write up that according to a TransUnion report 68% of patients with medical bills of 500$ or less did not pay their bills in full in the year 2016. Look closer and you can identify the fault lines that sabotage your patient access functions. In a consumer-directed healthcare space patients account for a large portion of a hospital’s collections. Providing great patient experiences easily translate to a healthier bottom line.


  • Better patient experiences result in retention and positive provider-patient relationships
  • Improved front-desk revenue capture

9. Expand your horizons (with the right billing company by your side)

What happens when your medical practice is maxed out for growth? This is a quandry most medical practices face. There is a sudden and massive influx of new patients over the years thanks to recent healthcare reforms. There is a greater number of insured patients now. Most successful healthcare organizations are focusing on expanding their practices to handle the high volume of patients. And also to strengthen their presence and increase market share.

The medical billing company you work with should provide the ideal foil to your expansion plans.  Ensure they have a multi-state presence and also offer practice management support. Your revenue cycle management company should be able to help you achieve your business expansion goals. It must not just support but drive growth, offer specialty care solutions and optimize physician practice operations.


  • Centralized medical billing and revenue cycle management processes
  • The headache of paying multiple vendors is eliminated
  • Some billing vendors offer revenue cycle KPI tracking tools that can help you know which center is performing better   

10. Provider enrollment is no longer just an administrative task

There has been a phenomenal aggregation of employed providers in recent times due to an uncertain and volatile healthcare marketplace. Owners of small medical practices have downed their shutters and find it a safer bet to become an employee. An increasing number of providers are skeptical of starting their own practices.  

The shift to value based reimbursement and the propensity of healthcare organizations to sign risk-based contracts are also seen as major drivers behind this trend. Therefore there is a pressing need for healthcare organizations to employ additional resources to keep up with the increased workload.

Provider enrollment is no longer just a matter of getting providers enrolled with insurance carriers. To get reimbursed it is critical that hospitals manage their providers’ enrollment within risk based contracts. It is vital to work with a RCM provider who has a revenue centric approach towards provider enrollment. If you can have a dedicated team to handle the credentialing and provider enrollment process, it is half the battle won.


  • Enhanced revenue cycle performance under risk-based contracts
  • Quicker credentialing and provider enrollment processes

11. Stronger contracts = more revenue

Payer contracts inform and drive a healthcare organization’s day to day business. Managing it in an ad hoc way results in underpayments and inconsistencies. Your RCM company should offer advanced contract management solutions and risk mitigation support as your medical practice transitions towards newer payment models.

Contract management used to be just another administrative burden. With changing reimbursement models and complex payer mechanisms, payer contracts now form the backbone of a medical practice’s revenue cycle. Contract modeling abilities, root cause identification of poor performing contracts, constant monitoring of payment variances, micro and macro level analysis of your entire contract portfolio are just a few of the contract management capabilities to look for before working with a medical billing firm.


  • Strong contracts that improve yield
  • Protection against “evergreen” contracts

12. Transition support - The need of the hour

The transition to a new billing company is a journey that is fraught with tripwires. You need employee buy-in, you need to check whether they’ll wind down your legacy AR and of course there is the added complexity of ensuring they’re familiar with your EHR. To manage this tricky phase your medical company should come forward with a proper transition plan. If they don’t run in the opposite direction.

A proper transition plan should include a single contact person, a complete audit of your current revenue cycle, training for in-house staff and appropriation of responsibilities between your employees and the billing company. Some billing companies also offer temporary deployment of onsite resources to quicken and iron the wrinkles during the transition phase.

Recently, we couldn’t login with the EHR credentials provided by one of our clients. When quizzed about it we later learnt that their previous medical billing company had changed the password and refused to share the credentials as the physician group had transitioned to another billing company without fulfilling certain terms that were in the contract. After a bit of to and fro we were finally able to access the group’s EHR.


  • Avoid temporary revenue loss and fluctuations during the transition phase
  • Help in-house team to acclimatize to a new working environment

13. LRRA (Lost Revenue Recovery Audit) - Ask for one

The last thing you want is your new billing company to be a carbon copy of your current biller. What if they repeat the same mistakes? Don’t waste 3-6 months to find out whether the new billing firm is the right fit for you. List out your problem areas and ask your billing company to propose solutions or demonstrate expertise in handling similar bottlenecks.

There are several RCM companies that offer a thorough Lost Revenue Recovery Audit to identify fissures in your revenue cycle and provide clear-cut answers to your most challenging questions.

Ask for reports like:

  • Claim rejection report
  • AR report
  • Reimbursement velocity report
  • Charges vs payments report
  • Insurance payments vs patient payments
  • Pending claims
  • Top 20 paid CPTs report
  • Patient balance aging summary
  • Collection ratio
  • Non collectable AR report

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14. State Laws- Comply or die trying

There are several protocols that govern medical billing and each State has its own billing regulations. Balance billing by out of network providers in some States have more relaxed regulations than in others. In a heavily regulated industry it is essential to follow and comply with State specific legislative developments.

Incident to billing is another grey area that can, if not handled expertly, lead your practice into a vortex of allegations and legal repercussions. The billing regulations for physician assistants (PA) in each State differ vastly. It is important to analyze the context for PA practice within your State’s billing laws.

Under pressure to improve collection rates most medical billing companies flout the rules, unknowingly. Ask your medical biller whether they perform compliance audits. Little or no knowledge of your State’s billing laws means your medical biller/RCM company just isn’t the right choice.


  • Avoid non-compliance threats and penalties
  • Stay on top of billing regulations

15. Specialty-specific billing expertise is no longer a matter of choice

We recently worked with an urgent care centre that had a monthly collection of $320,000. Located in a bustling locality with 4 ER doctors on board, we felt that the collections of the urgent care practice could be a lot better. After a coding audit several issues bubbled up. Our coding audit team noted that external injury codes were used as primary codes and the claims were swiftly denied by insurers. Most of the procedures were incorrectly coded.

An ob gyn practice in Northern California faced similar coding issues. Modifier QW that is used to denote screening services was missing on most claims. The absence of this important modifier led to a high number of denied claims. Only later did the practice manager realize that their previous billing company didn’t have ob-gyn billing experience.

Not working with a medical billing company who are not well-versed in billing for your specialty means you are going to leave enormous amounts of money on the table.


  • Avoid revenue risks and medical coding errors
  • Specialty-focused services help you capture more revenue as the intricacies of billing for your field is well understood

16. Do they understand your payers?

Each insurer marches to a different drum beat. To gain maximum reimbursement medical billers should have intrinsic knowledge of the payment mechanisms of the insurance companies they work with. The urgent care centre I mentioned in the earlier point was repeatedly underpaid by Florida Blue but were blissfully unaware of it!

From prior authorization checks to the window for submitting denied claims the claim submission requirements and payment  guidelines are vastly different. The parameters and regulations are also updated periodically. Not staying abreast with them will impact your bottom line adversely.   


  • An understanding of payer mechanisms quickens contract cycles
  • There is more scope to negotiate favorable rates
  • Denials can be handled more efficiently if the biller is well-versed with the appeals process

17. Medical billing reports

Being in the dark about follow-up reports is unhealthy. You cannot set benchmarks or gain insights. Check whether your medical billing vendor offers a solution that will help you track their performance. From a revenue cycle KPIs to adherence to SLAs you need to work with a company that offers a clear window into what’s going on at their office.

They must offer a solution that serves as a platform to communicate with your staff to avoid miscommunication. Aside from on-demand reports work with a biller who offers weekly, monthly and detailed annual work reports.

Without this transparency and coordination, things can go awry even if you’ve selected the best in the industry.


  • Big picture insights drive stronger decisions
  • Increased coordination between inhouse staff and vendor
  • More transparency

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I’m a multi-certified revenue cycle management professional and compliance officer with 20+ years of experience. I contribute articles to leading healthcare publications and journals. I am currently working as Senior Transition Manager, in BillingParadise headquartered at Diamond bar, California. BillingParadise offers Medical Billing Services that intersect perfectly with the EMR/Practice management system you use.BillingParadise has offices in New Jersey, New York, Florida, Georgia, Minnesota, and Texas.

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