Benchmarks For Analyzing a Medical Billing Service

Revenue cycle management is one of the core processes that can build or wreck a clinical practice. No matter how big or small a practice, RCM is like the pulse that always must beat. Practice owners are often confronted with situations when they realize that patient-care was falling into a state of neglect because a lot of their prime time was being spent on in-house revenue cycle management.

Thereon, the clinic owners start looking at options to reverse the situation where they are able to give patient-care top priority. The only way this can be accomplished they determine is by outsourcing the core functions of RCM to billing companies. Most practices with no prior experience partnering with outsourced billing companies often find themselves at the crossroads of decision making. Will an outsourced billing company deliver quality service and match the functions of their in-house billing service?

Most practice owners and managers are circumspect on the issue, and before partnering with outsourced companies want to be fully convinced to take the plunge. So here are some of the guidelines that can help in their decision making.

Essentially, a practice has to weigh the following criteria, before partnering with a billing service.

1. Grades of service                                                                  

2. Vendor Capability & Experience 
3. Technology Infrastructure                                                  
4. Cost of service

5. Capacity & Infrastructure

Read the revenue cycle management tips suggested by BillingParadise that have been published in the premier healthcare publication, BeckersHospitalReview.com

Determine if the outsourced billing company provides the following services:

• Generate a claim and submit it to the payer                         
• Follow-up the claim with the carrier
• Payment posting & processing
• Patient invoicing and support
• Collection agency transfer services

There is a general perception that a billing agency outperforms an in-house billing division when it comes to following-up with insurance carriers and pursuing denied claims. Most billing companies provide additional services, which include credentialing, medical coding, transcription, insurance eligibility verification and appointment scheduling. Depending on the services solicited by the practice, the fees are on a pro rata basis.

As the saying goes, ‘A journey of a thousand miles begins with one step’, and that first step is to know the billing company inside out. Most billing companies ‘talk the talk’, but few actually ‘walk the talk’. If a practice is looking at a long term partnership, transparency should be the basis of the association, know the vendor’s strengths and grey areas, before a long term commitment.

Grades of Service:

Medical billing includes different grades of service, from basics to add-ons. The practice needs to be pretty certain of what kind of services the vendor will provide.

Vendor Experience:

When a vendor’s experience is evaluated, the equation swerves around the number of years the business has been in existence.  Although the length of time is a fair evaluation of experience, the practices have to determine if the vendor company has the skills and knowledge in the specialties it proposes to provide.

Medical specialties are diverse, and billing procedures are even more complex and diverse. The practices need to be certain of the vendor company’s familiarity in the domain of their specialty. An added plus point would be the billing company’s experience billing Medicare and Medicaid accounts.

It is always preferable but not mandatory, that the staff of the billing company is certified by the American Medical Billing Association (AMBA). The certification programs of AMBA have proven to be useful for professional billing services.

The certification calibrates the skills in the domains of

• ICD-10, CPT4, and HCPCS Coding;
• HIPAA and Office of Inspector General (OIG) Compliance;
• Information & Web Technology
• Insurance Claims & Billing, Appeals & Denials, Fraud & Abuse.
• Reimbursement.
• Medical Terminology

Technology Infrastructure:

There are false assumptions that only billing companies supported by advanced billing software are capable of providing professional services. It is the men behind machines that matter, data entry plays an important role in the documentation, and any errors on that front can scuttle the benefits of having the most advanced software.

The issues of concern any practice must have should be in the area of data backup, data security, data recovery, data backup procedures, and data sharing.

The practice needs to lay more emphasis on areas of technology related to the following:

*Documenting and sharing super bills and claims                             

*Compatibility of vendors billing software with EHR     

*Integrated EHR accessibility             

*Data security safeguards in place     

*Disaster recovery procedures

*Backup data storage facilities                                                               

*Usability of HIPPAA compliant technology

Eventually, technology integration between the vendor and the healthcare facility plays a significant role in improving the revenue cycle of the practice.

Pricing Guidelines:

There are three different pricing models that are ‘standard’ offerings by billing companies.

Amongst the most preferred modes of pricing are the percentage-based and fee-based model. The hybrid option has few takers.

Capacity & Infrastructure:

After evaluating the feasibility of partnering a medical billing company, the practice will finally determine if the vendor company it has chosen to partner with has the capacity to take on their revenue cycle management.

The main criteria most practices are influenced to partner with billing companies is to see if they will follow-up denied claims and fee collections because these are part of their revenue collections that need an extra effort. The in-house service is too busy to follow-up such claims, and if the billing company is unable to pursue these claims, partnering with them would be a wasteful exercise.

There are numerous metrics that determine the performance of a billing company, primarily these include:

*The length of time they have been in business.                                  

*Number of employees working for the company

*The company’s client list by specialty                                                            

*Annual gross billings & claims processed

These are simple metrics that will help analyze the level of service the billing company is capable of providing to the practice. 

If the billing company shares more information, the practice can measure the quality matrix based on:

*Length of time in A/R by specialty                                                           

*Delays related to Coding, Submission, and Follow-up

*Revenue cycle improvements by the existing client – percentage wise                   

*Reduce payment delays – percentage wise

These matrixes can help provide insights into the performance value of a billing company.

Service Level Agreement (SLA) between provider and vendor:

Finally, after reviewing all aspects of services the vendor proposes to offer. All of it needs to be documented as a ‘Service Level Agreement’ between the billing service provider and the practice. Service Level Agreement consists of 6 to 7 clauses, usually beginning with authorization from the practice giving its consent to the vendor company to prepare process and submit claims to commercial and government payers on behalf of the practice.

The agreement also specifies that the payment received by the vendor on behalf of the practice shall be directed to accounts controlled by the practice. The vendor company can also be authorized to post payments received from third-party payers to the patient’s file, billing the patient directly when necessary, so that full payment can be secured for the practice.

A clause in the agreement could specify the practice’s responsibilities of providing all necessary records, information, and assistance to the vendor company. The most important of clauses would relate to confidentiality the vendor must guarantee that patient records would only be disclosed to parties processing the claims submitted on behalf of the practice.

The fee structure that would be paid to the vendor for services specified and rendered can also be a part of the agreement. The Confidentiality and HIPPA clauses would include a ‘Business Associate Agreement’. There could also be a ‘term and termination’ clause that specifies the agreement could be terminated if there is a breach in the contract. The party terminating the clause would send a written notice to the other party, with a time period of termination included.

Finally, the choice of Law and Jurisdiction could be mentioned in the SLA