The Best Medical Billing Services of 2021

Medical billing services allow practices to outsource their medical coding and billing processes. Also known as revenue cycle management (RCM) services, medical billing companies remove the burden of coding claims, submitting them to payers, following up on unpaid claims and managing denied claims.

Outsourcing your RCM puts a dedicated team in charge of generating your claims, scrubbing them for errors, and chasing denials or underpayments, which reduces or eliminates the workload associated with in-house billing. Best of all, most services operate directly within your clinic's existing practice management software, allowing your staff to monitor the progress of your submitted claims.

While medical billing services offer significant benefits, it's important to choose the right one for your practice. The wrong partner could tie up your practice's money and possibly allow patients' payments to fall through the cracks. To ensure smooth cash flow, medical billing departments need to capture charges and create claims for them quickly, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges come in, the billers must keep tabs on previously submitted claims in case they are rejected or denied by payers. If they are, the billers must revise and resubmit those claims – without falling behind on the new claims. Medical billers are also responsible for sending statements to patients for copayments or out-of-pocket expenses and following up on unpaid patient accounts.

The challenges of medical revenue cycle management require billing departments to be nimble and adaptable. They must stay abreast of updates, such as changing regulations and shifts in payers' policies. No matter which way you slice it, in-house medical billing demands a lot of time, energy, and money. That's why many medical practices outsource the process to third-party medical billing companies, sometimes called RCM services.

Medical billing services help medical practices in various ways. These are the major benefits of medical billing services:

• Streamlined back-office processes: Outsourcing to a medical billing service reduces the staff and resources your practice must expend on back-office processes like billing and coding. Because these services minimize the administrative burden on your staff, they have been known to reduce burnout in the healthcare field.
  
  
• Payment tied to success: A medical billing service's payment is connected to the success of your practice, since it generally costs a percentage of your monthly collections to outsource to an RCM service. The more money a medical billing service successfully collects on behalf of your practice, the more it gets paid, so it is invested in helping you succeed.
  
  
• Faster reimbursements: Medical billing services are experts in coding and billing, so they can typically navigate the process much more easily than a single practice can. This is especially true if the RCM service has an existing relationship with clearinghouses and payers. This means less waiting around for payment on the services you've already rendered.
  
  
• Lower denial and rejection rates: With its knowledge of payers' expectations and advanced claim-scrubbing software, a good medical billing service should immediately reduce the rate of your claims' denial or rejection by payers. Look for a first-pass claims rate above 95% to be sure you're partnering with an effective RCM service.
  
  
• Patient statements and follow-up: Medical billing services don't just deal with insurance companies; they also manage your patients' statements. Whenever a patient owes money out of pocket and hasn't paid in your office, your medical billing service will send them a statement explaining their bill. If the bill goes unpaid, the billing service will follow up with the patient. In extreme cases, a medical billing service may even refer unpaid accounts to a collections agency.
  
  
• Detailed financial reporting: Many medical billing services capture all the data related to your claims and couch it in easy-to-filter reports. The level of reporting and the usefulness of the visualizations varies by company, but this full accounting of your practice's finances can be extremely helpful.
  
  
• HIPAA compliance: By law, medical billing services must comply with the Health Insurance Portability and Accountability Act. Any sensitive patient data required for coding claims and billing must be secure at all times, both at rest and in transit. Many medical billing services work directly within your practice's healthcare IT platform, leveraging the same security measures you trust on a daily basis.

While outsourcing isn't right for everyone, it can help medical practices that are having trouble operating the back office smoothly. Best of all, a good medical billing service can improve your overall cash flow.

Bottom Line: Outsourcing your medical billing operations could reduce the burden on your team and free up resources for you to direct elsewhere. When choosing a billing service, you should request a breakdown of its RCM process in writing to confirm that it handles every aspect of billing that you need.

Whether you should contract with a medical billing service or keep your billing in-house depends on how large your practice is, how much revenue you take in, and how you utilize your staff. To do billing in-house, you will need a certified medical coder on staff. You will also need to keep up with ever-changing medical laws and codes. So many things can go wrong with medical claims, such as simple coding errors, that will make insurance companies reject them. If you manage your billing in-house, it will be up to you and your staff to deal with rejected claims. Billing services take care of all of that for you, including staying on top of laws, codes, and policies.

Cost can ultimately determine the smartest choice for your practice. In-house billing requires payroll for a medical coder and usually an annual license for medical billing software. Someone with this certification will cost more to employ than an average clinical staff member, and taking care of claims will likely be their full-time responsibility. Billing services typically charge a percentage of net collections, often 4% to 9%. This should give you a general idea of what makes financial sense for your practice as you consider a medical coder's salary versus the speculative cost of a service's percentage. However, there are other costs to your practice to consider for each route.

Outsourced billing can be a good solution for small practices that need their staff to focus on other aspects of running the office. Having one person on payroll as a medical coder may not make sense with the number of patients the practice serves. For larger practices and hospitals, a billing service may not be worthwhile if you have the budget for medical coders, a large volume of claims, and the resources to handle them internally.

Tip: If your in-house medical coding and billing is inefficient or can't keep up with your claims volume, hiring a medical billing service to support even just a portion of your billing needs could be the answer. You don't necessarily have to outsource 100% of your billing operations.

A dedicated medical billing and coding department can improve your practice's cash flow by reducing the time a claim spends in accounts receivable, a metric referred to as "days in A/R."

First-Pass Claims Rate

Many RCM services focus on reducing days in A/R by coding clean claims and scrubbing them for errors with the same or similar rules that clearinghouses use. This improves the chances that a claim will move through the clearinghouse to the payer and be reimbursed on the first pass. The rate at which claims are approved and paid after the first submission is known as a medical billing service's first-pass claims rate, or clean claims rate. This is a critical element of choosing a service: The higher a company's first-pass claims rate, the better.

However, not all services track clean claims rates in the same way. Some companies only tally a "clean claim" if it was accepted and paid. Others factor in unpaid claims that were not denied, inflating their first-pass claims rate. Ask a company for clarification on how it tracks its clean claims rate before basing your decision on that rate.

Faster Payments With Denial Management and Follow-Up

Medical billing services can also expedite the revision of rejected or denied claims. When a payer rejects a claim, it is usually due to a clerical error. Once edited, the claim can be resubmitted for payment. Good medical billing services keep close tabs on rejections and denials, acting swiftly to revise any errors and ensure timely payment.

Sometimes claims sit with a payer for a while without any response. In these cases, medical billing services follow up (sometimes rather aggressively) to get the payer to respond. This often results in faster approval and reimbursement. In other cases, it results in a denial or rejection; however, that also gives the billing service the opportunity to revise and resubmit the claim.

Each of these elements of an RCM service contribute to downward pressure on the days in A/R, which means you get paid sooner for the services your practice has rendered, keeping your cash flow regular and healthy.

The answers to these frequently asked questions can shed additional light on the medical billing services space.

HOW DO YOU PROCESS MEDICAL BILLING?

The medical billing process is complex and involves several third parties. However, it breaks down to these general components:

1. The medical biller generates and codes claims based on clinical data.
2. The claims are scrubbed (manually or using an automated system) and edited if any errors are found.
3. Claims are transmitted through clearinghouses to the appropriate payers (insurance companies, Medicare, and Medicaid).
4. When payment is received, the billing service posts it to the practice's account, minus the service's percentage fee.
5. If a claim languishes unpaid, the medical billing service follows up with payers.
6. If a claim is denied, the medical billing service revises and resubmits the claim, tracking it until it is paid.
7. All financial data is stored for reporting, sometimes directly within the client's practice management system.

The process also includes tracking patient balances owed and following up on unpaid accounts. In some cases, the medical billing service will refer the balance to collections.

WHAT CHARACTERISTICS OF MEDICAL BILLING SERVICES SHOULD YOU LOOK FOR?

Medical billing services should be secure and HIPAA compliant. They should also employ certified medical coders and billers, preferably with years of experience in the industry. Some medical billing services also offer access to their electronic medical records (EMR) systems and practice management software as part of the percentage costs. If you need those platforms, bundling them with a medical billing service could be the way to go.

Before signing up with a medical billing service, ask for a sample contract or operating agreement in writing that spells out the percentage of collections you will be charged and the responsibilities of both the billing service and your own practice. You should also seek out practices similar to your own and request recommendations of medical billing services they've successfully used.

WHY SHOULD YOU OUTSOURCE YOUR MEDICAL BILLING PROCESS?

Outsourced revenue cycle management is right for some medical practices but not for others. If you find that your claims are going unpaid or you are receiving a high rate of rejections, you should consider partnering with an experienced medical billing service. Additionally, if the cost of a medical billing service is lower than that of maintaining full-time coders and billers on your staff, outsourcing is likely the right choice.