The Best Medical Billing Service Providers of 2020

Medical billing services allow practices to outsource their medical coding and billing process. 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, reducing or eliminating the workload associated with in-house billing. Best of all, most services operate directly within your medical practice's existing practice management software, allowing staff to monitor progress on submitted claims.

While medical billing services offer a significant benefit to medical practices, it's important to choose the right one for your practice. Selecting the wrong partner can tie up your practice's money and possibly allow patients' payments to fall through the cracks. To ensure that revenue continues to flow smoothly, medical billing departments need to quickly and efficiently capture charges to create claims, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges are coming in, billers must keep tabs on previously submitted claims, ensuring they are not rejected or denied by payers. If they are, billers must revise those claims and resubmit them, as new charges continue to pile up. Medical billers are also responsible for sending patient statements for copayments or out-of-pocket expenses, as well as following up with unpaid patient accounts.

The challenges associated with medical revenue cycle management require billing departments to be nimble and adaptable. Billing departments are also responsible for staying abreast of the latest updates, whether that's changing regulations or shifts in payers' policies. No matter which way you slice it, medical billing demands a lot of time, energy and money to run in-house. That's why many medical practices choose to outsource their revenue cycle management to third-party medical billing services, 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.
  
  
• 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.
  
  
• 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. Faster reimbursement means less waiting around for payment on the services you've already rendered.
  
  
• Reduced denial and rejection rates: With its knowledge of payers' expectations and advanced claims 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 a good RCM service.
  
  
• Patient statements and follow-up: Medical billing services don't just deal with insurance companies; they also manage your patient statements. Whenever a patient owes money out of pocket and hasn't paid in your office, a medical billing service will ensure they receive a statement explaining their bill. If the bill goes unpaid, the billing service will follow up with your patients. In extreme cases, a medical billing service could 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 service, but this access to a full accounting of your practice's finances can be extremely helpful to the success of your business.
  
  
• 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.

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 between 4% and 9%. Based on that guideline, you should be able to get 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.

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 moves through the clearinghouse to the payer and is 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. Be sure to ask for clarification on how a company tracks its clean claims 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 that can be fixed. 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 your claim gets paid in a timely manner.

Sometimes claims sit with a payer without any response. In these cases, medical billing services often follow up (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 quicker for the services your practice has rendered, keeping your cash flow regular and healthy.

Initial ICD-11 diagnostic and procedural codes up for adoption

You might have seen the flurry of news stories last year about the World Health Organization classifying burnout as a workplace phenomenon and identifying gaming addiction as a risk facing youth. Those headlines came out of the 22nd World Health Assembly, where the WHO presented a proposed draft of the ICD-11 diagnostic and procedural codes.

You might be thinking, "Wait, we just shifted to ICD-10. What gives?" The transition to ICD-10 in the U.S. took place significantly after the rest of the world adopted the standards. In fact, most countries implemented ICD-10 in 1998, while the U.S. only meaningfully moved toward ICD-10 in 2015. Now that the proposed ICD-11 standards have been released, it's up to WHO member states whether they endorse the codes or not.

ICD-11 builds on the ICD-10 coding standards, growing the list of codes in the library from 14,400 to 55,000. While that's a big expansion (likely stirring nightmares about yet another transition), healthcare IT vendors and healthcare providers likely have some time before an IDC-11 implementation is required. Assuming the standards are adopted by member states, they still wouldn't go into effect until January 2022. Still, keeping tabs on ICD-11 as it weaves its way through the regulatory process is key to prepare for any impending changes.  

Continued growth of the medical billing service market

Healthcare IT is on the rise around the world, driving growth of the medical billing service industry forward as well. Market Research Engine issued a report projecting that the medical billing service industry will eclipse $16 billion in total value by 2024. According to the report, the growth will be driven by rapidly changing regulations that make third-party billing more attractive, and by the desire of healthcare providers to cut their in-house expenses while growing revenue.

Data privacy will still be a drag on growth, however, giving pause to healthcare providers who are hesitant to provide sensitive patient records to a third party. Demonstrating staff certification and adherence to privacy best practices will be key for medical billing services to remain successful.

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 can be broken down simply into these general components:

1. Claims are generated and coded based on clinical data.
2. Claims are scrubbed (manually and/or using an automated system) and edited if any errors are found.
3. Claims are transmitted through clearinghouses to the appropriate payers, which are insurance companies, Medicare, and Medicaid.
4. When payment is received, the billing service posts it to the practice's account less the service's percentage.
5. If claims languish unpaid, a medical billing service is responsible for following up with payers.
6. If a claim is denied, a medical billing service revises and resubmits the claim, following it until it is paid.
7. All financial data is stored for reporting, in some cases directly in the practice management system used by the medical practice.

Part of the process is also tracking patient balances owed and following up on unpaid accounts. In some cases, a 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're in need of these platforms, 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 on 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 claims are languishing unpaid or that you are receiving a high rate of rejections, you might consider partnering with an experienced medical billing service. Additionally, if the cost of a medical billing service is lower than maintaining full-time coders and billers in-house, outsourcing could likely result in cost savings.

We researched dozens of prominent vendors in the medical billing space to determine which were worthy of our best picks. Our initial research included reviewing client testimonials, other reviews, company websites and Better Business Bureau ratings. We also examined brands' other offerings in the healthcare space; for example, we considered whether they offer electronic medical record software.

We used the information we gathered to narrow down our initial vendors list to 10 finalists to be considered for reviews and best picks. We then considered the following factors to determine our best picks:

• Pricing: How does the service's pricing compare to others in our review, and is the company upfront about how its pricing model works and what is included in the price?
  
  
• Additional fees: Are there fees on top of the base pricing? Does the company explain these fees in a forthcoming manner?
  
  
• Contract requirements: What is the minimum contract length? Is there an opportunity to cancel early for no fee if the service does not meet expectations?
  
  
• Healthcare IT suite: Does the company offer proprietary electronic medical records software or practice management software? If so, does the company require that RCM service clients use its IT systems, or can they integrate with third-party systems?
  
  
• Claims process: What does the claims process look like, and what services does the company include in its price? Are there certified coders on staff? Will staff follow up on outdated or denied claims?
  
  
• Specialties: What medical specialties does the service commonly work with, and will it tailor its process to the needs of your practice given its specialty?
  
  
• First-pass claims rate: How many claims are generally accepted by payers on the first pass, and how many require resubmission or follow-ups?
  
  
• Denial management: What does the RCM service's denial management process look like? Does it handle all types of denials and rejections or only certain types?
  
  
• Biller and coder certifications: What type of training, education or certifications are the billers and coders for the RCM service required to maintain?
  
  
• Reporting: What kind of financial reporting can a practice expect, and how often? Are reports customizable? Are they available on demand?

In the end, we selected ChartLogic as the best medical billing service for small practices, AdvancedMD as the best medical billing service for large practices, and CareCloud as the most flexible medical billing service.