The history of the medical billing industry dates back to the 1970s and 80s, when independent companies emerged across the USA to offer streamlined insurance billing services to healthcare practices. However, back then, the entire process was completed manually, from creating paper-based claims to receiving checks from payers as reimbursements. It was in the 1990s that revenue cycle management (RCM) software took over the market, and from electronic claims to EDI transactions, the entire process turned digital.
But did every medical billing company in the United States manage to keep pace with these technological transformations? The answer is NO. Many came, and many sank, and many were replaced with new contenders, simply because of their inability to keep up with the technological trends in the industry.
Now, artificial intelligence (AI) implementation is governing the industry’s future, but is your billing company leveraging it? Or are you, too, stuck with outdated billing processes and noticing the churn in your revenue? If yes, then it is time to part ways with your current billing partner and plan a prosperous future with a new one. Worried about the divorce getting messy? Relax, in this guide, we will cover all the aspects that make this transition a walk in the park. So, continue reading!
Indications for Switching to a New Billing Company
But how does a healthcare provider come to the realization that it is time to switch to a new medical billing company? The answer lies in the following indicators. If you are noticing one, a few, or all of the following problems with your current partnership, then understand that you must jump ship and get aboard a safer one.
An Increased Denial Rate
The average claim denial rate in the industry is between 5% and 10%. However, high-performing practices strive to keep the denial rate to 4% or less. If you are constantly receiving denials on your claims and the denial rate has spiked to 11% or more, start looking for a new billing company to outsource your operations to.
A Lack of Transparent Communication
Third-party medical billing companies should serve as an extension of in-house teams. Therefore, the communication between the healthcare practice and the billing company should be as smooth, honest, and effective as internal communication. So, if your current billing company is making revenue cycle-related decisions without your knowledge or failing to share practice performance/audit reports with you, understand that this is a red flag.
Software Incompatibility
In 2024, the National Electronic Health Records Survey (NEHRS) found that 95% of office-based physicians in the U.S. had adopted electronic health record (EHR) systems, and 83.6% were using a certified EHR system. EHR software and other billing tools allow practices to store and manage data and streamline billing.
However, these systems are rapidly evolving, and with over 1,000 different EHR systems in use, software compatibility issues often arise. Meaning, the system installed at the practice cannot integrate with the billing company’s systems and workflows. If that’s the case with you, it’s time to switch your billing company.
Slow and Manual Processes
Is your billing company still using paper claims and handling the RCM processes manually? Then why not switch to a company that can speed up the process and guarantee reduced errors with automated billing?
Robotic process automation (RPA) is being used in the healthcare industry for patient registration, eligibility verification, and claims creation. According to a survey, 43% of hospitals and health systems are using RPA for revenue cycle operations. Another research study found that RPA can decrease time spent on billing and claims processing by 30%. So, why are you allowing yourself to be a laggard?
Non-Compliance and Audits
Non-compliance with government regulations and industry standards can have significant consequences for a healthcare practice, such as audits, financial penalties, lawsuits, and reputational damage. For HIPAA violations alone, the penalty can be up to $2,190,294 per violation. When caught, practices have had to pay millions of dollars in settlements.
So, why pay such a huge price for something that was not even your fault to begin with?
In-House Staff Feels Burdened
Is your in-house staff constantly troubleshooting on behalf of the billing company? Is it causing them to feel burned out and frustrated? And why not? They outsourced the billing duties, expecting them to be performed efficiently. And here they are, yet again, managing everything to ensure clean claim submissions and improved bottom lines.
Don’t let this be the reason they resign. Staff shortages will further strain your revenue. Instead, switch to a reliable medical billing company and observe the improvement in your staff’s productivity.
Growing Patient Dissatisfaction
The last key indicator for switching to a new medical billing company is also the most significant one. Patient dissatisfaction! Are your patients complaining of receiving surprise bills? Are they being denied timely treatments because of prior authorization delays? Remember, your patients are your revenue source. If you lose their goodwill, you lose them, and hence, your revenue.
Key Considerations Before Making the Switch
Now that we have discussed all the key indicators that generally prompt a healthcare practice to consider switching to a new medical billing company, let’s talk about some actionable steps that you must take before transitioning.
Identify Your Reasons for Switching
First and foremost, you must be very clear about the objectives and revenue goals that you are trying to achieve by partnering with a professional billing company. It is best if you can quantify them, so that later, during the tracking phase, you can measure whether you managed to reach them.
For example, you want to reduce your claim denial rate to under 5%. Now, since the current billing company is not helping you reach this target, you must move on to a new one.
Clean Your Old Accounts Receivable (AR)
Second, don’t leave any baggage behind. If your current billing company is still in the process of AR recovery and has already sent out patient statements, let them clean the AR for you. However, if they are unable to resolve old AR, check if someone can perform this task internally. If that is also not an option, pray that the new billing company offers old AR clean-up services alongside new claims creation.
Pick the Right Billing Partner
All of this brings us to our third key consideration: Selecting the most suitable medical billing company. Here, just understand that your chosen billing partner should be able to meet your practice’s objectives, revenue goals, and offer you the very services you need for optimized revenue cycle management.
Benefits of Switching to the Right Billing Partner
Think you can ditch the current billing partner and handle it all on your own?
The problem is that until now, you were only scraping the surface. The best is yet to be explored. Read the following advantages of switching to a reliable medical billing company and envision a prosperous future for your practice.
Accelerated Cash Flow
Top-performing medical billing companies can guarantee a revenue increase of up to 30%. How? They make it possible through clean and compliant claim submissions that are accepted on the first attempt. The result? Uninterrupted cash flow in the form of swift reimbursements.
Reduced Administrative Burden
Professionals at well-reputed medical billing companies consider themselves to be a part of your team. They take over the administrative workload, including patient scheduling and data management, to reduce your staff’s burnout and fill staffing gaps.
Lower Operational Costs
Contrary to the widely held belief, outsourcing medical billing is more cost-effective than in-house billing. By entrusting your non-clinical duties to a professional medical billing company, you can save money on overhead expenses, like hiring billers, equipment, office space, etc.
Instant Access to Expertise
If you thought medical billing was intricate, wait till you discover the complexities of specialty-specific billing. Some medical specialties, like plastic surgery, radiology, and neurology, have claim denial rates of up to 28%. Why? It is extremely challenging to master their service coverage, CPT coding, modifier usage, documentation, and other billing rules.
Fortunately, medical billing companies hire certified billers and coders who are trained in specialty-specific billing, giving you instant access to the expertise you need.
Adherence to Compliance
Most renowned medical billing companies are 100% HIPAA-compliant. Besides a HIPAA compliance certification, they have other certificates (e.g., ISO 9001, SOC Type 1), affiliations (MGMA, AHIMA, AAPC, HFMA), and partnerships, making them a credible pillar of regulatory compliance.
Proactive Denial Management
A medical billing company that genuinely cares about improving your practice’s revenue will not charge you until you get paid. Meaning, it operates on a fee-per-collection model and charges a small percentage of your monthly net income.
Why is this important? Because if your claims are denied, they walk away with nothing. Hence, it becomes their mission to turn every denial into dollars, and they do this through proactive denial management.
Improved Focus on Patient Care
Physicians spend around 15.5 hours per week on medical billing, as highlighted in the Medscape Physician Compensation Report for 2023. This often takes their focus away from patient care. However, by collaborating with a top-tier medical billing company, they can restore the balance between paperwork and patient care.
So, let third-party billers handle the RCM while you (the physician) ensure quality patient care.
Transitioning to a New Medical Billing Company
Switching to a new medical billing company doesn’t have to be daunting. Just follow our 6-step guide to smoothly flow through the process.
Step 1: Conduct an Internal Audit
First, you must identify the problems in your current billing workflow. You can do this by conducting an internal audit and pinpointing the areas that are most likely causing revenue leakage. For example, is medical coding your weak suit, or are you continuously making errors at coverage checks?
Step 2: Contact the New Company
Now that you have identified the problem areas and are clear about your revenue goals, the next step is to contact your chosen company and communicate your expectations lucidly. Ask the company directly if they can help you resolve your current billing issues and achieve your revenue targets.
Step 3: Understand Onboarding Rules & Timeline
While speaking to the new billing company’s representative, ensure that you understand their onboarding process, including the time it will take to set up your account and transfer your data to their Cloud systems.
Step 4: Transfer Account Details
If you agree with the company’s terms and timeline, transfer your data to their system and ensure all the security protocols are followed. This will most likely include EHR integration. Here, maintain effective communication with your dedicated account manager as he walks you through the technical steps.
Step 5: Implement & Monitor
Now that you have successfully switched to a new and reliable medical billing company, implement the new system and diligently monitor the billing operations for at least the first 30 to 90 days.
Step 6: Review & Optimize
Make a note of small wins, such as reduced AR days, decreased claim backlog, or a higher first-pass claim rate, to evaluate the overall performance of your new billing partner. Determine how this company’s medical billing services are optimizing your revenue cycle and offer timely input to improve the processes.
Unlock Frictionless Transition to MediBillMD
In a short span of time, MediBillMD has become an industry leader, offering proven medical billing solutions to practices of all sizes across 50 states. From specialty-specific billing and coding to provider credentialing and practice audits, we provide end-to-end RCM services for accelerated cash flow.
Moreover, our comprehensive practice analyses, smooth onboarding, and expertise in all leading EHR/EMR software make the transition a breeze.
If you want to unlock a frictionless transition to a new medical billing company, then outsource medical billing services to MediBillMD and notice the difference.
