Experiencing growth in your private practice calls for establishing a billing department to improve the revenue collection and the general working of the practice. Before moving to the actual question ‘how to set up a billing department for my private practice‘, Let’s quickly go to what medical billing is. Medical billing can be defined as the process of submitting and collecting payment for the services provided to patients within a facility. It entails the following components, some of the major elements of consideration while deciding whether to outsource the medical billing or do it in-house include: Below is a detailed account of what any company needs to do to set up a billing department for your private practice.
Key Components of Medical Billing
Patient Registration
- Data Collection: Collection of detailed data from the patients, which may include basic personal information like name, address, contact information, and insurance data like policy number and policy provider and medical history, etc.
- Verification: Maintaining high reliability of the data collected during operations is vital for efficient billing and claims.
- System Entry: Entering the data into the practice management system to make a patient record. Conveyance of appropriate data at the right time is useful to prevent future billing system mistakes.
Insurance Verification
- Eligibility Check: Verifying the patient’s insurance status to ensure that the insurance plan is in force and the services provided by the physician will be covered.
- Benefit Verification: Identifying what services the patient’s plan allows patient cost share, which includes co-payments and deductibles, and any required pre-authorization.
- Pre-authorization: authorization from the insurance firms for some services to ensure all forms are cleared and all money paid.
Charge Entry
- Service Documentation: Recording all the services offered to the patients during their various visits correctly, using the right medical code (CPT, ICD-10).
- Charge Entry: Charging these services into the billing system with the right figures to aid the generation of the correct claims. This includes professional charges and charges for the facility where the procedure is carried out.
- Coding Accuracy: Coding must be done professionally to avoid cases where the insurance claiming company rejects the claim, or this takes a very long time before it is processed.
Claim Submission
- Claim Creation: Preparing claims with the help of the data from charge entries and ensuring all the documents are enclosed.
- Timely Submission: Premising claims to insurance companies through e-claims or by post on time to enable the payer to issue timely payments.
- Follow-up on Claims: The various daily checkpoints include Checking the status of submitted claims, remitting corrective action regarding denied or rejected claims within the shortest possible time, and resubmitting corrected claims.
Payment Posting
- Payment Processing: Such processes include entering payments made by insurance firms and patients into the billing system.
- Reconciliation: Synchronous reconciliation of cash payments with the specific claims so that all the amounts are properly accounted for.
- Adjustment and Denial Management: Contractual adjustments/allowances/write-offs and claims denied in the first instance: reviewing reasons for the denial and redrawing adjustments for submission.
Patient Billing
- Statement Generation: Issuing proper and comprehensive bills to the clientele in cases of any balance they need to pay, co-pay charges, or deductibles.
- Patient Communication: Explanations of the charges provided to the patients and reactions to any complaints or questions the patient may have about their bills.
- Collections: Having a way of checking up on people who owe the business money after the payment period and taking action to recover it. This may involve sending a reminder, negotiating for installment payment, or even involving a collection agency.
Reporting
- Financial Reports: Prepare coherent reports to track the practice’s revenue cycle about accounts receivable, collections, and open claims.
- Performance Metrics: Looking at factors such as claim rejection %, days’ sales outstanding (DSOs), and first pass collections when defining problem areas.
- Decision Support: Analyzing financial evidence for managerial design of practice’s operations, organization of resources, and management planning.
In-House and Outsourced Billing
When learning how to set up a billing department for your private practice, it’s important to decide whether to handle the billing in-house or outsource it to an external entity. Each option has its own set of benefits and challenges, which can make the decision-making process more complex.
In-House Billing
Control
- Direct Oversight: Billing can be done on a real-time basis and you can oversee the billing process while you can also control the employees dealing with billing.
- Customization: Billing processes are not restricted to conventional techniques; one can customize the billing processes intended for your practice.
- Confidentiality: Managing certain patient records in your practice can improve patient data confidentiality.
Challenges
- Staffing Costs: The recruitment process of talented billing staff often means a high cost and a long, drawn-out process in the hiring process.
- Operational Overheads: There will be the cost of billing software, additional office space, and expenses in addition to the cost of training.
- Scalability Issues: It becomes difficult to scale the in-house billing team for increased volume in practice development.
Outsourced Billing
Expertise
- Specialized Knowledge: Employing the services of a billing company means that you have the claims being dealt with by experts, which means fewer mistakes and much faster work.
- Compliance: Independent billing companies work with other healthcare providers and always get acquainted with new rules and regulations.
- Advanced Technology: Outsourcing firms utilize superior billing software and tools which widens the accuracy and efficiency of billing.
Cost-Effectiveness
- Variable Costs: Although many firms outsource their services, they compound the costs on percentages of revenue, meaning that the more the income, the more the firms charge. This can be cheaper, particularly in a new practice with an unpredictable high number of patients inactivity.
- No Overhead: Saves much money that an organization would otherwise spend on billing systems, software, and employee benefits.
- Focus on Care: Enables health care practitioners to focus on caring for patients rather than engaging in paperwork.
HealthRescue Partners: Tailored Pricing Models
Outsourcing is beneficial in terms of flexibility- and one of the areas where flexibility can be observed is in the price tables. Take HealthRescue Partners, for instance. It can evaluate your practice and suggest a specific percentage or a fixed-price plan.
Percentage-Based Pricing
Revenue Alignment
- Incentive Alignment: HealthRescue Partners work on an agreed commission share of your practice’s earnings. This means that the success of these companies directly involves making your company make more sales, hence the incentive to increase your revenue.
- Cost Management: When a hospital or clinic has a low patient flux, your costs remain the same. Only a part of the received revenue is paid. These factors mean that this model might be the financial saving grace for new practices that might not always have the volume of patients coming through the doors.
- Scalability: The fixed costs are generally high when your practice is established; this ensures that managing for cost is not a huge shock in your budget.
Fixed Pricing
Budget Predictability
- Stable Costs: Compared to cost-plus, structure, or contingency fees, a fixed price is where you are charged a flat amount for the services irrespective of income. This ensures that the monthly expenses are called off, thus easing the budgeting process.
- Comprehensive Services: At HealthRescue Partners, everything related to billing is provided flatly, meaning clients are not charged for the plurality of services in the field.
- Resource Allocation: This is more efficient since the costs have been ascertained, giving you an idea of the amount of money you should set aside or the amount of money you should charge your clients for a practice.
Conclusion
New medical practice entails a big investment. Therefore, managing the billing section is vital. Thus, learning the core aspects of medical billing and examining whether billing is best handled internally or externally can help you make wise decisions for your practice. Working with such a company as HealthRescue Partners, which has flexible pricing, can also smooth out the expenses and allow you to concentrate on delivering outstanding patient service.
