Third-party medical billing companies employ nearly 20,000 people nationwide and process more than 17 million claims per month, representing more than $18 billion per year, according to statistics provided by the Healthcare Billing & Management Association (HBMA), a trade association representing third-party medical billers.
Hospitals and clinics who work with third party billing companies typically have these organizations manage claim data to insurance companies (payers) as well as billing for patient pays. However, as time has evolved, the functions of third party billing services have expanded to handling insurance claim submissions, maintaining patient demographics, running and analyzing reports to determine additional revenue opportunities, invoicing as well as even medical coding and verifying credentials of patients.
Various third party billing companies also take on other roles, such as insurance claims collection, bookkeeping, tax planning, contract negotiation and other financial and billing services that are not related to medical practices. Some larger third party billing companies also have the ability to handle Human Resource services, such as payroll and benefits across a hospital or clinic.
How much control do you want?
As easy as it sounds, healthcare providers need to identify how much control they want in their operation and whether they want to staff for these functions. The philosophy and core competency of a provider organization many times determines the direction of the organization related to IT decisions as well as revenue cycle functions. There are benefits to in-house processing, where providers can cross train employees and improve employee utilization by sharing job functions. However, the overhead to managing all functions needs to be weighed as well as the overhead of IT management.
Whatever services are used, it is also important that each sub-function is priced appropriately. Providers should identify potential functions which are charged at a higher rate by billing companies. In this event, a blended or hybrid model many times makes sense.
For example, providers need to factor in the banking functions within the revenue cycle flow. Banks compete with billers by offering expanded lockbox functionality such digitizing EOB’s, archive and denials management. These services can be well integrated with treasury functions and streamline cash management.
Knowledge is Power
With any partnership, each person or organization needs to bring their share of necessary expertise to the table. An advantage to working with a third party biller is many times the overall knowledge of multiple payer systems such as Medicare, worker’s compensation policies and common managed care plans. It is important that third party billing companies and financial institutions have both the technology and skilled staff to handle whatever issues come to the table, and assure that day to day operations run smoothly.