How to Select a Medical Billing Vendor
Medical billing vendors take the burden of processing and managing claims off of a practice’s staff members. Typically, they help ensure that there is proper coding applied to medical claims to facilitate payment between the patient and the health care provider. Some billing vendors may also offer help with insurance verification, IT and software, and collections. To find the right vendor that meets your needs, you'll look at their rates, reporting methods, and operations.
Establishing the Scope of the Vendor
Identify what type of service you need.In general, there are a number of basic functions that any vendor up for your consideration should meet. If a vendor does not accomplish any of these, you may want to consider removing them from your shortlist of possible candidates.
- A medical billing vendor should perform these functions: claim generation and submission, carrier follow up, payment posting and process, patient invoicing and patient support, and work with a collection agency when patients fail to pay.
- The number of services that a vendor offers means they will increase their fees, but you should ensure that these basic services are met.
- Some services can also help with registering and admitting patients, IT and computer support, medical transcription, insurance verification, and compliance with state and federal laws.
Decide what type of interface you want.Most medical billing vendors these days operate through online portals or electronic software. Compare different types of services to see which will work best for your practice.
- Cloud-based systems upload records and claims automatically to the online “cloud.” This protects them from accidental memory loss, but it requires a consistent internet connection.
- Some services will track past due balances and automatically add late fees for you.
- Look for a service that accepts many different forms of payment. This will increase the chance that your patients can pay on time.
Calculate a budget.What types of services you receive from a medical billing vendor may depend on how much you can afford to pay each month. Basic billing and coding software may start around 0-0 a month, but it can become more expensive based on your specialty and additional services. There are also other starting costs, such as installation and training.
Measure the quality of service.As you begin your search, you should make sure that the company you are hiring is a reliable and fast service. To do so, create a checklist to help you ensure that the company will perform efficiently for you. Some things you may add to this list:
- Do they employ certified medical billers?
- How fast is their billing cycle? What is the average length of time between the generation of the claim and the payment?
- How many charges typically are sent to a collection agency?
- How do they protect medical records and other sensitive personal information?
- What type of insurance coverage do they carry? Do they have liability coverage for security breaches?
- In case of disaster, what are their back-up procedures?
Searching for a Vendor
Ensure they meet compliance standards.Different countries will have different sets of compliance standards that regulate a medical billing vendor’s practices. For example, in the United States vendors need to meet rigorous compliance through HIPAA Omnibus.While medical billing vendors are prohibited from operating without proper licensure, you should conduct due diligence to ensure they meet standards.
- You can identify your nation’s compliance regulations through your Department of Health. If you are using an offshore vendor, you will need to ensure that they meet the compliance standards for your nation as well.
- You can find out if they meet standards by asking to see the vendor’s accreditations and certifications.
Require accreditation.Every medical vendor should be accredited through one of the governing bodies that oversees regulations and certifications. Organizations like the Healthcare Billing & Management Association will accredit vendors who pass rigorous standards and performance measures.
- You will also need to make sure that the vendor meets HIPAA requirements. You can find this information by speaking with a vendor representative or on their website.
Examine the benefits of using your EHR vendor.You have three primary categories of billers that you can select. You can either outsource to a local company, an offshore company, or to your Electronic Health Record (EHR) vendor.
- Not all EHR vendors offer medical billing services, but if they do this may be the best option for you. Since the EHR vendor has access to the medical information necessary to complete billing, you have the benefit of not having to arrange and monitor this information as it's sent to a third party.
Compare local and offshore companies.If your EHR vendor does not offer medical billing services, or if you’d rather choose to use a different vendor, you have the option of using a local or offshore vendor. A local vendor would be a billing service vendor in your area that offers the services that your practice needs.
- With local vendors, you have the advantage of on-site support. If something goes wrong or your office needs help, a local vendor representative can come to your office and solve the problem. Local vendors are often more expensive than offshore or EHR vendors.
- Offshore vendors often handle large caseloads, offer specialized services, and can offer low rates. With offshore companies, you are able to outsource your work to a lower cost bid. Unfortunately, this outsourcing tends to bring with it poor customer service and technical support, and privacy concerns. Since this company is offshore, you may be putting your patients' financial information at risk.
Selecting the Best Vendor
Compare billing models.Medical billing vendors can either approach collections aggressively or passively. Aggressive vendors will move unpaid accounts to collection agencies more quickly and aggressively pursue patients with unpaid bills. Passive billing models tend to take more time before they move accounts to collections agencies. If the speed of collection is an important factor for you, you might go with a more aggressive vendor.
- While you undoubtedly want patients to pay their bills, aggressive billing models can reflect poorly on your office’s reputation with patients, particularly those in lower income areas.
Compare how much vendors charge.The costs associated with contracting and working with an outsourced medical billing vendor can vary widely. Local and offshore companies will vary greatly in the amount that they charge and the way that they charge. The primary feature to look for when comparing prices is the percentage that vendors charge for processing claims.
- Avoid a vendor that defines collections as your practice’s complete revenue, rather than just the revenue they help to collect. By defining it as your complete revenue, they will charge you more.
- The industry average is approximately a 7% charge for processing claims.
Consider overall costs.Beyond the monthly or percentage based fees that a vendor will charge, there will be other fees associated with hiring a vendor. Before selecting a vendor, you should:
- Find out whether they charge additional fees for online or telephone technical support. Do they offer 24 hour support?
- Find out whether they charge for upgrades to the software program.
- Establish what the installation costs are. Many billing vendors have a one time startup fee and charge for installation in your office.
- On the other hand, you also want to know whether an increase in your practice’s size will affect your rates. Some vendors will adjust their rates based on the number of physicians in the practice.
- Avoid low rates. Some vendors will offer and advertise low rates to attract uneducated buyers. While low rates can be attractive, this often really isn’t the best deal. Many of these vendors do not offer the full scope of services that you need to complete your billing services, like resubmitting claims.
Compare reporting styles.With a medical billing service, you need consistent access to your financial information. You want to find a billing service vendor that will offer frequent reports, at least once a month, that offers a denial, operations, and data analysis report. You should also see whether you can access this report in real time online.
- Operational reports should show the total claims processed and dollar amounts submitted, amounts paid, adjusted, written off, or denied.
- Denials reports should show a list of denied claims and a log of the vendor’s follow up actions for each denial. You want to be able to sort this report by amount paid, so you can identify the smallest payment amount that the billing service will fight for.
- Data aggregation and analysis reports should show you a linear analysis of amounts paid over time. It is also helpful if these reports are online and can be exported to Excel spreadsheets for further analysis.
Compare vendor reviews.When you are choosing a medical billing vendor, it is important to know what other customers think of their services, their reliability, and how they handle billing. Ideally, the vendor will be well reviewed and customers will be satisfied with their practices.
- You can find a number of reviews online by searching “(name of vendor) reviews.”
- You can also ask other medical offices that you have a relationship with about the medical billing vendor that they use for a recommendation.
Ask to see certifications.A medical billing vendor can become certified through a number of different professional organizations that demonstrate their commitment to quality and transparency. For example, the Certified Healthcare Billing and Management Executive program, offered through the Healthcare Billing and Management Association, demonstrates that the vendor is committed to supporting continuous education for their staff and staying abreast to latest industry developments.
- Ask to see any certifications that the vendor holds. Many vendors will prominently display their certifications in their offices and on their website. Once you know what sort of certifications they have received, you can then research the certifying organization to ensure it is legitimate.
- Certifications also help to demonstrate that the vendor is legitimate and is less likely to misuse your financial information.
Compare vendor size and scalability.Look at the firm’s gross annual billings and the number of claims that it processes annually. You’ll want to know how many other practices the firm is handling billing for and whether there are enough vendor staff to handle additional firms.
- In terms of scale, you’ll want to evaluate whether the vendor will suffer any reductions in quality if another firm is added to their workload.
- Keep in mind that larger vendors tend to offer more specialized billing tools since these tend to be cost prohibitive for small vendors.
Compare staffing.In some ways, you’re not just choosing a vendor, you’re choosing a vendor based on how well equipped their staff are. Here, you want to know the educational background of the staff members as well as the staff and management’s experience.
- Inquire about how large the staff is. You want a vendor that will have sufficient support for your organization. Ask, “Would adding your practice require the billing firm to hire additional staff?” If so, you might consider going with another well-established vendor.
Read through the entire contract.This may sound like an obvious step in the process, but many medical officers enter into contracts with medical billing vendors without fully understanding what their contract guarantees and how services are rendered. Have your office’s lawyer go through the contract line by line to consult on the legal aspects of the contract as well.
- Billing is an essential pillar of your practice. If the medical vendor isn’t providing adequate services, your office is not getting paid and your organization will suffer.
Consider installation and training charges.Depending on the vendor you have decided to work with, you may need to arrange for a technician or vendor representative to come to your officer to install the software. You should try to negotiate so that the installation fees are included in your contract.
- The software may not need installation if it is accessible through a standard Internet browser.
- Note that the lowest cost provider is not necessarily the best. It is in the physician’s interest to see that a quality billing service makes an adequate profit. Otherwise, the billing firm will be forced to reduce the amount of effort spent on supporting the practice, resulting in lower quality.
- Focus on quality. Remember that 10% improvement in quality means 10 times more to your bottom line than 1% reduction in price.
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