BPO Make vs. Buy: Benefits of Financial Outsourcing
WRS Health recently released a white paper titled, “BPO Make vs. Buy,” which examines new, cloud-based revenue cycle management tools for medical practices. Today, in part two of our four-part blog series, we examine the cost benefits of outsourcing a medical practice’s revenue cycle management to a team of financial experts.
RIGHT PEOPLE, RIGHT EXPERTISE
You’ve all had the experience of being a do-it-yourselfer. Whether it was a home decorating project, a car repair, or a beauty treatment, you started out thinking you can handle every nuance, but at the end of the day, you were disappointed with the results. The project either took too long to complete, you were missing a part, or you didn’t fully understand the instructions. In the end, you had to spend more money to fix what you had done. Studies prove that when physicians, hospitals or basically any business, focus on their core business, they achieve better outcomes. The same is true when you rely on experts who have decades of experience under their belt. Expertise and knowledge is cumulative and over time they become consolidated.
Let’s face it. Your biller may never achieve the collective knowledge that an expert billing team has accrued. A biller with experience in your specialty has acquired a career’s worth of professional knowledge. Outsourcing brings you specialty-specific billing knowledge, including the coding of claims, claim submission, payment posting, management and reporting.
The author of an article in Healthcare Business & Technology, states that U.S. physicians “leave approximately $125 billion on the table each year due to poor billing practices” and that “up to 80% of medical bills contain errors.”
According to a Revenue Cycle Management analysis conducted by TripleTree, an investment banking consultancy firm, redundant data collection, manual processes and repetitive rework of claims submissions all contribute to a diminishing bottom line. The report says, “It has been estimated that 30% of all physician claims leave the office with errors; 15% somehow get lost. Of the five plus billion healthcare claims submitted each year in the U.S., more than 25% are still submitted on paper and processed manually. Labor intensive activities associated with claims processing and call center operations have resulted in transaction processing costs as high as $25 per claim.”
Outsourcing RCM provides functional and specialty specific expertise. For example, OB/GYN practices can benefit from an OB/GYN coding expert who understands OB/GYN billing.
Consider the case of Trilogy Women’s Health in Grapevine, TX. Dr. Rebecca Robert, a solo physician, who works with a Nurse Practitioner, sees 100 to 200 patients a week. Since outsourcing her billing to a BPO company, she is getting paid for her services only two weeks after a claim is sent. Not only does she get paid fast; her practice’s revenue is on the uptick.
Gail Wyatt, Trilogy Women’s Health’s Office Manager, says of her BPO vendor, “Our billing is being done properly and quickly. On top of that, we get a bonus because of the BPO Company’s Billing Manager and Billing Team. They are professional, they answer every question I have and they get back to me quickly. The company that handles our billing helps to micro manage it for us and make sure that our claims are getting paid in a timely manner. If the claims are not getting paid, they call the insurance company to find out what the problem is so we can resubmit the claim or do whatever needs to be done to get the claims paid in a timely manner.”
Wyatt continues, “When we have a pregnant patient, we’ll see a patient for their global maternal period and that includes all their prenatal visits, labor and delivery and postpartum visits. The bill is not submitted until the patient delivers the baby. We do a lot of work upfront without getting paid, so when that claim goes out it’s so important that it goes out correctly. The billing services company we use does have a great deal of knowledge about the OB/GYN field. If the doctor doesn’t put something in the claim correctly, they clean that up for us and send it off so that it’s not rejected. They send the claims out and we are typically paid in two weeks. Our (claims) rejection rate is around 2%, which is below the industry average. Outsourcing our billing allows me to do the duties I need to do here, without worrying about billing.”
Lily Hargrove, M.D., of Ivy Family Medicine in Charlottesville, VA knew that she wasn’t going to do her own billing when she opened her new practice. “It’s a very low overhead practice; there’s not a lot of moving parts outside of insurance. I knew that I would be outsourcing the billing, so for me not to have to do anything extra and for my billing service company to be able to go into the system, pull what they require and communicate with me about what they need was very appealing. Our external billing company charges a reasonable rate, which is great. I wanted a complete practice management system and I wanted to think about billing as little as possible…When we communicate with the people who do the billing, we’ve been very happy. I’m getting paid what I should. We’re getting reimbursed in a timely manner. It’s huge. I was debt free in six months and our billing services company was a big part of that.”
We have all heard the horror stories of “trusted” staff members ripping off physicians. Many ask, “How could a smart business owner let this happen? “It’s actually very common. Practices don’t always realize that they are not collecting all of the money they deserve. In some instances, employees may be making mistakes, or even stealing money from the practice. Despite best efforts, interruptions between the front desk and bank deposits can occur. It’s important to know if you are being paid for all services performed and if you are being paid correctly. The natural “checks and balances” that are introduced by financial services BPO provider can, and do, make all the difference.
Is all of the money collected, making it to the bank? Having experts focus on your bottom line ensures that you’re getting all of the revenue that you earn. Outsourcing financial control and bookkeeping services to a company with an integrated platform enables real time billing and accounting reconciliation and gives you the ability to check your finances from anywhere at any time.
Financial services outsourcing provides the following benefits:
Financial experts can create and monitor financial controls customized to your practice, optimizing your financial performance and making certain that no errors are made. Money is correctly collected and then reconciled between the platform, general ledger and your bank.
- An expert can look at profit and loss line-items, balance sheet assets and liabilities and cash-flow and develop a financial plan for the practice based on your goals.
- Financial experts add logic to the numbers, identifying trends, defining your most profitable areas and assisting you in creating operational goals for your practice.
- A series of internal controls ensure that all financial tasks are performed with the highest level of accuracy, leaving no room for error. Experts are also trained to break down your financial reports in a way that is simple and easy to understand, so you can get the information you need without having to work hard for it.
- Accessing the expertise and business processes used by large organizations is not only extremely affordable, but there is usually a 20-30% return on investment demonstrated within the first three months. Based on current expenditures, there is typically an immediate expense reduction.
The time when complying with Meaningful Use (MU) Stage I meant that you could easily boost your bottom line with government incentives is coming to an end. MU Stage II begins in 2014 and penalties will start to be levied for noncompliance in the near future.
Is it really in a practice’s best interest to take on and learn the constantly changing rules and regulations or outsource to a company with the depth of expertise and know how to work with a practice to comply? It requires a great deal of organizational resources to stay ahead of the challenges and process to achieve your stimulus payments. If you fall behind on the process, you risk losing stimulus payments and incurring penalties.