Is your in-house medical billing costing more than you can handle? How is this compromising your organization's efficiency?
Learn how much you are actually spending on your in-house medical billing and how outsourcing it to a third party provider may be a more efficient and better cost-saving solution for you.
Read on to know the details shared by The Physician's News Digest about medical billing costs in the US.
The Cost of In-house vs an Outsourced Medical Billing
Many practices believe that outsourcing their medical billing is more expensive. However, the analysis created by the Physicians News Digest shows it otherwise.
And, the information supplied by The Physician's News Digest is based on an “average” medical billing company. ‘The Medical Billing Buying Guide’ gives ClaimCare, with our 100% USA-based staff, an A+ rating.
Hypothetical Facts of the Practice Involved in the Physicians News Digest Analysis
The following information was considered when creating the analysis of in-house medical billing costs:
- 3 primary care physicians
- 2 medical billing specialists
- 80 insurance claims filed a day (̴20,000 per year)
- $125 is the average billed amount per claim
A practice with the above-mentioned activity needs two medical billing staff with an average of $40k salary to perform these processes. Thus, the practice is spending approximately $101,000 on them, including their taxes and benefits.
With outsourced medical billing, there’s no need to think about the medical billing staff related expenditure. However, you would need to consider about five hours of time each week for managing tasks associated with billing at a rate of $15 per hour, which is equivalent to around $4,000 in administrative costs annually.
This includes the following costs:
- Electronic Health Record (EHR) system
- Practice Management (PM) software
- Hardware ($500)
On average, the cost per doctor for the practice management software alone may reach approximately $200 per month. Thus, if the organization has three primary care doctors, it would mean an annual cost of approximately $7000. This doesn't include the upfront costs associated with software purchase and installation. Along with the computer hardware costs of $500, the annual total cost would be around $7500.
With outsourced medical billing, you may only need to spend for a printer or the workstation that is required to communicate with the medical billing service provider.
Keeping your medical billing team updated with the latest coding and billing changes is a challenging task. On average, practices spend $2,000 on training alone. However, with a medical billing third-party provider, there’s no need to worry about this. It is their responsibility to keep all of their medical billing specialists knowledgeable with the latest coding changes. This ensures you always have accurate coding for all your billing services.
Direct Claim Processing Costs
The clearing house fees a provider needs to pay for submitting 20,000 claims is at $300 per month ($100 per physician) or $3,600 in a year. When outsourced, the fee is normally based on the percentage of the amount collected, which is normally at 7%.
This is higher compared to the clearing house fees doctors have to pay. However, given the percentage of billing collected through a medical billing provider, this amount will immediately outweigh its costs.
Billing Percentage Collected In-House vs Outsourced
Amidst the higher direct claim processing costs of third-party medical billers, it delivers an increased 10% billing collection to your practice compared to an in-house medical billing team.
Does this mean it is the right choice for your organization?
There are many factors for you to consider such as:
- Billing efficiency of your practice
- Staff turnover and their technical skills
- Years of experience in the industry
If you are a new provider and experiencing high staff turnover with poor technical skills, then it’s better to choose a third-party provider to help you with your medical billing.
Need help deciding? Call us at (855) 376-7631 or subscribe to our blog to learn more.
ClaimCare has over 80 years of medical billing experience. We serve virtually all specialties and help improve their billing collection. Learn more about our services. Most of our clients have experienced a 15 to 25% increase in collections and have days in AR under 40. Read more about us as reported by ‘Healthcare Tech Outlook.