10 Signs You Should Consider Outsourcing Medical Billing Services
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10 Signs You Should Consider Outsourcing Medical Billing Services

The medical billing landscape has undergone significant changes in the last few years, and more are on the way. From changes to billing around the COVID-19 pandemic to the pending implementation of ICD-11, revenue cycle leaders will benefit from rethinking their relationship with medical billing outsourcing companies, regardless of what strategies have been effective in the past. But at 3Gen Consulting, we’ve run across some companies that are still reluctant. Unfortunately, this is often because they do not recognize the signals that their medical billing services need external support. 

To help you and your leadership better determine where and how you should look for opportunities to outsource medical billing, we’ve put together these signs that it’s time to walk away from the status quo and look for vendor partners who can support your needs in a changing revenue cycle landscape. 

Keeping up With Coding and Billing Changes Is Too Expensive
Billing changes have been constant over the last few years, and more are coming.

The American Medical Association (AMA) has released new Current Procedural Terminology (CPT) for 2024, which includes 349 editorial changes, 230 additions, 48 deletions, and 70 revisions. ICD-11 includes the integration of new diseases and conditions, enhanced diagnostic detail, and adjustments to the classification system. 

Keeping billers and coders up to date with these changes requires extensive training and support. If you’ve been struggling with the cost of these requirements, it might be time to outsource medical billing. 

You Can’t Find Specialized Skills
Changes in medical coding and billing means that providers need more billers and coders to ensure their revenue cycle processes remain efficient and effective. Unfortunately, at the same time, the country is experiencing shortages of these professionals. 

The AMA reports a 30% shortage in medical coders, putting increased pressure on providers to stretch resources and reduce turnover of their existing staff [1]. If you are struggling to find the professionals needed to maintain quality in your medical billing services, it’s time to consider outsourcing. 

You’ve put it off
Outsourcing medical billing services should be a tactic all healthcare providers consider. 

There are always multiple benefits to consider, including increased efficiency, reduced costs, and freeing resources up for higher value tasks. It’s likely that, in the past, your leadership has considered outsourcing, but not taken action for myriad reasons. In that same time, you’ve likely missed out on growth and efficiency opportunities. 

As complexity in the healthcare revenue cycle increases, the opportunity cost of waiting longer is only increasing. Now is an excellent time to restart your evaluation of outsourcing options. 

Your Staff Is Dealing With Burnout
Burnout isn’t just a problem for clinicians. Because of the nature of the work and pressure to perform, billers and coders can also end up feeling overworked, overwhelmed, and eventually, they’ll become subject to burnout. This occupational phenomenon is recognized by the World Health Organization and has its own code under ICD-11 [2]. 

If your staff is exhibiting symptoms like reduced performance, stress, physical issues, and emotional exhaustion, it might be time to review a list of medical billing outsourcing companies. 

You’re not Dealing with Specialized Coding Needs
Depending on the type of organization you’re responsible for, your billers and coders might need specialized training or even certifications. For example, billers and coders for ambulatory surgery centers will need a different knowledge set than those working in urgent care and they’ll need a different set than those working in a large hospital. 

If your staff isn’t properly specialized or are struggling to keep up with your specific needs, outsourcing might be a smart choice in the near future. 

Your Skills and Needs Aren’t Aligned
With all the changes in healthcare, it’s likely that your billing and coding needs will be shifting in the near future. Changes around price transparency, surprise billing, and medical necessity guidelines mean that you will need different skills to maintain revenue cycle health. 

To keep up with these and even get ahead of changes, it’s smart to make an effort to outsource medical billing services. 

You’re Falling Behind on Revenue Cycle KPIs
If you’re tracking your most critical revenue cycle KPIs, you’ll know where you might have issues. 

Key indicators of revenue cycle health, like denial write-offs, clean claim rates, bad debt, and aged A/R give you whether you should consider medical billing outsourcing companies as a solution in turning these numbers around and keeping them as healthy as possible. 

Your Costs Are Too High
Are you tracking the ROI on your billing and coding investment? Is your cost to collect within the industry benchmark of 2-4% of net patient revenue? Answering these questions can be difficult, considering hidden costs like inefficiency, denials, bad debt, payment delays, and general overhead. 

But if you’re seeing signs that your costs are creeping up and you’re not getting the return that should be expected of your medical billing services, outsourcing is an option you should consider. 

Your Cashflows Are Declining 
Many organizations are struggling with cash flows. In 2023, the average days cash on hand had fallen below 200 for nonprofit hospitals and health systems [3]. But cash flows can be a challenge for any organization. 

When cash flows are crunched, it’s smart to look for opportunities in your revenue cycle to make some changes. One option you should never take off the table is outsourcing, since working with an experienced vendor can help you access efficiencies and skills that might be too resource intensive for your organization or might take too long to access through reforming internal processes. 

Your Denials Are Creeping Up
Denials are a constant challenge in the healthcare revenue cycle, and that isn’t changing any time in the near future. Providers report that in the last two years, denials have only gotten worse [4]. The primary culprits were prior authorization issues and missing or inaccurate data. 

These are issues that can often be addressed through outsourcing, especially if you’ve tried handling these challenges internally with little success. 

At 3Gen Consulting, we understand that there are many reasons why revenue cycle leaders might want to outsource part or all of their billing and coding operations. To explore your options, set up a call with us today.

References
[1] J. Lubell, “Addressing another health care shortage: medical coders,” American Medical Association, 19 April 2023. Available: https://www.ama-assn.org/about/leadership/addressing-another-health-care-shortage-medical-coders.
[2] K. Forston, “Burnout: The Struggle is Real,” AAPC, 2 April 2020. Available: https://www.aapc.com/blog/50072-burnout-the-struggle-is-real/?srsltid=AfmBOopeUgUI9ds77NAyJWnWJ8kRvLNA6UO63XrB5j-5mO88l9iBSBHP.
[3] J. Ray, “Nonprofit Hospitals’ Cash Flow is Crunched. Can Leaders Right The Ship?,” HealthLeaders, 28 August 2024. Available: https://www.healthleadersmedia.com/revenue-cycle/nonprofit-hospitals-cash-flow-crunched-can-leaders-right-ship.
[4] S. Vogel, “Providers say claims denials are increasing: survey,” Healthcare Dive, 25 September 2024. Available: https://www.healthcaredive.com/news/provider-claims-denials-increase-2024-experian-health-study/727999/#:~:text=Nearly%20three%20in%20four%20providers,up%20between%202022%20and%202024.

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Providers Are Pushing Back on Denials in Medical Billing. Is it Your Time to Join?

Healthcare providers across America burned almost $20 billion dollars in 2022 on medical billing accounts receivable – and it all went to chasing down denials and delays with payers [1]. The numbers look even more disheartening with a focus on private plans. 

What’s worse is over half of that spend was wasted on claims that should have been paid when the claim was submitted – payers are burning provider resources as a stall tactic. A survey of 516 acute care hospitals found that almost 15% of all claims submitted to private payers are denied from the beginning. 

This is money, time, and effort that can be better spent. Healthcare providers face the most complex revenue cycle environment in history, with advancements like AI being used against them – which is why now is the time providers should consider taking a new kind of action. 

So, I was glad to see the news in July that The Health Equality Network stepped up to send a letter to CMS about the problem of medical billing denials, also including a range of congress members. Here are some of my favorite points [2]: 

  • “Claims are often denied without cause and lead to financial and emotional distress for individuals already burdened with the stress of healthcare issues.”
  • “Medicare Advantage plans…are now inundated with prior authorization requirements and coverage denials.”
  • “They (UnitedHealthcare) were sued last year for using an artificial intelligence algorithm to wrongfully deny elderly patients care.”
  • “Insurance denials and prior authorization requirements affect minority and lower-income populations at a much higher rate.”

The main takeaway is that providers should focus now on tracking denials in medical billing and understanding the impact of how much money and staff time is being wasted. As more providers push back on this disturbing trend, everyone should be able to make a case for how they, their staff, and their patients are being impacted. 

For many providers, doing this in an accessible and accurate way will mean outsourcing medical billing by working with a third-party vendor who has perspective on whether their investment is normal or whether they’re being taken advantage of. I am proud that 3Gen can offer this kind of support during times like these.

References
[1] D. Muoio, “Providers ‘wasted’ $10.6B in 2022 overturning claims denials, survey finds,” Fierce Healthcare, 22 March 2024. Available: https://www.fiercehealthcare.com/providers/providers-wasted-106b-2022-overturning-claims-denials-survey-finds.
[2] Healthcare Equality Network, “HEN Sends Letter to HHS Secretary Becerra and CMS Administrator Brooks-LaSure On Coverage Denials,” 3 July 2024. Available: https://www.healthcareequalitynetwork.com/hen-writes-letter-to-hhs-cms.

 

Hemant Apte, Chief Executive Officer in

Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.

How the No Surprises Act Has Impacted Providers and Physician Billing Services
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How the No Surprises Act Has Impacted Providers and Physician Billing Services

The No Surprises Act (NSA) brought with it large amounts of speculation on its impact on physician billing services, and now, in 2024, it’s been in play long enough to finally understand how it’s affecting providers and how they’re responding. 

Two years in, the industry is seeing results that anyone responsible for physician coding and billing services should consider – and information they should evaluate as they consider their relationship with physician billing companies as a potential solution. 

Looking Back at the No Surprises Act

The No Surprises Act went into effect on January 1, 2022, shaking up physician billing services around the country. It was intended to address “surprise medical bills” – the issue of insured consumers receiving care with an out-of-network provider they didn’t choose. They’re then shouldered with a bill they weren’t expecting and didn’t authorize. This issue happens in 20% of emergency department visits and around 9-16% of in-network hospitalizations in relation to services from providers like an anesthesiologist. Since the bill took effect, there have been developments around the arbitration process, dispute resolution, and the impact on patients. 

When the act first took hold, the American Medical Association stepped in to help physicians understand their rights when caring for patients who obtained out-of-network services without their knowledge [1]. It put together a toolkit that focused on three operational challenges that physicians would need to address. 

  • Notice-and-consent requirements which physicians are now required to make publicly available for all patients enrolled in commercial health coverage
  • Rules around emergency services and post-stabilization for hospitals
  • Their obligation to provide good faith estimates for their uninsured and self-pay patients 

Impact of the No Surprises Act on Physicians

While consumers have generally celebrated the outcomes of the NSA, many are realizing that providers are now experiencing financial hardships and other burdens. Out of all providers, physicians’ groups and air medical transportation companies have shouldered much of the burden in their work to provide emergency services. This is reflected in the fact that bankruptcies in healthcare jumped 84% between 2021 and 2022, with many in the industry directly blaming the NSA along with other factors like payer contracts and higher costs of debts [2]. By November 2023, 30 public companies had pointed to the NSA as a risk to their financial performance [3]. 

Today, providers are open about emerging issues that are affecting them and their efforts in physician coding.

Claims Are Backlogged

One of the downstream effects of the NSA is the impact of the dispute and settlement process. When the law was created, it included requirements to address negotiations and settlements between providers and payers to handle services rendered outside contractual agreements. This falls under the “open negotiation” process, meaning that if the parties don’t come to an agreement within 30 business days of open negotiation, the decision then falls to the Independent Dispute Resolution (IDR) process which involves submission to an independent third party. The case can vary depending on the insurance plan type, sometimes following federal rules and sometimes falling under a process determined by the state. 

The result has been increased complexity and slower processing in the healthcare revenue cycle. The U.S. Government Accountability Office (GAO) reports that while federal departments expected around 22,000 disputes through the IDR process in 2022, over 490,000 were submitted between April 2022 and June 2023. As of June 2023, a full 61% of the disputes were unresolved [4]. 

Increased Resource Use of Physician Billing Services

Of course, these new requirements don’t exist in a vacuum. Physicians have had to employ additional resources to meet the requirements of the act. Providers are required to inform every patient about protections against balance billing and have an obligation to provide good faith estimates for their uninsured and self-pay patients. 

All this is happening in the midst of a healthcare revenue cycle staffing shortage that is affecting physician coding and billing across the board. According to Becker’s Hospital Review, 32% of revenue cycle leaders report challenges with hiring and training staff in 2024 [5]. This issue directly impacts provider revenue cycle outcomes, since shortages contribute to already growing denial rates. 

Processes That Are More Complex

Complexity is an ongoing concern in physician medical billing. Offices face falling reimbursement rates, shifting payer relationships, and increasing costs. In addition, many are inundated with pressures to use data to make increasingly productive decisions. The NSA only increased many of these demands. 

Leaders in charge of physician billing services have to adapt their revenue cycle to document and address low payments from payers they’re not contracted with. They also have to augment their staff with professionals who understand physician billing services and have the physician revenue cycle management and contract management skills that align with NSA processes. 

In response to pressures from legislation like the NSA, many healthcare leaders are looking into the support of physician billing companies. These partners can help improve revenue cycle results, increase efficiency, and manage the future impact of the act. To explore some of your options, contact us today. 

 

References
[1] A. Robeznieks, “The No Surprises Act is in effect. What physicians need to know.,” American Medical Association, 14 January 2022. Available: https://www.ama-assn.org/health-care-advocacy/access-care/no-surprises-act-effect-what-physicians-need-know.
[2] F. J. Thomas, “84% Increase of Healthcare Bankruptcies Due to No Surprises Act,” WorkersCompensation.com, LLC, 8 October 2023. Available: https://www.workerscompensation.com/daily-headlines/84-increase-of-healthcare-bankruptcies-due-to-no-surprises-act/.
[3] S. Biswas and B. Yerak, “Surprise Medical Billing Law Heaps Pressure on Healthcare Providers,” Dow Jones & Company, Inc, 28 November 2023. Available: https://www.wsj.com/articles/surprise-medical-billing-law-heaps-pressure-on-healthcare-providers-f9583485.
[4] U.S. Government Accountability Office, “Roll out of Independent Dispute Resolution Process for Out-Of-Network Claims Has Been Challenging,” 12 December 2023. Available: https://www.gao.gov/products/gao-24-106335.
[5] A. Cass, “The biggest challenges facing revenue cycle departments in 2024,” Beckers Hospital Review, 24 January 2024. Available: https://www.beckershospitalreview.com/finance/the-biggest-challenges-facing-revenue-cycle-departments-in-2024.html.

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