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.
