Using a Billing Company versus Hiring a Biller When Starting a Medical Practice Using a Billing Company versus Hiring a Biller When Starting a Medical Practice

Using a Billing Company versus Hiring a Biller When Starting a Medical Practice

Doug Graham
Senior Management Consultant and Director of Concierge Medicine Services  for DoctorsManagement

This auditing and compliance “Tip of the Week” was originally published by the
National Alliance for Medical Auditing Specialists (NAMAS), a division of DoctorsManagement.

One of the most important considerations when starting a new medical practice is getting claims paid as soon as possible. The same is also true for a mature practice; however, cash flow is vital when a new practice is paying the bills with working capital from a loan and very little revenue is coming in from the insurance companies for the first 4-6 months. The last thing a new doctor wants to deal with is issues arising from unpaid medical claims.

There are numerous, and I mean numerous, companies that do medical billing. There are also vast amounts of electronic health records companies that have practice management software with billing functionality and their own revenue cycle management team (medical billers). Lastly, there is “likely” at least one person looking for a new challenge or opportunity in the area of the new medical practice. So the question is: which one of these options is going to get the practice off to the best start possible? Based on my experience, a practice should consider two of these options.

The option I do not recommend is the option that requires hiring a biller. Before all the billers reading this voice their disagreement-let me explain. I think we may even be friends by the time you finish reading this article! If at all possible I would always, yes always, recommend that a practice have internal billing. In other words, do not use an external or outsourced billing company. This may sound confusing, but I want to refer back to the point I made at the start: timeliness and accuracy of claims the day the practice opens are key.

The process of getting a practice open from scratch is fraught with numerous hurdles and chronological necessities. The projected opening of a new practice is largely based on 1) when the practice can get into the office space and, 2) when can the provider(s) become credentialed with the relevant plans to the specific geographical area? If the practice were to try to recruit a biller in the area, how do we know who is going to be in the job market at that time? What if we find someone in the first week we put an ad out? Are we going to pay them for two months until we open, and who is going to train them? A more frightening thought… what if we haven’t been able to identify a suitable candidate and we are a week away from opening? I cannot in good conscience put a client into those kinds of situations while success from day one is critical.

I would recommend the practice consider using a billing company or using the revenue cycle management group that is affiliated with the electronic health record company it chooses to use. The fees that these companies charge (usually 4-8% of collections) are going to be more than what you would pay a biller but again, the practice needs money in the bank as soon as possible. These companies will make you sign a contract for at least one year but during that time you will have a chance to develop someone in the practice to be the biller or start recruiting a biller after 10 months or so. The process is always more streamlined for a provider to ask questions of the billing team when they are in the office rather working through a remote-style setup. So, at some point, do your best to develop or hire a competent biller – just not right away.

What to do next…

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