Medical Billing Percentage Pricing – An Understanding
Often when a Provider or Medical Group is looking to outsource their medical billing and collections for the first time, they are perplexed by the Percentage pricing model. Since they have never outsourced before and were depending on their own staff for handling the medical billing and collections activities, they are not in a position to understand the benefits of the ‘success fee’ model. Another major area of confusion and concern will be on what services are covered under this model. Let us discuss these concerns and try to make it easier in understanding this model of pricing:
Percentage Pricing Model
The percentage pricing model is also called the ‘success fee’ model since the outsourcing company gets paid for its services based on successful collections. The collections that are included for the percentage calculations will typically be the Gross collections that include both payments from the Payers, Patients and Self-pay category. The percentage pricing model is a ‘win-win’ situation since the outsourcing company gets paid only based on the collections. So the onus for doing everything possible to increase the collections of a Practice or Medical Group rests with the Outsourcing Company.
Scope of Services Covered
The biggest disconnect with the Percentage pricing model occurs while understanding what all Services are included. Typically all the Revenue cycle services will be included that includes – Demographic entry (if applicable), Coding (if Providers do not code), Charge Entry, Claims transmission, handling the Transmission rejections, Payment Posting, AR follow-up and Denials Management. Sometimes, Credentialing, Insurance Benefit Verifications and/or Patient calling can also be included for a slightly higher fee.
What are typically not included are Patient Statement charges, Software purchase and set-up charges, Document Management in either Software or in the EHR/PMS, Contract negotiation with the Payers, etc.
Obviously, these are not ‘set in stone’ and can always be customized per the Provider or Medical Group’s requirements. One of the reasons why the Percentage fee is always customized and there are no standard rate cards is due to this customization that is possible, along with variations in Specialties, Collections, Software, etc.
Benefits
There are many benefits associated with the ‘success fee’ model. The primary one being, payment based on performance only. Since the Provider or Medical Group pays based on the performance (Collections), the fixed costs of salary and benefits for internal billing staff get removed and the margins for the Practice/Medical Group increases.
The other benefit is that the medical billing and collections are now handled by professionals who have the singular mission of improving the Collections for the Practice/Medical Group, as their fee is dependent on it. This eliminates wastage, improves efficiency and faster cash flows.
Overall, the Percentage pricing in outsourced medical billing is one of the best models, though there are a few states that do not approve of this model. But at a national level, this model has gained wide-spread approval both from the Practices/Medical Groups and also the outsourcing companies.
Benefits of Outsourcing Your Medical Billing
- The medical and healthcare industry is constantly changing. Doctors and medical professionals can use outsourced medical billing services in a bid to keep abreast of the latest rules and regulations. Outsourcing billing services to a Medical billing company enable physicians to focus on patient care and adhere to high standards of medical diagnosis and interventions.
- Physicians who outsource medical billing operations gain distinct benefits in terms of the vast knowledge base that is at the disposal of the medical billing Company. The act of outsourcing also allows doctors and healthcare professionals to manage fewer staff members. This boosts the business bottom line of their medical practice. In addition, medical billing outsourcing enables doctors to network with other members of the medical fraternity.
- Physicians who outsource their billing services to a Medical billing Company can gain timely reimbursements. The Medical billing company will provide an accurate picture of dues realized at regular intervals. This fact helps physicians gain a snapshot of their earnings in real-time. Such information helps Physicians to boost their regular income from a steady increase in their revenue numbers.
- Doctors who chose to outsource their billing risk fewer interruptions in cash flows. This stems from the fact that the Medical Billing companies offer the services of specialists to every client. These specialists remain aware of the latest updates and regulations that attend the medical billing industry. This professional approach helps the Physicians to realize payments from both Insurance and patients far quicker than from doing it in-house within a typical doctor’s office.
- Medical billing companies help Physicians to reduce billing errors, improve patient satisfaction, enhance revenue and ensure compliance with billing regulations. These important aspects animate the medical services industry. Hence, it is always beneficial that every Physician must consider outsourcing their services to a professional Medical Billing Company.
When is the Right Time to Outsource Your Medical Billing and Collections?
Running a successful medical practice means offering the best patient care, carrying out efficient medical billing and collections and ensuring a healthy cashflow. However, only a few medical practices in the US taste the fruits of success. There are many factors that affect the success rates and one of them includes the recent healthcare changes like ICD-10 implementation. The need for upgrading old technology and software, staff training, and implementing new changes have put so much pressure on healthcare practices. Therefore, it has been hard for them to focus on patient care, which is the prime goal. Is it time to outsource medical billing and collections? Well, yes! Let’s discuss why outsourcing is the best solution:
Trained Experts
Since the introduction of numerous healthcare updates, medical billing practices find it hard to provide the necessary training to their in-house staff members. By partnering with a reputed medical billing and collections company, they don’t have to worry about training or recruiting new staff. Medical billing companies train their staff with expert skills pertaining to current standards. Such highly-skilled professionals render unparalleled medical billing services to their clients, making sure there are less to no denials. They also manage the existing AR pile-up to generate revenue.
Avant-garde Technology & Software
Once partnered with a medical billing company, a healthcare practice gets to enjoy the benefits offered by its state-of-the-art technology and software systems, which are upgraded frequently to suit the present standards. The costs involved in outsourcing medical billing and collections are way too less than investing on high-end technology and software systems. In addition, there are maintenance and upgradation costs, which would drain most of the healthcare practice’s finances.
Improve Productivity & Profitability
One of the main concerns of most medical practices is increased claim denials, which directly impacts the revenue cycle. With insufficient training, the in-house medical billing team struggles to deliver error-free claims or follow-up on the denied claims. With an outsourcing partner, medical practices can steer clear of such problems. Its highly-trained medical billing and collections team ensures lesser claim denials and follows up on denied claims on time for uninterrupted cashflow. Some reputed medical billing companies offer credentialing and re-credentialing services as well.
Business Continuity
There are times like employee absence and emergency situations when the business gets affected as a healthcare practice is solely dependent on the in-house team. A medical billing partner makes sure that the business runs at all times without any interruptions since it has an adept team that takes care of all the medical billing and collections processes.
Improve Cashflow
In addition, to claim denials and neglected AR days, there is one other factor that affects the cashflow of medical practice. It is the erroneous payment postings. A reputed medical billing company comes with highly-qualified professionals who post payments with utmost care thereby avoiding errors and ensuring uninterrupted cashflow.
Why Outsourcing Your Medical Billing to MGSI is the Best Option?
While outsourcing Medical Billing services is not a new concept, practices and hospitals are still in a delicate situation when deciding to outsource their billing process. The major cause of indecision is the worry of putting their billing service into wrong hands and the daunting task of identifying the right billing partner, fear of losing control over your business, additional costs and investments if the outsourcing company is not fully equipped to handle your billing services are few other areas of concerns. Nonetheless, more than 90% of the providers agree to the point; outsourcing your medical billing is the best option. Listed below are some key reasons and benefits of outsourcing:
Safe and Secured Billing
A well-established medical billing company follows information security guidelines to protect PHI as per HIPPA compliance. The outsourcing company ensures complete confidentiality and safety of any and all information they handle for you. You can be rest assured, outsource your medical billing process as your privacy and safety is of the highest priority to your billing partner.
Identifying The Right Medical Billing Partner
With the number of billing companies and interminable choices, identifying the right billing partner can be a tussle. However, by doing a little background check with the below checklist, picking up the right choice can be easier:
- Look out for their years of experience in the market
- Ask for client reviews and satisfactory feedbacks
- Current billing and Coding Knowledge
- Experienced team to handle all your specialties
- Verify the Company’s Compliance and Security policy
- Business Continuity plan to tackle an emergency situation
Better Control Over Your Business
It is a general misconception that outsourcing your billing services will reduce control over your business. On contrast, by outsourcing your billing services to a reputed medical billing company, you gain complete control of each process, in fact, with the reduced responsibilities to worry about, you can focus and provide your attention on the key component and financial and practice care enhancement aspects of the practice while not wasting time on the trivial matters.
Investment for Outsourcing Medical Billing
Most of the billing companies provide you with billing software and all the latest equipment required for efficient billing. They have a complete infrastructure and an experienced team to handle all your billing requirements, hence no initial investment is required to outsource your medical billing process.
Reduced Labor and Operational Cost
Outsourcing your medical billing process will reduce your operational cost to a great extent as your billing provider will provide you with most of the billing essentials like billing software, infrastructure, billing and coding staff training, experienced and skilled staff, etc. Furthermore, with the most experienced team handling your billing, you get paid faster thus help your practice increase and save your cash flow.
Conclusion
Outsourcing your medical billing process to a leading medical billing company like MGSI can help you have better control over your billing process, business and will lead to increasing your profit!
About MGSI
While outsourcing medical billing and collections is a wise decision, choosing the right medical billing partner is also very important. MGSI is one of the top medical billing companies in the US, which serves the best in the industry. MGSI is an A+ rated company with Better Business Bureau. Our Florida-based medical billing company has more than 25 years of experience in the healthcare domain, We cater services to Solo and group practices for 25+ specialties in multiple states across the country, hence provides exceptional medical billing services including credentialing and re-credentialing, insurance eligibility verification, AR Follow ups, mobile charge capture and more. We have the latest in technologies and software solutions and skillful professionals to take care of all the medical practices’ needs. It is HIPAA compliant, ensuring high levels of patient data and network security. To learn more details, log on to www.mgsionline.com.