Many physician practices have begun using third-party billing companies to alleviate their staff of complex and time-consuming billing processes.
Taylor Johnson, manager of physician practice development for the American Medical Association, said in a recent AMA podcast that outsourcing billing to third parties can be critical to improving physician practices’ efficiency.
“In many small practices, the staff involved in billing wear many hats, offloading the billing process can enhance overall practice efficiency by redirecting team members back to patient care,” she said.
Sea Chen, MD, the AMA’s physician director of practice sustainability, added that billing tasks created an extra burden for him and his staff when he was a clinical radiation oncologist in private practice. Dr. Chen and Ms. Johnson outlined pros and cons of utilizing third-party billing companies:
Pros:
“The third-party billing company can manage invoicing, collect payments, … handle the claims processing and submission, or follow up on denied or unpaid claims,” said Ms. Johnson, who worked as a practice administrator for several physician private practices before joining the AMA.
She added that because these companies are “strictly focused on billing,” they can significantly streamline the process, “in turn, maximizing the practice’s revenue and maintaining an up-to-date knowledge base of codes and regulatory changes.”
Cons:
Cost is a central concern for physician practices seeking a third-party billing company. According to a March 26 AMA article that outlined the podcast discussion, rates for these companies can vary greatly among third-party vendors.
Data security is another potential con, and the AMA encourages physician practices to have a formal business associates’ agreement that defines the expectations regarding the safety and security of patients’ sensitive information. The agreement should also include a plan for responding to data breaches.
Without proper planning and oversight, physician practices can become too distant from the billing process and lose control of it altogether. Physician practices should have a “transparent, service-level agreement establishing the expectations and obligations of both parties,” according to the article.
“While I think third-party billing companies can offer some essential services, practice owners, practice leaders can really risk losing control over this entire billing process, being that it’s very complex,” Dr. Chen noted. “You, as a practice owner, should continue to monitor and manage third-party billing companies very carefully.”
Ms. Johnson also recommended holding regularly scheduled meetings with the vendor to review the accounts receivable and monitor performance.
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