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Why Doctors Say Outsourcing is the Way to Go


Long gone are the days when doctors were strictly focused on giving great patient care and maintaining the optimum health of their patients. In this present day, physicians wear the dual hat as the medical doctor and businessman. We have said, "so long" to those times when your doctor gave your school immunizations, then broke off the needle and gave you the syringe to fill with water to squirt people (that was my flashback when I was six years old). It would be unheard of to hear that we have only one doctor for the entire town we live in who still makes house calls. In addition, those days of billing the insurance company on paper forms is past-history.

Fast forwarding to 2017, the demand for perfection in medical billing is predominant. It is common that doctors use in-house billing/coding personnel. Insurance companies will try to find a way to deny/reject any medical claim. A simple "typo" or wrong date of birth is cause for rejection. This means extra work for the physician and/or staff to make corrections and re-submit the claim. The time taken to do these preventable tasks costs money and does not add value to the practice. If a doctor sees 400 patients per month and their rejection rate is 20%, that's revenue from 80 claims at risk of being thrown down the drain every month. Instead of re-submitting the claim, doctors are taking the loss and "write off" that lost revenue. Another concern that can accompany in-house billing personnel is compliance, or lack there-of. These kinds of practices have possible increased risk of liabilities due to the inattention of un-appealed claim denials and ignored encounter forms.

In-house billers come with higher costs. The burden of paying salaries, benefits, training and purchasing the necessary systems, requires some hefty cash. On top of that, the worry of maintaining computer servers, occasional system upgrades and limited IT support can drain finances. Another issue with in-house billing personnel is when that employee calls in sick, goes on vacation or takes a leave of absence, there is a void that can cause unbelievable strain.

Doctors have found a way to minimize or eliminate the struggles that accompany the usage of in-house practice management staff. As an alternative to closing their doors and working as an employee at a hospital or a medical group, doctors are outsourcing their practice management activities at an alarming rate. The primary factor for the demand of outsourcing is less cost, a higher quality product and increased revenue.

Outsourcing focuses on increasing a practice net yield while decreasing expenses. Outsourced billing companies are known to use ultra-secure cloud-based billing systems that upgrade automatically. Their services can provide periodic reports so doctors can keep control, see trends and prevent claim discrepancies. Plus, they are HIPAA, HL7 and Meaningful Use Certified.

Outsourcing your billing services can ensure your practice will maintain compliance and remain current on all CMS directives. With the feature of a clearinghouse, medical claims are scrubbed to detect errors. These errors are automatically corrected and the claim is then submitted. It is not unusual for a physician practice with in-house billers to have a claim rejection rate above 30%. Outsourced billing companies are known to utilize the clearinghouse technology, which can dramatically reduce the claims rejection rate to under 5%. Once a doctor outsources, they immediately increase their cash flow and their expenses will decrease. It is very likely that when a physician practice outsources their billing, the doctor will see a quantity of under-paid claims and notice the lack of follow-up for unpaid claims, as a result of their previous billing operation. Outsourced billing companies like to pride themselves in being dedicated to regular follow-up on unpaid claims because that is a major area of lost revenue due to not filing in a "timely" manner.

To sum it up, the contrast between in-house and outsourced billing operations are very clear. The "out of pocket" difference is indisputable, and the quality of the outsourced product is undeniable. Once a doctor chooses to outsource, the benefits are superior. There are no more computer software upgrades or buying expensive computers. No more days of being short staffed and over worked. Outsourcing can free up those inhouse employees so they can focus on giving quality health care. The outsourcing solution can increase practice efficiency, boost compliance, and most importantly increase revenue. The outsourcing company insures to have the best interest of a medical practice at hand because the more money the practice generates, the more money they make.

Mark A. Lanton, (CMRM) is founder/CEO of Lanton Consulting, LLC., and specializes in medical revenue management, practice management, revenue cycle optimization and private practice business support. Visit the website at or email

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