Medical billing companies play a big role in the operations of various healthcare facilities. Instead of wasting time chasing payments, practices like yours can tap medical billing services in Florida to outsource the collections process. This way, you can focus on providing better patient care without worrying about when payments will come.
Your healthcare business can enjoy the benefits of medical billing services in exchange for a fee. So the question now is this, how do healthcare billing companies get paid and how much should you expect to shell out?
In this blog post, we’ll give you a preview of medical billing fees and the payment methods for medical billing companies you can use.
What are Medical Billing Companies?
Medical billing companies offer services that handle the billing and coding processes on behalf of healthcare providers like you. Their main purpose is to oversee denial management in healthcare,
ensure accurate and timely payments for all the services that you rendered to patients.
Due to the busy nature of the healthcare industry, many practices choose to outsource their billing and coding to free up their staff. It also allows them to keep up with the changing regulations of the industry.
Aside from that, healthcare providers like you often partner with outsourced medical billing companies to organize their revenue cycle management. This way, you can allocate your resources toward better patient care.
Instead of maintaining their own team, healthcare providers can access experts in coding, billing, and insurance reimbursement at a lower cost. This will also save you from payment denials and managing denied claims.
The Process of Medical Billing Companies
To understand how medical billing companies make profits, it’s important that you know first how their service works. This way, you’ll grasp how and when they receive their payments from practices.
Here’s the typical process that a medical billing company in Florida follows:
1. Gathering Patient Information
When you partner with a medical billing company, they will first collect relevant patient information. This includes your patient’s demographics and insurance details. It’s important for them to ensure the accuracy of patient data for faster claim submission and reimbursement.
2. Insurance Verification
Once they have all your patient’s relevant information, the medical billing service will verify the insurance coverage. This way, you’ll know if the services your patient got from you are covered by their policy. It’s crucial to prevent rejected claims and payment delays.
3. Coding Diagnoses and Procedures
The next step in the process is medical coding. Medical companies have in-house certified medical coders who will accurately code all the diagnoses and procedures your patient received. This process needs to be accurate to avoid problems once the claim is submitted.
4. Preparing and submitting the claims
Once the medical billing company has the information they need, they will prepare the claims for submission. It will be submitted electronically to respective payors, or via traditional mail, whichever is preferred.
5. Follow-Up on Claims
To ensure that you’ll get your much-needed payments, the billing company will conduct follow-ups with payors. They will also handle any rejections or issues that will slow down the process.
6. Payment Posting
After the billing company collected your accounts receivable, they will post the payment to your system. You’ll also receive payments through electronic funds transfer.
7. Denial Management
What if your claim has been denied? Your billing company will continue to follow up with your payor to appeal and settle the claim. They will resubmit your claim and fix any issues that have been raised, which caused the denial.
How do medical billing companies get paid?
When you partner with a billing company, it’s crucial that you understand how their fees work. Each company has varying rates, which may or may not suit your practice. Below are the most common payment options you may encounter:
1. Percentage-Based Fees
This first payment model is a very common option among medical practices. With this, a billing company will charge you a percentage of the total claims they collected on your behalf. For example, they may charge you 4% to 10% of the total reimbursement you received. This can be higher or lower, depending on certain factors
The good thing about the percentage-based system is it encourages medical billing companies to maximize their collections for your practice.
2. Flat-Rate Fees
Do you want more control over your billing fees? Then a flat-rate fee-for-service might be the right option for your organization. With this setup, you and the billing company will agree on a fixed rate before they start the service.
Under this capitation payment system, you’ll pay the billing company a fixed monthly or yearly rate, regardless of the number of claims they are collecting. It allows you to predict the cost, but it may not be a good choice if you have a fluctuating volume of claims. In some cases, practices like yours may end up paying more than intended.
3. Pay-per-Transaction Model
If you choose this payment model, you’ll pay the billing company a fee for each claim they process and collect. It allows you to predict the cost and have more control over your fees, especially if your practice always experiences a sporadic number of claims.
Overall, each of these payment models has its own set of pros and cons. It’s important that you assess which one works best for your practice to maximize profits and minimize fees. Also, don’t hesitate to ask for your options when consulting with a medical billing company.
Factors Affecting Medical Billing Company Fees
As with any service, a billing company may charge you varying fees based on certain factors. Make sure you check each one to see which works best for your organization. In general, you have to consider the following factors:
1. Complexity of the Billing Process
If your practice has complex billing requirements, you should expect a higher billing fee than usual. This is usually the case if you need unique coding or you’re working with multiple payors. Since your claims processing needs work, the medical billing company will have to charge you extra.
2. Volume of Claims
You also have to consider the number of claims you’re asking the billing company to process. Higher claim volumes require more staff and time to process, which will result in potentially higher fees.
3. Types of Healthcare Services You Provide
Another thing you should think about is the type of services your practice provides. Some healthcare procedures or services require intricate documentation, which means billing companies would have to charge more fees.
4. Payer Mix and Reimbursement Rates
The number of payors you’re working with will also affect your billing fees. For example, if your payor has a history of low reimbursement rates, the billing company will need to give it additional attention. They may also have to perform more follow-ups, leading to higher fees.
How to Ensure Secure and Timely Payments
The job of medical billing companies is to ensure the fastest possible time for practices to receive payments. This way, their clients will make the most out of the fees they are paying.
To speed up payments, billing companies will have to ensure the following:
1. Accurate Documentation
Accurate documentation is the very foundation of fast and hassle-free claim reimbursement. Billing companies do this through proper coding practices and collecting all supporting documents from healthcare organizations. All these documents will be attached to the claims to reduce the risk of denials or rejections from payors.
2. Efficient Claim Submission
When you partner with a billing company, your practice will enjoy a more efficient claim submission. Unlike most healthcare providers, billing companies have specialized systems in place to speed up processing right after you’re done providing the services to patients. They also utilize electronic claims submission to avoid errors and guarantee fast processing.
3. Proactive Follow-ups
Claim submissions don’t always go smooth sailing. This is why medical billing companies have to perform numerous follow-ups with payors to know if there are issues causing delays. In case there are problems, the billing company you hired will settle any matters until you’re finally paid.
4. Electronic Payment Systems
Before, billing companies have to snail mail documents to file claims. Nowadays, electronic systems allow for faster and more efficient payment processing for patient payments and insurance reimbursements. This way, practices no longer have to wait 30 to 90 days for payments to arrive.
Conclusion
Partnering with a medical billing company will streamline your collections process. It will also free up your staff from the tiring process of processing claims, allowing you to focus your time on better patient care.
Still, you should be aware that each billing company charges fees differently. It’s crucial that you compare your options and discuss them with your chosen company before signing up the contract. This way, you can maximize your collections and manage your fees in the long run.