Medical Billing Outsourcing; A Cautionary Tale

My experience in medical billing software training and support gives me an opportunity

to directly observe what works and what doesnt work in the small medical practice and to share that information.

Several months ago, I observed firsthand what can go wrong when outsourcing medical billing and coding is based solely on price. Only the names have been changed in the following true story:

Recently, a medical biller named Mary called me to request my help exporting patient data from her medical billing software for one of her physician clients, Dr. Smith. He had given her 30 days notice that he was switching to a new medical billing company. This surprised me because Ive worked with Mary in the past and she is very knowledgeable, meticulous, and conscientious. Mary felt she had done a good job for this doctor and asked what prompted him to make this decision. The answer was simple. Dr. Smith had been approached by a medical biller named John offering a rate of 6% rate instead of the 7% he was paying Mary. I agreed with Mary that 7% is a very reasonable rate for Dr. Smiths pediatric practice. Based on the amount of work required, there was no way she could afford to match the rate John offered.

I exported the doctors data as requested and sent the data file to John. A week later, he called me with some questions and I discovered he was doing Dr. Smiths medical billing on a free web-based system. I knew Dr. Smith ran a busy practice and I suggested to John that he might need a more robust and efficient medical billing software product which he eventually purchased from us. While installing the new system, I asked John how many modifier fields he wanted displayed on the transaction entry screen. He asked me, Whats a modifier? I could hardly hide my shock when I explained what an insurance modifier is. It was at this point John realized why some of the Dr. Smiths procedures were not being paid. I recommended that, if he wanted to keep this account, he obtain some medical coding training. I emphasized the importance of acting immediately to avoid any further impact to Dr. Smiths cash flow. John was clearly in over his head.

It is perfectly legitimate for Dr. Smith to seek the best price possible when outsourcing services. However, in this case, I suspect he wont be realizing that 1% savings anytime soon. The most important thing he failed to do was request references and then CALL them. In addition, when the rate is exceptionally low, its not a bad idea to ask if any of the billing work is being done overseas. This is a concern due to HIPAA privacy issues.

Keep these recommendations in mind when you consider medical billing Service.

by: David Harvey

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