9 Common Myths About Medical Billing Outsourcing

9 Common Myths About Medical Billing Outsourcing

Medical coding and billing might be the most important part of a medical office or facility, though they are seriously underestimated.

Accurate medical billing and coding has a direct effect on the bottom line of a medical office. Verifying patient records, following up on claims denial, maintaining compliance with medical coding regulations – these all affect the cashflow and financial viability of a healthcare office.

Over the past few years, many medical offices have made medical billing and coding a remote job. Many also use outsourcing via third-party medical billing and coding companies to improve efficiencies.

Let’s look at some of the most common myths about medical billing and coding.

1. Medical Billing and Coding are the Same Thing

Though medical billing and medical coding are often referred to together as one thing, they are two separate pieces of one process. In some medical offices, these two jobs may be performed by the same person, but they are indeed two distinct sets of skills and processes.

Medical coders take the information from a patient visit and transcribe it into universally-recognized codes that make up the medical record of that patient visit. This information will be handed to the medical biller who submits that information to the insurance company. Medical coding describes symptoms, injuries, treatments, diagnoses, prescriptions, and procedures. The codes must be accurate and describe the visit in detail, for compliance. This information goes into the electronic health records of the patient, and is used by the insurance provider to fill the claim and pay the medical office on behalf of the patient. Accuracy is very important, so that the insurance claim is properly paid.

Medical billers takes the coded transcript of the patient visit, and inputs that information into special software. This information is submitted to the patient’s insurance company as a claim.

After the insurance company pays their portion, the remaining amount is billed to the patient. Any co-pays and deductibles are figured into this revised amount. Medical billing, like coding, relies on accuracy and attention to detail.

Medical billers and coders work together to make sure patient visits are recorded accurately, and that record is passed on to the insurance providers, so the medical office gets paid correctly, and the patient is billed for the remaining portion accurately. Billers and coders are an essential part of the healthcare system, interacting with the healthcare provider, insurance companies, and patients.

2. Medical Coding and Billing is Just Data Entry

While there is some data entry involved, suggesting the entire medical coding and billing process is merely data entry is far from true. This important job requires the medical coder to have a deep understanding of ICD-10, the coding standard, as well as being able to recognize incorrect or inaccurate codes. The information submitted to the insurance companies by the medical biller must be accurate, or the claim may be delayed or not paid, causing revenue issues for the medical office.

Medical billing is a complex and nuanced process of submitting medical claims to insurance companies so they pay pre-determined fees according to the patient’s coverage. This process also involves collecting amount from patient’s without insurance coverage. Medical billing requires understanding of medical coding, as well as claim submission, denial management, claim resolution, and management of accounts receivable. Medical billers must make sure the information in a patient chart is accurate, so the billing for specific medical services is correct and justified.

3. It’s Easy – Anyone Can Do It

Medical billing and coding is not easy. Medical coding requires up-to-date-knowledge of ICD-10 and other medical coding, as well as being able to interpret the patient condition and visit into the correct codes. Medical coding training usually takes several months to a year, to properly train students for entry-level medical coding work. Because medical billing and coding is computer-based work, it is perceived as easier than medical assisting or phlebotomy. Medical coders and billers must still understand anatomy, physiology, medical terminology, and the medical coding standards, as well as navigating the insurance processes for the different payers. They must complete this work quickly and accurately, there cannot be mistakes.

4. Outsourcing is Definitely Worse than In-House Billing and Coding

The biggest arguments for choosing in-house hiring over outsourced billing and coding are:

  • Outsourcing is more expensive than in-house.
  • In-house provides more control over revenue
  • In-house is higher quality and more accurate than outsourcing.

Some medical offices may prefer to have in-house medical billing and coding, this may bot always be the cheapest option. Hiring coders and billers require you to hire them on a regular schedule, usually 9-5, as well as paying taxes and benefits for each employee. Third-party medical billing companies are usually a fixed amount, and you might save money vs hiring in-house. For some medical offices, the outsourced company may also be able to reduce operational cost and improve monthly patient and insurance collections.

What about control over revenue? Many medical offices feel they have better oversight if the billing and coding team is in-house. This oversight can come with a cost, in managing, training, employee turnover, supervision, and hiring. One reason doctor’s offices may outsource billing and coding is to pass those responsibilities to the outsource company. They can focus on communicating with the insurance companies, submitting claims, accounts receivable, collections, and reporting.

5. Outsourced Medical Billing and Coding is Lower Quality

For smaller medical offices, finding good candidates can be challenging, and using an outsourced third-party medical billing and coding service can be a viable option. As the physician’s office gets more patients, the needs for in-house staffing can increase. If one person was doing billing and coding previously, you might need a person for medical coding and another for medical billing. Hiring new employees means more training, and onboarding. Some medical offices use a third-party medical billing and coding service to fill this need.

While larger healthcare facilities may have in-house medical billers and coders, outsourcing to billing and coding companies doesn’t necessarily mean a drop off in quality. Such companies have the up-to-date software, the infrastructure, and staff to handle several medical offices. Many medical billers and coders are employed by these companies, which provide added efficiency for healthcare facilities that use their services.

6. Outsourcing Can be Risky for Patient Health Information

Third-party medical billing companies must be HIPPA-compliant and ensure that Patient Health Information (PHI) is secure from data breaches. Most medical billing outsourcing companies use several layers of encryption and protection to make sure that medical billers do not disclose confidential patient information. Special software that is designed for medical billing claims submissions uses this encryption to protect patient data.

7. Medical Billing Outsourcing is Only for Large Companies

While medical billing companies seek out larger clients, the bulk of work for these companies comes from small to mid-sized medical offices and facilities. For many growing healthcare offices, outsourcing the medical billing duties is common.

The conventional wisdom that only larger medical facilities outsource medical billing work is a fallacy. Many smaller healthcare offices benefit from letting a third-party handle the revenue cycle for them so they can focus on providing excellent patient care.

8. A Few Errors Don’t Matter

Errors in medical billing and coding should be kept to an absolute minimum. When errors in coding and billing are in the system, it cause payment delays to the medical facility. An abundance of errors can affect your revenue stream. Errors may also cause the medical office to be audited. A few errors in medical coding and medical billing are a few errors too many.

9. Undercoding vs Upcoding

Upcoding is when a medical office bills for services that were not performed, or for procedures that are more complex than were actually performed. How does this happen? Some causes of upcoding are the physician not providing the right data, typing in a wrong medical code, or attempting to inflate a medical bill (which is unethical and illegal).

In an attempt to avoid upcoding, some medical offices may have a preference of undercoding, which is also illegal, and the same as upcoding, it can result in fines or even criminal prosecution. Undercoding will also result in a loss of revenue for the medical office. Some medical offices, on occasion, have undercoded to avoid audits or to reduce a patient's superbill. Perhaps they did not know what the consequences would be.

As we have said several times, accuracy in medical coding and billing is vitally important. Medical coders and billers must properly encode medical records, and properly bill the insurance companies and patients. Being fined or facing audits can be a big obstacle for medical offices. Accuracy, integrity, and properly coding medical records are more than a best practice, they are a necessity.

Take the First Step Towards Your Medical Billing and Coding Career

Campus offers a Medical Billing and Coding certification program that can be completed in 36 to 42 weeks, depending if you take daytime or nighttime classes. This program is fully online; all of the coursework can be done remotely from your computer with a broadband internet connection.

If you see working as a medical billing and coding professional in your future, contact our Admissions department today, and they can answer any questions you have about the course.

We’re here to help you start a rewarding career in medical billing and coding.