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Why I Won't Outsource Medical Billing (Part 1)

Why I won't Outsource Medical Billing

  • We can’t afford to spend money on extra services.

  • It will make billing more complicated.

  • We want control of billing and collections.

  • Our community needs these jobs.


Medical billing is one of the most crucial components in the healthcare business equation. However, the healthcare industry has created a complex monster...

The opportunities for mistakes…astronomical

  • 250 people may potentially be involved in a single patient's bill 1

  • 55% - patient bills containing errors

  • 30% - incorrect insurance verifications 2


Economic Impact of Billing Errors

  • $17 billion lost to admin. costs due to errors

  • $125 billion lost to poor billing practices 4

  • $58 million in improper Medicare CAH outpatient payments

  • 92% caused by insufficient/incorrect documentation

  • $3.4 billion in improper Medicare hospital outpatient payments

  • 95% caused by insufficient/incorrect documentation

  • $1.3 billion in improper Medicare inpatient payments 5

  • 47% caused by insufficient/incorrect documentation

  • 50% caused by medical necessity errors


Rural Healthcare Facilities in Trouble

  • 673 rural hospitals currently vulnerable to closing

  • 60+ rural hospitals closed since 2010

  • 68% of closed facilities were CAH

  • 99,000 healthcare jobs at risk


Symptoms of a Struggling Facility

  • Elevated days in A/R (more than 55 days)

  • Denials increasing

  • Net collections rate declining

  • Claims not received by payers

  • Lack of internal business process controls

  • Difficulty recruiting and retaining qualified and experienced staff


Failure to Adapt Critically Impacts Bottom Line

  • Decrease in volume

  • Demographic shifts

  • Changes in payer mix

  • Reimbursement reductions

  • Deteriorating physician relationships

  • Overzealous spending

  • Poor financial management


Typical (Negative) Solutions

  • Downsize through layoffs or attrition

  • Reduce the scope of services provided

  • Micro-manage employees’ tasks & time

  • Make administrative pay cut

Seven Positive Solutions to Increase Profitability

  • Improve the hospital’s reputation through high patient satisfaction. Without a good reputation a hospital will not achieve success financially or otherwise. Its reputation has a fundamental influence on its bottom line.

  • Re-think billing and collections. When patients don't clearly understand their financial responsibilities they are less likely to pay on time (or at all).

  • Focus on communication strategies. Communication is a crucial link between your clinical efficiency and a patient’s experience.

  • Increase patient satisfaction by providing high quality customer service.

  • Focus on limiting readmission regulatory penalties.

  • Reduce unnecessary testing whenever possible.

  • Get a complete understanding of your revenue cycle performance


For more information, contact Medical Recovery Services

(816) 229-4887

Medical Recovery Services is a full-service revenue cycle company assisting

hospitals and surgical centers in achieving their full earning potential since 2004.

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