As per a survey conducted by Black Book Market Research, outsourcing of complex claims to a specialized medical billing company increased from 20.4% in 2013 to 39.8% in 2016 for almost all US hospitals. Why is there a steep rise in outsourcing medical billing? In the following paragraphs, we will try to understand why most medical practitioners are choosing outsourcing over having an in-house billing team.
Understanding In-house billing Setup and Running Costs
There is a lot of overhead charges involved in setting up an in-house billing team. For instance, hiring experienced staff takes a considerable amount of time and resources. Providers also need to spend on employee salaries and benefits such as bonuses, sick pays, vacations, insurances, and training costs. Purchase and maintenance of the latest billing software and the cost of office equipment and supplies also demand significant investment.
It is evident from the aforementioned points that maintaining an efficient billing team is not only cumbersome but also expensive. From the salaries of medical billing staff to the overall setup and running costs, there are various additional costs that need to be considered. Regular monitoring and supervision of billing staff also take a considerable amount of time that could have been used to provide medical care instead.
The rise in Medical Billing Outsourcing Trend
According to the Market Research Engine, by 2024, the global medical billing service industry will eclipse $16 billion in total value. The reason behind this growth is the need to reduce labor in-house and boost revenue streams. Also, the shift from ICD-10 to ICD-11 will push more providers to outsource billing services to a third party. With outsourcing, providers will be saving themselves from the unnecessary hassles of hiring and retaining billing staff. Not only overhead expenses will reduce but the need to invest in infrastructure and technology will also get eliminated.
By hiring reliable medical billing companies, a growing number of practices are saving time and money. These companies are offering them better billing and claim collection rate due to which claim rejections have reduced to a great extent. Maintaining an in-house billing team costs 10-12% of your total revenue. Whereas, billing service providers charge somewhere between 4-8% of the net collection. It means, outsourcing is not only cost-effective but also efficient in streamlining your revenue cycle management.