Medical billing and coding are prominent issues in the healthcare industry. Physicians lose about $125 billion annually as a result of poor billing practices. Two major factors, billing errors and failure to stay updated on medical billing rules, are responsible for a loss in physician profits.
Approximately 80% of medical bills contain errors. Insurance companies are strict on billing and coding practices, and they are quick to reject a medical claim. As a result, the physician must undergo a second lengthy process to resubmit a claim and may have to wait several months before receiving payment. The second major issue is the failure of physicians to stay up-to-date on medical billing rules. Rules are constantly changing, which requires the use of resources in software and education. Proper medical billing is essential during a time when Healthcare Reform has provided insurance to an additional 30 million Americans.
In addition to losing money to insurance companies from claim denials, physicians are also struggling due to inability of patients to afford their healthcare. Some doctors are outsourcing medical billing to increase their revenue. Initially, outsourcing medical billing seems expensive, but over time it proves to be very beneficial. Most billing services charge on a percentage basis, so they will only charge based on the revenue they add to the practice. Furthermore hiring a staff member solely for billing purposes can be expensive, due to the cost of training and salary. By outsourcing medical billing, one can also reduce the amount of time that doctors and nurses spend on billing and allow them to spend more time on caring for the patient. Lastly, certified billing companies are compliant with the changes in healthcare laws and have billing and coding expertise.
On the contrary, some practices still believe that in-house medical billing is most cost effective. Some argue that problems can be addressed more promptly. Physicians are also able to control productivity levels, and the billing staff has direct communication with physicians if it has a question.
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