ASP for your Billing Service? Think Again!
By, Debra Zandstra-Baker, CEO/ President Synergy Corp.
A PDF version is also available by clicking here!
ASP or "Application Service Provider" technology is really making a push in many industries. But you'd better think twice, then never again - about utilizing it for a medical billing business.
ASP applications are available for practice management systems, EMR systems, customer relation management systems, and even bookkeeping and payroll systems. An ASP for a doctor's office makes the lives of the doctor's staff easier, especially for those without an IT person. There are many ASP medical billing applications now, and they serve a good purpose for many doctor's offices - and that's exactly what they were made for, but these vendors also see a lucrative potential in pushing these apps to multi-client billing services - due to the fact that their money is made primarily via per-transaction fees, and per-user fees. With billing services, there's great transaction volume and people accessing the application.
But, what is the difference between an ASP application and a server-based application for a billing business? There are many, and they are critical! With an ASP, you are accessing your business lifeline, your most important tool, and your client data via the internet. The practice management system is housed on the internet via large servers at the vendors chosen location, and you, your employees and your clients access the data via a web browser or through a remote desktop.
The internet is much more reliable these days than in years past, and outages or down times are fewer and farther between, but they do happen. Imagine having 30 clients in your billing business and your internet connection, or that of your host going down due to a storm, or for maintenance work. We're quite certain that if you started out on an ASP, you would have already given it up at this point in your growth, but let's make the illustration anyway. It's month-end, and you have 20 employees sitting at their desks, already punched in on the time clock, and whoosh! It all goes down. What do you do? Let's imagine your 20 employees make an average of $12.00 per hour. As a loyal and dedicated employer, do you keep your employees on site, paying $240.00 per hour for zero productivity, losing big money with every tic of the clock. Or, do you send them home to make nothing for several hours or for the full day? Either way, not good! How many times in a year are you willing to pay your employees for doing nothing - or risk losing them by interrupting the wages they need to earn? It's not only internet downtime that you need to worry about, but also being turned off due to a lost or misapplied payment. Even the best accounts payable clerks run into little mistakes and oversights.
Down times and outages are detrimental to a billing operation, but even more important, and even much scarier, is the chance of something happening to the company that has almost god-like control of your lifeline - your client data. As a billing service, you invest huge sums of money to pay employees to enter data into your client databases. Each day of data entry makes the database more and more valuable as more and more information is accumulated. Are you sure you want to give control of this precious stuff over to someone else?
Allow me to share a true story with you. A couple of years ago, on what started out as just a normal work day at Synergy, our phones started ringing practically off the hook. For days, we received calls from users of the ASP based system called Island Automated Medical Systems (IAMS), a company that had been around for a quite a long time. For these users, IAMS was there yesterday and all seemed fine, then they were gone. They filed bankruptcy, their owners were being prosecuted and all operations were ceased. None of these callers had any advanced warning of impending doom. Why were these callers in a state of shock and panic? Because in a split second, their businesses were gone! Along with IAMS went all their data and their most important business tool. Do you think that the owners were concerned at all about their clients businesses as they were being led out in handcuffs? They weren't. In the end, and even though we tried, there was nothing we could do to help these IAMS users get their data, and many of them folded. It was a sad day.
For a person looking into starting a medical billing business, the ASPs salesmen take advantage of your as-yet lack of knowledge and your willingness to invest less up front to get your business going. But the costs -and risks - eventually become outrageous for a billing operation.
The ASP vendors - not only the company that designs and sells directly, but also resellers - give what seem to be plausible arguments for utilizing them, but for a billing business, the arguments fail:
"Your clients will be able to view their data in real time", they say. OK, good. But, real-time data viewing is easy without going ASP. Almost everyone with a billing business runs at least Windows XP. Windows XP has the "remote desktop connection" features that allow your clients to access their data in real time. Want to see it for yourself? Click on your "start" button on the lower left of your monitor. Highlight "All Programs", highlight "Accessories", and highlight "Communications", now you will see "Remote Desktop Connection". This is the function that allows you, your employees and your clients to access the application in real time. Want to work remotely while out of town, no problem. Want to hire a couple of work -from -home employees, fine. Want your clients to use Front Desk Scheduler or run reports from any internet browser- it works! Why didn't the ASP vendors tell you??? Well, I'll let you make your own guesses on that.
"Free upgrades to the application", they say. OK, good. But, exactly what is free? My friend, let me tell you, in this day and age nothing is free. This just means that they're making their money in a different way. If you're not directly paying for a programming upgrade, you're paying for it in another way. And I'll tell you, if I'm a billing operation and paying a subscription of at least $200 per database per month, and never owning anything. I'd better get fixes and upgrades at no additional cost!! ASP vendors keep their costs down by customizing nothing to fill the special needs of you and your operation. If it's not needed across the board, you're not going to get it. Everyone gets the exact same system, which means they do not have to distribute upgrades for ownership, and they do not have to support different, customized applications. Smart for them, but oh-so inconvenient and tedious for you.
"We back up your data every night", they say. OK, good. But, do they? How do you know? How do you know for sure? Fact is, you don't. You do not know for sure. Again, you- do- not- know- for- sure. What you can do yourself in minutes with a $10.00 flash drive is not worth the risk of utilizing an ASP because they "back up your data" for you. Backing up data is easy!! And doing it yourself gives you the peace of mind of knowing for sure - plus - you have your data, not someone else. And guess what. If you grow to be quite large and want to back up your data twice a day, like many large billing centers do, you can.
"No annual tech support charges", they say. OK, good. Go back to my comments on "nothing is free". This just means that the excessive subscription prices and/or per-transaction prices, and/or per user prices they charge, already cover this cost. In other words, make no bones about it, you ARE paying tech support prices, you're just paying them whether you need it or not.
"We'll talk to your potential clients for you", they say. OK, good. But after the ASP vendor "talks" to your potential client, showing them all the ease-of-use and wonderful functions and features that will save them time and money, what's to keep your potential client from becoming "their" client instead? And if the ASP application is so easy to use, your potential client will ask why you need the vendor to explain and demonstrate it for you. By telling you that they will "speak to your potential client" for you, they're trying to say they'll help you get a client. This "perk" will not help you get a client! But, it just might help you lose one.
"We'll submit your claims for you to the clearinghouse", they say. OK, good. How do you know they did? Can you control how often? What if you have a very large operation and want to submit more than once a day? Or a very small or specialized operation, and want to submit only once a week? You have no control, no control, no control. Also, you are stuck with the clearinghouse of their choice, not yours. AND, if that's not enough, with most ASPs, you get to pay two and three times the normal amount for each transaction you send or receive. This is just one of the "other ways" they get you. And guess who receives and has control of those ever-so-necessary submission reports. Not you. The ASP vendor gets them, then you get them when they get around to sending them to you.
"If a vendor tells you that ASP is not the way to go, it's because they don't offer it", they say. Well, we tell you it's not the way to go, simply because it isn't. Synergy will soon be rolling out PMX3 On Demand for doctor's offices to access via internet. PMX3 On Demand will offer subscription based service, with no upgrade costs or installs, and no additional tech support costs. We'll also backup data every night and submit claims for the subscribers. Will we recommend PMX3 On Demand for billing businesses - no way!
This is the extreme short list, but I believe it's all you need. I could go on and on with more and more reasons why an ASP is totally insufficient for a billing operation, but I'm sure you clearly see the light by now. The truth is Synergy's Practice Manager X3 for billing businesses, soon to be called "PM Md Professional" (Practice Manager Multi-database Professional Edition), is the only software application designed, programmed, and maintained specifically for the needs of a billing center operation - not a doctor's office - and not in a way to just make it easy on us. This highly acclaimed system includes the robust features and across the board functions necessary for billing operations to streamline workflow and save precious time and money. Our Synergy Family of Medical Billing Center clients have a say in programming, always giving input and ideas on how to save a billing center time, trouble, and money. We listen to you, the billing center owner or manager, and customize features and functions to your needs - not everyone's, and not ours. Do you pay a little more up front? Yes, but you own it, you maintain control and you get the products, services and support you need.
Are you the IT manager of a chain of clinics looking into a centralized billing operation? PMMd Pro is for you. Are you the owner of a medical billing business, utilizing a tedious or expensive doctor's office software or ASP? Take a look at PMMd Pro and you will never look back!
Are you a person with an entrepreneurial spirit and desire to have your very own medical billing business? Synergy packages PMMd Pro into a comprehensive business opportunity package which includes software training, an online 7 chapter medical billing instruction course with a "Certified Medical Biller" designation and frame-able certificate at completion. This course teaches you the basics of what you need to know to perform the day to day operations of a medical billing business. One chapter also gives you hands-on instruction, utilizing PMMd Pro to enter practices, providers, patients, charges, payments, and other transactions, directly into a working copy of PMMd Pro, just as you will in your business. You can also choose to include our highly acclaimed Marketing Support and telephone coaching. Synergy's trained professionals will walk you through all phases of setting up your business, naming your business, establishing your business entity, and most importantly, coaching you on marketing efforts to get clients for your business. With Synergy Marketing Support, you don't just get fancy mailing slicks that will be discarded - or old, stale processes that no longer work, you get solid information and instruction on what works now! How do we know what works? We do it everyday.
Synergy Medical Information Systems is dedicated to the success and development of our partners and clients. For over 25 years, we have helped more entrepreneurs achieve a successful, lucrative medical billing business than anyone else! At Synergy, our success is measured by your success, and we take that measurement seriously - ALWAYS.
Looking for a full blown franchise operation of the Synergy System? Click here to read more about the benefits of becoming part of the nationally branded, Synergy Healthcare Resources franchise system.
Return to Top
Billing Business Whitepaper
Medical Billing: It’s a viable and lucrative business opportunity, but don’t get hooked by a “SPG”
A PDF version is also available by clicking here!
So, you are looking into starting your own medical billing business, and everywhere you look SPG’s are lurking! What is a SPG you might ask?
They are the Self-Proclaimed Gurus of medical billing whom are instructing you to “research, research, and research”. Often these are the people who’ve failed at operating their own venture. And what are you supposed to be “researching” anyway? What are you supposed to be looking for? If you’ve never seen or used a medical billing software application, you could explore hundreds, and become overwhelmed, during your “researching”. And more than likely you will end up just as confused – or more so – than when you started. So, why then do they send you away to “research, research, and research?”
It is a common ploy for those trying to sell you something of an inferior value, to operate under the guise of an impartial teacher/instructor – usually with a paid subscription or educational website. The home page proclaims scores of highly successful billers gathering and sharing information of the utmost importance to your future success. They are supposedly, anxiously waiting to help you behind the “send” button of the credit card order of your subscription. Will you really find the Great and Mysterious Oz of Medical Billing behind the website curtain?? Or, will it just be a master salesperson.
Sending you away to “research” is meant to give the appearance of someone who is NOT trying to sell you something. It makes them appear to be teachers rather than salespeople. And we all trust teachers more than salespeople, don’t we?
These masters of self-promotion will also overuse the words “we” and “simply” within their materials. The latter word is usually in bold or italics to entice you to subscribe to their websites or courses, for a price. And then WHAM! You are then instructed on the need, importance of purchasing various items they are selling. “We simply know what you need to know.” “There simply isn’t anything better.”
Another sales tactic of a SPG is to tell you what they are not. “We are not a software vendor.” This is to give a negative, unflattering connotation, to true software vendors. Whenever you are being told what SPGs’ are not, do not assume that what they are not is actually bad. The SPG’s objective is to make you believe he/she is not a salesperson, a vendor, nor developer/producer of the same item(s) they sell.
Please allow me to save you some time, trouble, disappointment, and money with this fact:Most SPGs are simply those that don’t have the right stuff to operate a successful billing business. But, hey, they collected a little information along the way. You know the old saying… “If you can’t do it, teach it.” And they might as well make some money by selling you out-dated information and inferior products while they’re at it.
Most successful billing business owners do not have the time, or inclination, to host websites. If a SPG tells you they currently operate a successful billing business, ask for the name and Google it. Also search the BBB database for that company. If you don’t see it – it doesn’t exist! If they tell you they used to have a successful billing business but sold it, gave it away, or turned it over to their cousin’s sister-in-law’s best friend because they felt the higher calling to teach you how to do it instead…. RUN, don’t walk!
I know people who are incredibly good at self-promotion; “Learn from me (‘us”) because I (“we”) are simply the most knowledgeable and successful in the industry.” The “we” behind that statement is meant to make the SPG’s operation look like a team of gurus ready to assist you, when truly it is the self-promoter, only, running the show. They are great at self-promotion but not much else – except getting your hard-earned money. Just remember when you see a statement on a SPG website such as “15 years medical billing industry experience” it does not necessarily mean current experience. More often than not, it more accurately means, “3 years of initial experience, plus 12 more years selling stuff” for the SPG.
Yes, it is definitely good to research – but you must know exactly what to research. Here is a checklist of items you need to know:
- Make sure the company/organization/course are accredited by the Better Business Bureau. If so, you will see the BBB Accredited logo on their websites and materials.
- Make sure the company has a good standing record with the Better Business Bureau. You can check this on your own at http://welcome.bbb.org/
- Does the company/organization/course promote a singular person as a “guru”? Is there a nice, big photograph of a smiling “professional guru” next to a, so-called, “factual” bio of lifetime successes? Don’t follow a self-proclaimed guru. They’ve most likely failed at what you want to do! They want to sell you a subscription to their website or “learning center”. So while you are in their website, they can give you undisputed information and opinions which will lead you to buy several other items they’re selling! You’re inside, you’re isolated, and you’re being fed one-sided information. TRUE medical billing professionals do not hang out all day on websites teaching you, or disputing the one -sided statements of SPG owners.
- Does the company develop, maintain and support its own software technology? If not, they are simply resellers of someone else’s product(s), and have no control over the functionality, costs, or future of the products they’re selling to you.
- Does the company/organization/course presently do what you want to do? If not, you’re definitely dealing with someone with old, stale information! A company or SPG offering marketing support or coaching cannot teach you what to say to get your foot into the door of a doctor’s office if they’re not presently going out and marketing themselves. Words that would get you a face-to-face with a decision maker 3 years ago are no longer useful today. If the person(s) you’re relying on to assist, support, and teach you are not presently successful at it, then don’t waste your money OR your time. This industry changes rapidly, technology changes rapidly. Do not trust anyone who is not successful at or presently doing what you want to do.
- Do the company/ organization/ course give you many references to call? And don’t use email to contact references! Make phone calls and ask detailed information about how the company assisted in their professional success. Also, don’t settle on calling just one or two references off the top of the list. Call several! Many scams use “singers” rather than true clients as references. Do a Google search on their references. If these references truly have a billing company, they should at least have a phone listing for their organization. If not, don’t count them as a reliable reference.
- Are the SPG’s successful clients easily visible? You should be able to interact with successful clients in a discussion-forum setting. Don’t be fooled by someone that tells you that their successful clients network and congregate in a “private’ area only. Usually there’s no one in there!
- READ EVERYTHING CAREFULLY! If a company or website says “We will help you sign new clients”, look more deeply into that statement. Usually it means they will speak to a prospective client/physician that you’re presenting your services to -in order to orientate them with the software! And charge you for that orientation! And what is to say this “company” will not call the doctor the next day and sell them on buying software from them, or on using their billing services instead! Having the company speak to your prospective client is not going to help you!! The doctor will wonder why someone else has to explain your most important basic tool to him or her, and why you can’t explain it yourself. If you have to have someone else explain your services for you, it can’t be too user-friendly to begin with. When you see “we will help you sign new clients”, you naturally think that company is going to help you get clients. They won’t… and this wording is very highly deceptive!! Do you really want to count on support from a company/organization/course, which purposefully misleads or deceives you? I didn’t think so. CLICK! Time to close that web browser.
Return to Top
Our Latest Sales Packages
Much more than an enticement, the latest sales packages from Synergy Medical Information Systems provide complete medical billing business solutions. Ideal for entrepreneurs of all backgrounds and experiences, our latest sales packages afford the beginning or experienced entrepreneur a complete package to get their medical billing at home business off to a great start!
For additional information on the latest Synergy Medical Information Systems sales packages to help build your medical billing business, contact a Synergy representative today.
Return to Top
Synergy 360
Have you heard? What is all the buzz surrounding Synergy 360? Click here to learn more.
For additional information on Synergy 360 or other Synergy Medical Information Systems offerings, contact a Synergy representative today.
Return to Top
Synergy in the Press
Click on the magazine cover images to read feature articles on Synergy Medical Information Systems
Return to Top
Medical Billing at Home Business, Medical Coding & Medical Transcription:
Which Are Suitable in a Medical Billing at Home Business Scenario?
1. Over-Educating Yourself?
2. Billing, Coding, Transcription: Home-Based Business Feasibility
3. How Much Education is enough?
4. Is Anyone Making Any Money?
1. Over-Educating Yourself?
If you are confused about billing, coding, transcription and beginning a medical billing home business, you are not alone!
I received a phone call last week from a woman who was interested in taking our Medical Billing At Home Course. She sounded fed up, tired and confused. She demanded to know "how long" the course would take, "how much" the course was and finally, "how much more time and money would she need to spend before FINALLY beginning her business!!?" This type of phone call isn't new to me, I'm getting used to getting phone calls from people who have been led to believe that "you can't obtain enough education."
After calming her down a bit, I said to her, "Carol, what is it that you are trying to accomplish? What type of business are you wishing to start?" Carol responded, "A medical billing business from home." "What type of training have you been busy with?” I asked. Carol sighed as she went down the list, "anatomy, coding, terminology... and now I need billing and transcription." "Carol, correct me if I am wrong", I said, "but ... you wish to operate a business from home performing the medical billing functions for a physician's office, correct?" "Yes!” Carol answered. "Then why are you spending your time on anatomy, coding and terminology?” I asked carefully.
Carol went on to explain that after visiting the internet and several bulletin boards, she had determined that she would need training in all these areas in order to begin her Medical Billing At Home Business. Carol is not alone.
Now, don't get me wrong. I'm all for continued education! What I don't believe in is spending your time and money on education that will not support or further your goal.
2. Billing, Coding, Transcription: Home-Based Business Feasibility
If you have been "over-educating" yourself, you don't have a whole lot of time to read email, so I'm going to cut to the chase. Medical Billing At Home IS FEASIBLE. Medical Transcription, as a home-based business, IS FEASIBLE. Medical Coding, as a home business, IS NOT FEASIBLE.
Things to Consider:
- A Medical Coder usually works within the physician's office or hospital and is a paid employee.
- Certification is required for a Medical Coder.
- The Medical Billing Business is not responsible for coding! The coding is done on-sight, at the physician's office. The codes are then supplied to the Medical Billing Business for reporting and reimbursement.
- Certification is not required for a Medical Biller.
- Medical Transcription is a feasible home-based business position, but transcription will not bring in the type of profit that medical billing will.
- You do not need anatomy, terminology, and coding or transcription education to begin a medical billing business! A Medical Billing Business falls more under the category of an "Accounting & Management" business than a "Medical Business."
In my 12 years of operating a very successful medical billing at home business, neither I nor my staff was ever called upon to use anatomy, terminology or coding.
As a "medical biller", your job is to educate on using codes that report the highest level of specificity. Instead of spinning your wheels on "coding education", it is much more beneficial for you to attend seminars regarding coding as it relates to reimbursement! Medicare, Blue Cross Blue Shield and other entities put on these types of seminars all the time. Spend your time on "accounting, management and reimbursement issues".... not anatomy and terminology, these will not prepare you for the operation of a successful Medical Billing At Home Business.
3. Medical Billing At Home Business: How Much Education is enough?
People are different, and this is good. It would be pretty boring if we were all the same. I've always believed that there are 2 types of people when it comes to work (and life in general); Creators and Maintainers. One couldn't exist without the other. Both are extremely important!
The Creators are usually the "shoot from the hip" type people. They have had many jobs, have dived into many opportunities. They have both failures and successes and the failures will not stop them from "diving into the next opportunity." Creators are the "idea-minded-people." They set something in motion then they rely upon the Maintainer to "keep it going."
The Maintainer is the person who likes "a daily schedule... a structure." A Maintainer keeps the creations of the Creator going
With regard to education... A Creator will jump in and access any and all available resources along the way. A Maintainer would never think about "jumping in" until they have accessed all available information and training before-hand. This isn't necessarily a "bad thing"... but it does tend to prevent Maintainers from beginning businesses. The task they create for themselves prior to being able to get their business started is usually very overwhelming and intimidating. This is not to say that a Maintainer cannot begin a business. I see them do it all the time... successfully.
The Creators will like my following statement. The Maintainers will become nervous:
In order to begin a successful medical billing home business, it is more important to know how to access your resources than it is to try and learn every possible aspect about the medical billing home business industry.
If you have been researching the medical billing home business opportunity, you know how much information is out there! You will never need to know all there is to know... and "knowing all there is to know" is virtually impossible as everything keeps changing!
There is a woman who used to frequent several Medical Billing Home Business Bulletin Boards several years back who would constantly pat herself on the back for "gaining 20 years of experience in medical billing before beginning her business." Her advice to everyone: "Don't think about beginning a Medical Billing At Home Business unless you have 20 years experience in the field."
To make a long story short (as if I know how), here I was bringing in $75,000.00 in my second year of owning/operating my medical billing home business (starting without any experience whatsoever), and here is this woman preaching the "must have 20 years experience first"... who didn't even have Client Number One! She just didn't get it.
I got into the medical billing home business industry to be able to raise my small children myself. And, to be able to enjoy the freedom and money I wanted for myself and my family. My plan was to retire by age 45... Not contemplate beginning a business at 45. To each his own… I guess.
So, how much education do you need to begin a medical billing home business? I don't know... I didn't have any. To my advantage, I fully realized the importance of "plugging in"to the support and resources offered by the company I purchased my opportunity package from. I also recognized the importance of spending time with those who were already successfully doing what I wanted to be doing. These were my Medical Billing At Home Business Peers at Synergy.
If you wish to be successful at something, find someone who has already done it... and emulate them!
What I do know for certain is that you do not need to be signing up for all these anatomy, terminology and coding courses in order to begin a Medical Billing At Home Business!
In this business, you simply may not need to know what you need to know until you need to know it!
A Good Example: I ended up specializing in Chiropractic Billing & Reimbursement. Medicare will only reimburse a chiropractor for 1 procedure. Why then would I wish to learn absolutely everything there is to know about Medicare? I wouldn't.
4. Is Anyone Making Any Money?
The simple answer is YES. If I had a nickel for each time I have seen the following post on a bulletin board, I could retire tomorrow:
"I want to start a medical billing home business, but I don't know if this is legitimate. Are there people actually making money in this business?"
In my experience, there are 2 types of bulletin boards out there:
Bulletin Board #1: How Do I Get My Medical Billing At Home Business Going? And, By The Way, Do You Have a Good Recipe for Beef Stroganoff?
You've seen these boards. These boards are basically "the blind leading the blind." Those without clients (and with way too much time on their hands) are running around giving advice to others without clients. It's more like a big "Rah-Rah Fest" than a business support and resource center.
Bulletin Board #2: Actual Medical Billing At Home Businesses (with clients) Interacting with Peers and Support Staff.
I don't mind telling you what I made in my first year in business. If I were selling a "business opportunity"... there would be regulations against me providing any type of "earning statements." I can provide you with an awesome learning experience in the Medical Billing At Home Business Industry, but because this isn't an actual opportunity package, here goes..... I brought in just over $55,000.00 in my first year in business. This is not an isolated situation. I met with other new medical billing home business centers annually that were doing the same thing. By my 4th year in business, I was well into 6 digits.
So, to answer the question again, yes... you can make a very nice income from home operating a medical billing home business. You won't, however, realize this type of income if you are not willing to realize the importance of your investment, your software and your support system. We'll save the details of this topic for a future newsletter!
My advice to you: If you are spending your time on a bulletin board and it doesn't appear that you are surrounding yourself with successful medical billing home business owners... you are wasting your time (these forums are a dime a dozen).
Synergy is a true believer in education! Education will make you stand out from the competition. We believe it is our responsibility to provide you with the all the tools necessary to help you become educated with medical billing, HIPAA, and the practice management software you will be utilizing on a daily basis!
Return to Top
Relinquishing Control of In-House Billing
By Nicholas Restuccia, CPA
Reprint from Physician’s News
A new era has arrived for the (healthcare) practitioner – an era that will require a reduction of expenses to insure survival and profitability into the next decade. In an effort to curb runaway costs, many practitioners have begun to explore the outsourcing of traditional office procedures. That is, hiring service bureaus to perform office procedures that would normally be done by in-house personnel.
How common is outsourcing? In a recent survey of businesses with less than $5 million in sales, 53% of the respondents said their companies now outsourced one or more traditional office procedures.
The most popular areas for outsourcing are payroll, patient billing, administration of employee benefits and maintenance services. Service bureaus can perform these functions more efficiently and economically because they are specialists in these areas. Why Outsource?
Outsourcing each of these office procedures will save money, but the major benefits of outsourcing are clearly found when it is applied to patient billing.
Practitioners fail to realize the extensive cost associated with in-house billing
This can be a very costly form of neglect. Most practitioners have hired one or two clerks to do the billing. They think that doing so insures that the billing is done accurately and efficiently and that the practice retains greater control over the procedures. Let’s examine each of these assumptions.
CONTROL
Many practitioners are reluctant to let a third party assume the responsibility for their billing. They think they will lose control over their receivables. The truth is most practitioners have already lost control. With the bureaucratic intricacies of co-pays, disallowances, charge-backs, deductibles, insurance company holdbacks and duplicate payments, who really has control?
SPEED
Practitioners instinctively fear that using a service bureau will slow down the billing process. They think a lag in billing will create a delay in collections, thereby creating the dreaded cash flow problem. However, this does not have to be the case. Most medical billing services invoice within 24-48 hours of receiving the documents from the practitioner. Therefore, cash flow should not be impaired. In fact, most practitioners report the opposite is true. Gross billings increase and the accounts receivable time is shortened because the billing service is paid on an incentive basis. The higher the gross billings, the more the billing service is paid.
EFFICIENCY
Medical billing services are more familiar with coding than the practitioner’s own billing department. They are cognizant of the latest trends in coding, while relying on office staff to be well versed in the latest coding techniques is unrealistic, naïve and can adversely affect profit.
Service bureaus also have more sophisticated hardware and software than the typical physician’s office because of the volume of transactions they handle. Since computer hardware and software are constantly changing, the in-house staff and the computers must be constantly updated. The practitioner must pay for all the hardware and software updates as well as the expensive “learning curve” while the employees struggle to master the new techniques and programs.
COST
Some practitioners think that using a service bureau is more costly than doing the work in-house – this depends on what you include in the term “cost”. When compared to base payroll costs, the billing service charge is more expensive than in-house billing. But beware. Hidden costs are incurred when in-house people do the work.
The following analysis can help illustrate how savings can be obtained through outsourcing. Assume that a medical practice is billing $1,000,000 per year and needs three billing clerks to handle this level of activity. Service bureaus traditionally charge 5% to 9% of gross billings for this kind of service, so the cost of billing for this practice would range between $50K and $90K. If one billing clerk earns between $22K and $25K yearly salary, three would cost the practice between $66K and $75K. This figure represents the base cost of payroll. Payroll taxes, which include the employer’s share of social security, and federal and state unemployment tax, add approximately ten percent to the base cost. Fringe benefits, which include pension and profit sharing plans, medical insurance, disability insurance, educational reimbursement, sick pay and personal time, can add another ten to thirty percent to payroll cost. In sum, the cost of payroll could jump to a range of $79,200 to $105,000 when these additional charges are added.
OTHER EXPENSES
What about other expenses? In-house billing clerks need space in which to work. Assume the billing clerks occupy an area that is 150 square feet of space. If you are renting space for $15 per square foot, you are paying an additional rent of $2,250 just for those employees. This is just the base cost. Usually there are add-ons for increases in property taxes and maintenance services. Additional costs include utilities and office supplies. Postage is an expense, which is commonly overlooked. Some service bureaus, but not all include this is in their costs. These expenses increase the cost of doing business and reduce the bottom line.
Finally, when you have someone performing an in-house function, that person needs supervision. If you hire an office manager to supervise billing staff – you must still monitor the office manager. This will take away from the time you have to see patients. Outsourcing the billing function allows the practitioner to be more focused on the core business, providing patient care.
Using a service bureau may not be the answer for everyone. A neurosurgeon might have a relatively small number of patients and corresponding caseload. But before you dismiss the idea of outsourcing completely, figure out how much it is costing you to do the billing in-house. You may be in for a surprise.
Nicholas Restuccia, CPA, is a partner at Restuccia & Co.,
a certified public accounting firm in Lynnfield, Mass.
Return to Top
| Some of the links on this page may require Adobe Reader to view them. The Adobe Reader is available for download free of charge, by clicking on the logo. |
 |
Success With Synergy | Why Choose Synergy | Medical Billing FAQ | Personalized Support
Information Request | Synergy Business Packages | Your Synergy Team | Success Stories
Conference & Events Schedule | Synergy News | Online Resources | Forum | Contact Us
Claims Portal | Synergy eShop | Legal Notice | Privacy Statement | Site Map | Home
Practice Manager® X3 | Synergy Healthcare Resources | Synergy Franchise Corp.
Copyright © Synergy Medical Information Systems
Synergy Medical Information Systems
1150 Eastport Drive • Suite C1 • Valparaiso, IN 46383
(800) 652-3500 • Fax: (219) 531-7540 |
