It doesn’t matter if you have a small practice or if you manage a large hospital; managing insurance claims is difficult for all. Not just the claims, healthcare providers now face more challenges in the entire revenue cycle management. Denial rates, administrative costs, and obviously, employee salaries are all increasing. When compounded over time, these issues threaten the financial stability of the practice.
So, what’s the solution to all this mess? The answer isn’t hiring more people or investing more in project management or tools. The solution is simple! Just outsource your claims management and billing operations to specialized companies.
But you might ask here, how will outsourcing help? Wouldn’t it just add more to the expenses? Well, No! Getting help from these companies can benefit you more than you can imagine. And that’s what we are going to discuss in this blog. So, let’s start.
The current situation of the billing industry is not good. Instead of improvements via technology, 77% of healthcare providers report that claim denials are increasing. Just a few years ago, only 42% of providers claimed this. But what is causing this crisis? Well, to be honest, there is no single answer to this. However, most surveys show a common problem, i.e., missing/inaccurate information and coding errors.
This seemingly simple issue cascades into complex problems that drain resources, delay payments, and ultimately compromise patient care quality. On top of this, regulatory compliance and highly volatile payer policies make medical billing and coding a nightmare for healthcare providers.
The following are some industry stats:
● 20% of claims are initially denied
● 38% see at least 1 in 10 claims denied
● 80% of medical bills contain errors
● 67% report longer reimbursement times
● $260 billion annual burden from denied claims
● 54.3% of denials are eventually overturned
● 60% of denied claims are never resubmitted
● $125 billion in improper payments annually
The statistics don’t tell a good story. The issues aren’t just limited to claim denias, rather the providers face challenges of different types. The crisis affects every aspect of practice operations.
To give you a better idea, let’s discuss some of them.
While the direct financial impact of denied claims is obvious, the hidden costs often exceed the immediate revenue loss. Each denied claim triggers a complex sequence of activities that consume valuable resources like:
● Administrative Time
● Opportunity Cost
● Cash Flow
● Staff Morale and Efficiency
● Patient Experience
Modern healthcare billing requires precise coordination of patient demographics, insurance information, clinical documentation, and coding. Even minor discrepancies, such as a missing middle initial or incorrect date of birth, can trigger denials.
The transition to ICD-10 brought unprecedented complexity to medical coding, with over 69,000 possible diagnosis codes. Proper coding requires not only technical knowledge but also clinical understanding. Plus, a lot of codes require pre-authorization from the insurance companies. It is simply not possible or viable for healthcare providers, and especially small practices, to do all of this in-house. Sooner or later, they are bound to fail.
Effective billing companies employ specialists rather than generalists, ensuring that each aspect of your revenue cycle receives expert attention. These professionals undergo continuous training on evolving payer policies, coding requirements, and compliance regulations that would be cost-prohibitive for individual practices to maintain in-house.
Success Metrics from Leading Providers:
● 97-99% first-pass claim acceptance rates
● 95%+ medical coding accuracy
● Sub-30-day average collection periods
● 20%+ revenue increase for partnering practices
Every medical specialty is different, not just for physicians but also for billers and coders. Their codes are different, their billing guidelines are different, and even their documentation requirements are different.
Practices can not deal with these types of issues alone. However, medical billing companies in the USA have developed specialized workflows that address the specific requirements of various healthcare disciplines. So, you don’t have to struggle alone.
For instance, if you have a multi-speciality practice, including radiology, cardiology, and podiatry, you can not have a billing team that is an expert in all disciplines. Even if you manage to get such a team, it would be a financial disaster.
On the other hand, billing companies have entire dedicated teams for each specialty. They can achieve results that your in-house team can’t. They can provide expert radiology billing services as well as cardiology and podiatry.
The evidence is overwhelming for both the challenges and how good it is to outsource the billing operations. Billing companies deliver superior claim success rates through specialized expertise, advanced technology, and dedicated focus on revenue cycle optimization.
So, don’t try to do everything yourself; outsource your operations to reduce your admin tasks. This way, you will have an easier time and can focus on patient care.
