Written by Rene Mallari
Four out of five medical bills have errors, costing both American patients and hospitals tens of billions of dollars annually. This means that 80% of these bills, including oncology billing, have at least a single minor error.
Hospitals encountering frequent mistakes when invoicing their services can lead to complex disputes among patients. If these issues persist or worsen, medical organizations might receive lawsuits from complaining individuals or penalties from government authorities.
One effective way to resolve this challenge is to outsource medical billing. Read on and learn more about outsourcing oncology billing services.
Can Medical Billing Be Outsourced?
You can outsource your medical billing functions to external service providers, medical billing firms, business processing outsourcing (BPO) companies, and other third-party vendors. You can even do this for just a certain period at an agreed rate, depending on the agreement with your selected partner.
Through the years, the number of hospitals and healthcare providers, including oncology practitioners, that adopt this business practice has been on the rise. Outsourcing is an effective way to enhance their medical billing operations, also known as revenue cycle management (RCM).
RCM is a group of transaction processes that an oncology practice uses to manage payments, generate revenue, and process claims. It monitors and documents a cancer patient’s journey, from registration at the oncologist’s office to the last payment settlement for services received.
Transferring RCM processes from your internal billing department to a BPO company means that you allow the latter to handle your finances more efficiently. This non-affiliated entity also monitors ever-changing industry policies, government regulations, and technological advancements that can affect the financial aspect of your practice.
With outsourced medical billing, the external billing team generates superbills and files claims with insurance providers for payment of your patient services. The team can process these claims quickly and accurately. It complies with the insurance carriers’ requirements and billing rules so that you can receive optimal reimbursements in the shortest time possible.
The Benefits of Medical Billing Outsourcing
One of the benefits of medical billing outsourcing is that it saves you the hassle of chasing after the status of your claims. After submitting the claims to the insurer, the external billing provider follows up on them to increase your cash flow.
The billing provider can also help your clinic or medical facility reduce errors in insurance claims. For instance, oncology involves complex, high-cost services reflected in numerous, complicated medical codes.
One minor coding or invoicing error can translate to significant revenue loss. Outsourcing oncology billing services is an excellent way to avoid this potential problem.
Another advantage of outsourced medical billing is the quick setup. A BPO company has experienced billing staff who can quickly perform tasks without the need for lengthy and expensive training.
Moreover, most external service providers use the latest billing software to make your RCM processes more efficient. Practice management software and electronic health records (EHRs) are the typical software applications they use to manage your billing.
What Is Oncology Billing?
Oncology medical billing typically involves generating superbills and filing oncology claims with health insurance providers. This process also includes monitoring and following up on those claims. It ensures that oncologists get paid for the patient services delivered, such as medical procedures, testing, and treatments.
Billers generate claims based on oncology coding provided in advance. Oncology claims are invoices that cancer specialists send to an insurer or a patient for their services. The RCM processes can take up to a couple of months because claims usually travel back and forth between the healthcare provider and the insurance carrier to resolve all issues in the claims.
The Importance of Oncology Billing Guidelines
Learning about healthcare industry guidelines for processing claims and reimbursements is vital to identifying oncology medical billing trends that can influence your medical practice. Oncology billing guidelines are rules or standards with which billers must be familiar if they are to perform their tasks in a proper, timely, and accurate manner.
These guidelines comply with the Health Insurance Portability and Accountability Act (HIPAA), the federal law that regulates the use and disclosure of patient health information. HIPAA also requires healthcare providers, including oncology practitioners, to follow particular sets of codes during the billing process.
Among these vital sets of codes is the Current Procedural Terminology (CPT). These numeric or alphanumeric codes are designated for every patient service that an oncologist delivers. Insurers depend on CPT to compute the amount payable to the medical practitioner’s services.
What You Need to Know About Outsourced Oncology Billing
Since medical coding and billing are complex, outsourced oncology billing is an ideal business strategy to streamline your RCM activities.
Below are some quick facts about it:
- Outsourced oncology billing is when you permit a BPO provider to code and bill your transactions. As soon as you hand over the billing tasks to an external specialist, you can focus on patient care and other areas of immediate concern.
- An external oncology billing team differs from an in-house oncology billing team. The former consists of specialists tasked with managing either the entire or certain parts of your RCM processes, while the latter typically consists of generalists or all-rounders.
- Outsourced oncology billing suits your oncology practice if you are short-staffed to manage your growing number of invoices and claims. You will no longer have to worry about your billing employees leaving or resigning. Your operations will remain continuous under this setup.
- Outsourced oncology billing is not always advisable for small clinics. Many established external billing providers avoid partnering with small clinics for cost and profit reasons.
- Your oncology practice should adopt outsourced oncology billing after weighing the potential costs and revenue it will bring. You should first conduct a cost-benefit study to determine if this is the most feasible option for you.
Do Hospitals Outsource Billing?
An article on Healthcare Finance News says that a growing number of U.S. hospitals are outsourcing their billing. While running their own departments is still standard, more of these medical institutions have started to seek assistance from external service providers for their billing operations.
Healthcare Finance News, a healthcare finance publication based in Portland (ME), cites a Grand View Research report, saying that the size of the global medical billing outsourcing market is expected to grow at a compound annual growth rate (CAGR) of almost 12%, reaching close to $20 billion by 2026.
The Healthcare Finance News article also notes that more hospitals will outsource their billing services because of the mandatory implementation of the complex ICD-10 coding system. EHRs and increasing healthcare costs are other primary reasons for the uptrend.
Front-end services—RCM processes that include patient scheduling and registration, eligibility and authorization, and straight patient collections—led the medical billing outsourcing market in 2018. In that year, hospitals cornered the biggest market share and are projected to keep their lead until 2026.
Hospitals to Continue Outsourcing
Similarly, Mordor Intelligence reports that the hospital outsourced medical billing market is projected to grow in the next five years. It points out that the global pandemic caused a surge in demand for hospital services.
As a result, one of the challenges these healthcare organizations face is how to efficiently handle their growing billing operations. Many hospitals have turned to medical billing outsourcing to immediately address the problem. Other reasons for hospitals to continue outsourcing their billing are the growing need to comply with government regulations and efforts to reduce operating costs.
The Mordor Intelligence report notes that hospitals grab a substantial share of the medical billing outsourcing market. The reason is that most people still prefer hospitals for diagnosis and treatment over other healthcare institutions.
How Does Medical Billing Outsourcing Solve a Hospital’s Common Problems?
Hospital staff, including doctors, surgeons, nurses, administrators, and other medical professionals, have very full plates. They have their own responsibilities, ranging from patient care and resupplying to organizing and delegating numerous employee tasks.
Medical coding and billing are among the most complex and time-consuming activities in running a hospital. Medical billing outsourcing can help ease a hospital’s workload and solve its common problems.
One advantage of medical billing outsourcing is that it simplifies RCM processes and makes financial operations run continuously regardless of office circumstances. This can be a significant time-saver since a major problem hospitals encounter is unexpected staff movement.
Employee resignations and sudden personnel changes can slow down internal billing operations. To complete the billing tasks on time, the backlog is assigned to the remaining team members.
The extra amount of work given to these employees can lead to confusion and recording errors. Mistakes in medical billing can translate to high costs or revenue loss or both.
Outsourcing Means Lower Costs and Higher Revenue for a Hospital
With outsourcing, a hospital can take advantage of the ample supply of experienced and skilled specialists who can ensure that its insurance claims are processed efficiently and accurately.
A BPO provider can conduct regular follow-ups on denied claims. Billing oversights can still occur from time to time but an external billing team guarantees that qualified staff will go after all claims until the matter is fully resolved.
An external service provider can also offer hospital management regular and updated financial reports on its cash flow status. Receiving such highlights and summaries can help the institution determine possible funding challenges and resolutions.
Since outsourcing can streamline the RCM processes, the hospital’s administrative costs and other facility-related expenses will decrease. Total operating costs will also decrease because the hospital no longer needs to manage its own internal billing department. Simplifying billing operations means more efficient payment collections leading to greater revenue collection.
The costs of running an in-house billing team consist of employee salaries and benefits, healthcare insurance, computer hardware and other related equipment purchases and maintenance, training costs, and additional office space.
An external medical billing company is an expert in RCM and the latest medical coding updates and billing rules. It can generate more error-free claims than an internal billing team. This will result in timely payment for healthcare services rendered and a healthier and more sustainable cash flow.
The Bottom Line
Oncology billing, whether performed in a large hospital or a small clinic, is one of the most challenging operations in the healthcare industry. This function is made even more complex by the frequent changes in coding and billing regulations. Adding to this is the issue of in-house personnel changes that can temporarily disrupt the recording and invoicing of patient services.
If you’re running a hospital, a clinic, an oncology practice, or other medical services, outsourcing is an excellent step you can take to help you get unstuck from medical billing activities.