Avoid These Mistakes by Outsourcing Your Medical Billing

outsourced medical bills


A healthy revenue cycle gives you the financial base to improve your facility and serve your patients better. Outsourcing medical bills give you an accurate and efficient billing process to enhance your financial status. But that will not happen if you don’t employ the right strategies and avoid potential pitfalls that can come with outsourcing.

So in this article, we discuss common mistakes hospitals commit when outsourcing medical bills and the best practices you need to take to avoid them.

Mistakes to Avoid When Outsourcing Medical Bills 

A good amount of prevention is worth the effort to protect your hospital when outsourcing medical bills or other outsourcing initiatives. Adding critical contractual terms and clauses that support the issue-management process in your service agreements helps build a positive working relationship and allows your hospital to avoid potential mishaps.

With that in mind, here are 5 mistakes you need to avoid at all times when outsourcing medical bills.

1. Communication Difficulties 

Minor issues in outsourcing medical bills can quickly escalate into bigger problems when partnerships lack proper communication and processes to expedite discussion between the two parties. Insufficient details about expected outcomes and results and a lack of regular communication (e.g., meetings and reports) lead to disagreements and confusion. 

Reports must be based on facts and agreed-upon benchmarks and performance indicators. Set routine meetings between your outsourcing partner, on-site vendor personnel, and direct hospital reports to ensure this is understood and maintain clarity.

Include a timeline for rectification and escalation of processes to a senior chain. In conjunction with third-party account managers and supervisors, you might want to build a centralized committee with representatives from your team and the outsourced department. This is to ensure that both parties fulfill their communication obligations.

Discover: 5 Tips For Using Healthcare BPO Services

2. Ineffective Governance and Management 

Failing to assign a primary vendor liaison who will oversee and manage the process of outsourcing medical bills daily and be responsible to hospital patients is another big mistake. Your hospital needs assurance that the outsourcing firm fully comprehends the external team’s responsibilities, budget, and agreement terms. Agreements without a proper feedback loop that includes the hospital administration and those that detail the daily review of operations and reports prevent transparency on the outsourced team’s service and can easily lead to misunderstandings and costly mistakes. 

You patients may not have an entirely positive experience if you are not aware of whether or not the outsourced team is responsive to the patient’s concerns or if they are achieving good results and satisfying quality objectives.

As mentioned earlier, the agreement must specify that the outsourced team is to frequently meet with the hospital and centralized oversight committee to guarantee proper management of the arrangement. 

Additionally, your partner firm must ensure consistency and quality with sufficient hospital input to prevent unmet expectations in the overall outsourcing agreement. 

Of course, mistakes will be made, and protocols will not always be followed. So make sure your agreement includes a process for correcting these errors and specifies who will take responsibility for certain types of failures. 

Learn more: How Medical BPO Services Can Assist Customer Service Overall

3. Insufficient Hospital Input When Terminating or Replacing Personnel 

A common mistake in outsourcing medical bills is the lack of hospital input in removing or replacing an outsourced team member. The success of outsourcing medical bills depends on the team managing the process. 

Failed partnerships are often the result of a lack of proper and consistent management by the outsourcing firm. Hospital dissatisfaction is more likely to occur if the terms require only the service provider to pick a manager and give a unilateral right for the provider to choose the replacement of the hospital asks for removal or replacement of the said individual.

 A successful outsourcing arrangement facilitates continued dialogue and interest by all parties involved to ensure consistency in management. Should the relationship fail to perform well or replace or remove certain outsourced people becomes necessary, hospital participation in the substitution should be required. 

Service providers that do not consider the preference of the hiring company fail to show their commitment to a long-term partnership with your hospital. 

Further reading: 5 Ways Medical Billing Outsourcing Can Improve Your Hospital

4. Unilateral Approach to Problem Resolution

Although lopsidedly terminating a partnership or imposing monetary penalties for low-quality performance might be effective remedies in certain situations, they are not the only approach to take when solving problems with your outsourcing partner. No matter whether the nature of the problem is performance-related or contractual, all Personnel from both parties needs to be engaged in finding the root cause of the problem as it arises and determines a joint resolution to it. 

In your agreement, you can include a statement requiring the vendor to be accountable for their commitments and accept their share of responsibility should their performance lead to poor results. Both you and your outsourced team should be required to share all necessary information concerning your and the firm’s obligations. 

Additionally, establish a notification process in conjunction with the standard reporting process that will let you know as soon as possible if the service provider will miss a certain benchmark or need to make a personnel change.

5. Failure to Communicate Expectations and What Value Equates with Success 

Despite achieving performance indicators and quality assurance, dissatisfaction may arise when the hospital and the service provider disagree on what values determine success for the duration of the partnership. You can avoid much of this by being direct and clearly delimiting your expectations about process improvement in conjunction with cost-saving and achieving benchmarks. 

When drafting your agreement terms, include a section requiring the vendor to provide additional cost-saving strategies and better service options yearly. You might also want to offer the service provider bonuses or rewards of some type when exceptional results are gained. Conversely, you can impose financial penalties for poor outcomes. 

It is imperative that both you and your outsourced team act in a way that shows a clear understanding of what equates to success — for your hospital, it could be cost-saving and improving quality; for the service provider, it could be making a fair profit in exchange for providing high-quality results.

The Bottom Line

As the number of outsourcing companies increases, hospitals are under greater pressure to select an outsourcing partner that truly understands their culture, value, and workflows. Here are some of the best practices you can apply when choosing a medical BPO for outsourcing medical bills. 

Address the Pain and Cost of Compliance 

Hospitals in the US spend a total of $39B on managing compliance. This equates to $7.6M for a typical hospital with 161 beds, or $1,200 per admitted patient. Finding ways to limit the administrative burden on your compliance-related activities is perhaps one of the most beneficial outsourcing strategies you can implement. 

You can achieve higher savings by entrusting your service provider with chunks of your administrative-related work. It can also free up some time from your clinicians. 

The key here is to select a partner adept with government guidelines and regulations. If possible, choose one already doing this kind of service for other hospitals. 

Select a Partner That Values Patients as Much as You Do 

For many hospitals, improving customer experience is one of the top priorities. Positive patient experience indeed contributes to a hospital’s profitability, especially now that the majority of consumers base decisions on experience with the business. 

For that reason, you need to work with a medical BPO that values your patients at the same level you do. That way, you can be sure they internalize your patient care strategies and initiatives as much as your in-house employees. 

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