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Practice Management Alert

Reader Questions:

Know What To Ask When Looking

Published on Mon Sep 01, 2003

Question: My practice is thinking about outsourcing our billing. What should I look for in a billing company?
  
Montana Subscriber

Answer: If you decide to have an outside company handle your practice's billing, it's essential that you find one you can trust and that will meet your needs. To help ensure you make the right decision, there are many questions to ask, notes consultant David Fish with D&B Medical Management Solutions, Inc. in Columbia, MD.
 
When considering a particular billing company, the first thing you should find out is how long it's been in business. Generally, the safest bet is to look for a company with a track record that goes back at least three years, Fish says. Also, take the size of the business into account, and consider how it coincides with your needs. A very large company will usually be reliable (that is, you can probably rest assured it won't go under, leaving you high and dry); on the other hand, they usually don't offer much in the way of personal service and there's often high turnover, which means you could wind up being passed around the organization, Fish points out.
 
You also want to find out how the company will charge you for its services. Most billing companies either charge based on how much they bill out for you or based on a percentage of the receivables collected. The latter is preferable for the medical practice, because the company gets paid based on how much reimbursement it secures for your practice. That arrangement gives the company more incentive to work hard on your behalf, Fish explains. Also, find out if extra costs (such as postage) are included in the company's fee.
 
Other essential questions to ask a prospective billing company are as follows, according to Fish:

 

  • Does the company submit secondary claims? You'd probably do best to avoid companies that don't, Fish warns.
     
  • How is accounts receivable handled? Some companies charge extra for working old claims, Fish says. Stay away from these guys.
     
  • How does the company bill patients? Find out how many letters the company sends to patients, when they send the account to collections, etc.
     
  • Who handles telephone inquiries about claims? This might seem like a silly question to ask, but many billing companies won't get on the phone to track down claims or resolve payment issues, Fish says. You want to find a company that will take care of this chore for you.
     
  • Will the company be HIPAA compliant when October rolls around? Also, keep in mind that the billing company you choose will be a business associate for HIPAA purposes, so you'll need a BA agreement in place.
     
  • What kind of software does the company use? Tip: Ask for a sample of a monthly report.
     
  • Does the company offer any bonus services, such as credentialing or coding updates?
     
  • How does the company's filing system work? Find out how quickly billers can find specific information, Fish says. Don't put yourself in unsteady hands.
     
  • Is the company very familiar with your specialty, or is their knowledge more general?
     
    Another strategy for success is to make a site visit to see for yourself how business is conducted at a prospective billing company, Fish suggests. Also, ask for references - and check them. The most important step you can take to secure your finances - whether you're using an outside billing company or not -is to set up a lock box for your practice, he urges. This is a bank account to which all payments are sent, and it helps protect your practice in two ways, Fish explains. First, it keeps your money out of individuals' hands, thereby making embezzlement almost impossible. Secondly, it secures consistent cash flow

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