For many ambulatory surgery centers, the decision to employ a team of staff members to manage billing in-house or to partner with a third-party vendor that handles revenue cycle workings is a difficult decision.
Both outsourced and in-house billing services have benefits and drawbacks, depending on the facility. Kevin McDonald, senior vice president for SourceMedical, has worked extensively with ASCs to help them determine the best arrangement for a center's particular situation.
Here Mr. McDonald details six things ASCs should consider before determining whether maintaining an in-house billing department or outsourcing makes the most sense.
1. Staffing control. A major benefit associated with maintaining an in-house billing department is greater control over staff. ASCs can select and hire individuals whose qualifications they are most comfortable with and have access to those coders every day in the center.
"You have control over employee hiring," Mr. McDonald says. "If you have questions, you can just walk down the hall."
2. Division of resources. While ASCs enjoy the control associated with an in-house billing department, it often comes at a cost as ASCs often must share resources. For example, a biller with a nursing degree can be pulled from his or her clinical work to fulfill a billing request. Furthermore, cash flow can suffer when people take vacations or quit before being replaced, Mr. McDonald says.
With in-house billing, surgery center administrators must also take on additional responsibilities including finding and training expert collection and coding staff.
3. The cost breakdown. There are ongoing costs associated with maintaining in-house billing such as staff salaries, benefits and training. It is important that ASCs have the caseload to support these costs when maintaining billing processes in-house.
According to Mr. McDonald, outsourced billing services offer many benefits that lead to cost savings including increased collections from more thoroughly-trained and focused coders. Additional cost savings can be achieved through the reallocation of space initially set aside for in-house billing, space that can be used as an additional procedure room once billing is outsourced, he says.
4. ICD-10 assistance. As the ICD-10 code set transition looms, more surgery center owners and revenue cycle managers are looking for billing companies to provide coding services and relieve the ASC of the burden.
"We anticipate a 10 to 20 percent increase in manpower to initially handle the changes in ICD-10," Mr. McDonald says. "That will decrease over time, but a lot of facilities aren't willing to deal with employee training and changes on the billing side. They would prefer to outsource and not deal with it."
If centers are looking to partner with billing and coding vendors, he recommends locking into a reasonable rate now, before vendors increase their rates.
"The industry will probably see an increase in what third-party vendors charge for coding services once they realize their own cost for ICD-10," he says.
5. Misconceptions. As ASC owners consider their billing options, they can be aware of the many misconceptions that make it difficult to decide which option is best. For example, Mr. McDonald has heard many ASC owners express concern that outsourced billing will lead to a loss of control over revenue cycle happenings. This is a misconception, he says, because companies that tap into an ASC's existing software system will leave the ASC with the ability to run all of the same reports as with in-house billers.
"When a center has software in the office or on a cloud system, the vendor taps into the same software to do the billing," he says. "You are using the same instance of the software so when the outsourced billing person key strokes from his or her end, the ASC staff members can see it on their end."
Another misconception is that outsourced billing means personnel overseas or outside of the country will be handling an ASC's finances. Look for a company that has operations in this country, he says.
6. Service selection. For ASC owners that determine outsourcing is the best option, there are several factors that should be taken into consideration in regard to vendor selection. Vendors that specialize in surgery center billing — rather than hospital billing — will be more knowledgeable to an ASC's needs and requirements. Physician office billing requires an entirely different skill set.
Mr. McDonald also recommends looking for a company that will use the software currently in place at a facility.
"Look for a company that is utilizing the same software in use at your facility, otherwise you run the risk of loss of control over what is happening with your billing, loss of reporting at your fingertips and a loss of case costing coming out of your billing system," he says.
The decision to outsource the billing process or to bring it in-house is an important choice as it can have a significant financial impact on a facility, says Mr. McDonald. Careful consideration and a clear understanding of what ASC owners hope to accomplish is necessary before moving forward.
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