How to reduce the cost of medical billing could be as simple as using Medical billing software.
A growing part of the healthcare industry’s automated connectivity digitizes this process and reduces the cost and time associated with handling phone and paper-based claims.
Before and after a patient receives treatment, healthcare providers must submit and follow up on insurance claims with the patient’s health insurance company.
The total cost depends on enterprise size and whether or not you want on-site servers. Web-based or “cloud” software runs on off-site servers and can cost as little as $26 to $110 per month.
In 2019 medical billing software can cost from $30 – $95/month (hosted) – $8,000 (on-site equipment).
Many vendors also charge a percentage of claims processed using their software. Other factors include the number of physicians using the software and how many patients seen per day.
Medical billing is what gets you paid. For independent medical practices, deciding between using in-house billing software and outsourcing to a third-party billing service can be a tough choice. Some physicians think outsourcing is a no brainer. It just makes sense to let the experts handle the claims. Other physicians like the sense of control that in-house billing gives them. For most physicians, though, it all boils down to cost.
So, when it comes to the cost of medical billing, could you save money?
This hypothetical cost analysis is an excellent example to consider when making a decision. Let us assume that a three-provider practice handles an average of 80 claims per day. This can work out to 20,000 applications annually. At an average cost of $125 per claim, this is $2,500,000 in gross billing.
When you factor in employee salaries $109,200
Software costs $7,200( $200 per physician per month)
Hardware costs $500 (printer and workstation)
Training costs $5,000 $1,000
Direct claim processing costs $3,600($100 per physician per month clearinghouse fee) $122,500(7% of collections)
Percentage of gross billing collected 60% 70%
Collections $1,500,000(60% of $2,500,000)
$1,750,000(70% of $2,500,000)
Total collection costs $125,500 $124,000
Net Collections $1,374,500 $1,626,000
This questionable practice can save hundreds of thousands of dollars by using a third-party billing service. The above data does not include the ancillary expenses of in-house billing such as office supplies, office space, the extra human resources needed for patient billing support, and other miscellaneous costs. It also does not take into account the hassle that in-house billing can entail. The above example does include a modest 10% increment in the percentage of gross invoice collected by outsourcing, which any excellent third-party billing service should be easily able to achieve.
An extra couple hundred thousand in the bank is hard to ignore.
If you are still unsure whether outsourcing makes sense for your practice, consider yourself an excellent candidate to outsource if:
- Your collection percentage is subpar when compared to the average for your specialty
- Your billing process is not efficient and collection times are high
- Your collections have not increased with increasing productivity and more top gross billing
- You have trouble finding and keeping experienced billers and coders.
- You’re starting a new practice (and looking at considerable upfront costs)
- You want to focus on patient care and leave the business end of things to the experts
- You’re not technology savvy, and neither is your staff
- You don’t have an in-house IT person to handle hardware and software problems and upgrades
Each practice is different, and it’s impossible to state that one formula will work best for everyone unequivocally. The results may surprise you. You could be spending too much on collections. Worse still, you could be leaving revenue uncollected.
How To Reduce The Cost of Medical Billing
IoSoft Inc. provides proprietary software for medical billing, healthcare claims adjudication, electronic payments between healthcare payers and providers.
IoSoft payment systems provide unique payment technologies services and software that can be integrated with legacy or other existing systems of healthcare payers, such as insurance companies, hospitals, and Third Party Administrators.
IoSoft Inc. also has several other platform developments such as automotive warranty payments.
Since formation, IoSoft has been a third-party developer of software and provides IT support for the platforms developed.
IoSoft Inc. was formed in 1998 by, Vincent Valentine, and acquired by RJD Green Inc. on April 18, 2016.