Lately, there has been a lot of speculation amongst medical billing company owners about what the future of the medical billing industry will be. We have been working in this industry since 1994 and have seen significant changes over the years. The future of the medical billing industry is still bright and here is why.
Increased Denials
Remember the days when you would submit a batch of claims and 98% would get paid on the first submission? That is not the case these days. Medical Billing requires more resources than ever to get claims paid. Providers need more and more employees to get this work done. A billing company can hire affordable labor offshore to assist with the time and labor-intensive process of calling insurance companies to get claims paid. If you are using an exclusively American work-force and paying them the industry average wage of $15-$20 an hour, it is difficult to be profitable. Hold times with insurance companies can be forty-five minutes or more depending on the carrier. Once you finally get a representative on the phone, they may only let you check the status of three claims. At this point, you have already lost a lot of time and money. If you use an offshore vendor with an average hourly wage of $7-$8 an hour it is much easier to be profitable. There is more talent overseas than ever before and if billing companies leverage this resource they can continue to see great results as well as profits.
Competition From Competitors
Companies like Athena have the ability to undercut the market due to their offshore team, software, and efficiencies. They are targeting physicians and healthcare groups offering rates as low as 2-3% of collections. This is intimidating to many small medical billing companies. Physicians cannot compare the service and reimbursement rates of a company like Athena or billing done by software companies like E-Clinical Works, Harris CareTracker, AdvancedMD, and others with small billing companies. Many of these companies are using offshore teams exclusively. In order for medical billing to be successful, you need an onshore team and an offshore team that work closely together.
Many offshore teams will tell you that they can do everything. Having worked with offshore teams since 2005, we have learned that they cannot do everything. There are high-level appeals, records that need to be mailed, patient calls to answer, and client communication to deal with that offshore teams simply cannot take on successfully. India was the first country outside the U.S. to get into the US medical billing industry. This has given them an advantage and a massive talent pool in comparison to other countries, yet even India can’t do the full RCM cycle.
Medical Billing is not a commodity, it is a service business. Physicians like personal service and often prioritize hiring a local company that understands their patient demographic, insurance mix, credentialing, fee schedules, and reimbursement rates, as well as those of other providers in similar specialties. This is all an essential part of the value proposition of going with a local company versus a national company. Working with an offshore team allows your employees more time to spend on the client relationships and nuances increasing your client retention.
Politics, and a Single Payer System
Any discussion of the future of medical billing would be incomplete without mention of the ever-present spectre of a single-payer system. The industry will change significantly if a candidate is elected and decides to transition to a single-payer system. This being said, the likelihood of such an abrupt transition is slim to none. Even if the candidate chosen prefers a single-payer system, there will be a lot of work to be done in such a transition. A more likely alternative would be an expansion of the present Medicare and Medicaid systems, as well as building upon the Affordable Care Act. Even if the transition is to a single-payer, there will always be the option to have private insurance and there will still be a need to bill private insurance. Still, a single-payer system will reduce the immense burden of medical billing. Within this scenario there will still be a need for billing companies, we will simply need to pivot and adapt as we always have.