A medical billing company makes money by transforming patient services into bills that patients can pay. These bills are then sent to insurance companies for reimbursement.
Most medical practices and hospitals outsource their medical billing needs to a medical billing company. The goal is to get more of the revenue they collect from medical claims paid on time and in full.
Fee-for-service
Fee-for-service is a system in which healthcare professionals get paid based on how many services they perform. This approach has long been criticized for its lack of accountability for outcomes and underlying costs.
The result is that some patients get too much care, some need to get more, and others need the proper care. In addition, the problems created by the fee-for-service payment model are exacerbated because it is not tied to ensuring better patient outcomes.
Fortunately, policy shifts are underway to encourage and protect the adoption of value-based reimbursement. This can benefit practices and providers that are ready to transition. The ACA and CMS have committed to significantly moving the country toward value-based care by 2030, and more private payers are adopting this reimbursement model.
Contracts
Contracts are legal agreement that allows two parties to make promises to each other. They vary in scope and purpose, but each has a specific set of requirements that must be met to ensure that the contract terms are valid.
The primary purpose of a contract is to provide an agreed-upon way for two entities to work together. However, it can also provide a straightforward way for one party to change its plans when it sees that they aren’t working out.
Medical billing companies are often paid a percentage of the revenue that their clients collect each month. This fee is typically determined by the size and scope of a practice’s business and location.
Outsourcing your medical billing process can be an efficient and cost-effective way to reduce overhead expenses in your medical practice. This includes infrastructure installation costs, onboarding costs, payroll, and benefits, to name a few. In addition, the money you save will allow you to grow your medical practice and improve patient care.
Reimbursement
Reimbursements are payments from an organization or a company that reimburses you for a past purchase or transaction. These can include business expenses like travel or food, reimbursements for medical bills from an insurance company, and tax refunds from the government in cases where you’ve overpaid taxes.
A medical billing company makes money through the reimbursements they get for your billed charges. They analyze your claims, resubmit them in the correct format, and scrub them for errors before sending them to payers. This process results in faster claim processing, fewer rejections, and higher reimbursements.
Healthcare practices, hospitals, clinics, and private practices of all sizes, stages, and specialties benefit from outsourcing their medical billing. By allowing a dedicated outsourced partner to handle all or a portion of the back-end billing, practices can focus on providing excellent patient care while alleviating the heavy workloads that arise from the medical billing company.
Revenue cycle management
Revenue cycle management, or RCM, is the financial process facilities use to identify, manage, and collect patient service revenue. It is essential to ensure healthcare organizations stay in business and continue to treat patients.
RCM must be prioritized and managed optimally to maximize revenue and minimize errors. This requires optimizing front-end tasks, such as verifying insurance eligibility, submitting claims for services, and collecting payments.
A sound system for managing patient data can also help keep medical billing processes organized and streamline operations. The best systems take data captured by clinicians and use it to drive financial outcomes, including preventing redundant data entry, capturing charges accurately, coordinating authorization requirements, and predicting financial obligations.
The medical billing industry is lucrative, and many companies focus on it. They offer various services, from charge entry and coding to claim submission.
