Subjects - Business

There are many reasons healthcare practices might outsource their billing to a professional medical billing service; confusing insurance requirements, staffing problems and just keeping up with industry changes are a few examples. In the end though, the reasons most medical billing companies hear about come down to the two driving principles of any business – Time and Money. This article discusses how medical billing services are able to creat

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

e significant savings in time and money for healthcare providers.

Medical Billing Services Save Training and Research Time - Some readers might take the short view and think medical billing companies just enter data into a computer and send it off to a clearinghouse. In reality medical billing is a detailed process requiring specialized skills and in-depth knowledge of medical practice management, insurance industry practices, and the

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

regulatory framework around state and federal laws. Professional medical billing companies invest countless hours in training and research to keep abreast of current codes, submission requirements, industry trends and the needs of their clients.

Significant expenditures are also made to ensure medical billing companies are up to date on the latest software. In a constantly changing industry, software vendors are always finding new and better

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ways of supporting practice needs. It’s not practicable for small or medium sized practices to dedicate the time necessary to stay on top of the latest innovations.

These investments of time by professional medical billing services are often not considered by providers, but they eliminate endless hours otherwise spent in seminars, meetings with vendors, or on the phone with clearinghouses and carriers. This time savings creates a valuable co

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

mmodity for a practice seeking the edge necessary to keep up with a rigorous patient schedule.

Medical Billing Services Save Operational Time -Medical billing services are able to save operational time by leveraging the economy of scale and the efficiency of task specialization.

Professional medical billing companies, by their very nature, create an economy of scale in maintaining a team of medical billing professionals to provide se

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

rvices across several practices. This structure creates a well trained pool of resources to manage each practice’s needs rather than just one individual overseeing all billing functions. The team approach also removes interruptions to revenue flow that result from vacations, unexpected sick time and staff turnover.

Task specialization among teams further heightens the efficiency of medical billing companies. Through task specialization, a tea

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

m of billers can accentuates individual skills and reduces distractions of other activities.

Consider a provider who sees an average of 30 patients per day, or a total of 150 encounters per week. The time required to generate and submit 150 patient claims and follow up with insurance carriers with a high lever of accuracy can take up most of the time of an in-house biller. But this is just the beginning. That same individual will also need to

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

follow up on denied or partially paid claims, researching why and resubmitting for further review. Patient invoices require additional time- printing, stuffing and mailing- as well as posting payments, running reports and providing detailed analysis on the current state of the practice; all this just to meet the standard offering of professional medical billing companies.

Through task specialization, medical billing companies might offer eac

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

h of its clients several billers submitting claims and reviewing insurance payments with the highest level of accuracy. At the same time, the service might have other individuals or groups dedicated to managing patient invoices and questions across several practices with increased efficiency. This approach maximizes the time available for each activity by specialists with a greater knowledge of their roles, and, again, guarantees minimal (if a

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ny) interruption during employee leave and staff changes.

Medical Billing Services Save Money -Hiring and training new staff, employee benefits, vacation/sick leave, and staff turnover are just a few factors increasing the costs of managing an efficient in-house billing program. Added to the operational overhead of day to day billing, software/hardware maintenance, clearinghouse fees, postage, and so on, the list of expenditures for p

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

actices is endless.

Good medical billing companies will design their services around covering all of these costs and immediately do away with the problems they create. To clearly demonstrate how medical billing services can save practices money, let’s compare the core costs associated with in-house medical billing against working with a professional medical billing service.

Cost of In-House Billing: Our comparison begins with a typic

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

al practice with one or two providers. Let’s assume this practice has a dedicated, in-house biller receiving an annual salary of $30,000, or about $14.50 per hour. The chart below outlines the additional costs of having a full time employee in the office to handle all aspects of medical billing.

Base Pay --------------------------$30,000
Medicare and Social Security ---------$2295
401K -------------------------

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

-------$1080

Disability -----------------------------$720

Healthcare --------------------------$5220

Time off -----------------------------$3270

Total labor for 1 in-house biller ------$42,585

Next, we’ll need to consider materials and fees. An average practice will probably upgrade computers and software every 3 years at a cost of about $6,000. Spread out over those three years, we’ll assu

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

me an average annual software/hardware expenditure of $2000. Since our practice will send out its own patient statements, we’ll need about $150 per month for postage, paper and envelopes, an annual cost of $1800. Clearinghouse fees for electronic claims will come to about $60 a month, or around $720 annually. For the sake of simplicity, we’ll forget for the moment that our biller will need a climate controlled workspace, lights, general office

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

supplies and a desk.

Here’s what our list of software/hardware, materials and fees looks like:

Software/Hardware -----------------$2000
Materials ---------------------------$1800
Clearinghouse Fees ------------------$720
Total ------------------------------$4520

Adding the two totals above (labor + materials & fees), the annual cost of medical billing services performed in-house by the p

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ractice comes to $47,105 per year. Of course this number might not mean much until we put it in perspective against teaming with a professional medical billing service. As we move forward, keep in mind this conservative estimate does not factor in those other costs mentioned above that are often hidden - ongoing training, unexpected leave and sudden staff changes.

Cost of Professional Medical Billing Services: To evaluate the c

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ost of working with medical billing services, we’ll assume our practice has contracted with a medical billing company for full service billing. This includes all of those activities that would otherwise have been performed by the in-house staff above; claim generation/submission, insurance follow up, patient invoicing and support, detailed reporting, expert practice analysis, etc. We’ll also assume the practice has negotiated a rate of 8% of c

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ollections with its professional medical billing service.

Note: Calculating costs for medical billing services will vary slightly depending on the fee structure but will usually be based on either a percentage of collections or a fixed fee per claim. For more information on fee structures, see Percentage vs. Flat Fee Pricing by Medical Billing Services.

Assuming our provider visits 30 patients per day, 50 weeks out of the year, we’ll have 75

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

00 patient encounters per year. If each encounter results in an average reimbursement of $60, our receivables come to a little over $450,000 per year. At a rate of 8%, the annual cost for the professional service to manage all aspects of medical billing services for the practice would be $31,500. In comparison with in-house services that’s a savings of $15,600 per year!

Summary In evaluating the benefits of outsourcing

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

to a professional medical billing company practices should consider the overall savings in time and money, beyond just minimizing the hassles. Medical billing companies provide knowledge, training, continuity of operations and a network of support leveraging task specialization and the economy of scale. Medical billing companies are able to eliminate dependency on one or two costly staff members to maintain revenue flow for the entire practice

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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In recent years, more and more companies are deciding to engage the services of call centers that can provide them with answering services. This is because companies are now realizing that doing so can provide them with a number of benefits that can help them increase sales and expand their businesses. However, there are companies who are looking for something more with regard to the answering service that they get, including things that can give them an advantage over other companies that also use call centers. One of these includes getting multi-lingual answering services, which can give businesses access to a wider market, not only in the United States but also in the international market. Given this, call centers are now making it a point to hire multi-lingual call center agents to help them provide this kind of service to their clients.

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