How to Choose a Medical Billing Company for Small Practice

Learn how to choose a medical billing company for small practice — clean claim rates, pricing, HIPAA compliance & more. Get a free audit today. If you are a small practice owner, you are well aware that getting your billing services right is crucial for the success of your business. The billing process is something that will always be there regardless of any circumstances, and it is necessary for your practice’s survival, although most patients will never see it. However, for many small medical practice owners, the point when they realize that things have gone too far, and they need to get outside assistance comes sooner than expected.

The billing department can be overwhelming, especially when the front office is already swamped with a sufficient amount of claims, some of which denied in the process. Perhaps you feel that you are spending too much time tending to outside providers while neglecting the core of your practice, which is your patients.

Rest assured, that as soon as you begin your search for medical billing companies for small practices, you can quickly realize that most services are willing to do anything to convince you that they are the best choice out there.

However, what criteria should you consider while choosing a billing partner that will benefit your practice?

Everything You Should Know Before Outsourcing Medical Billing

Before you proceed to the list of things to do while searching for a company, let us briefly touch on the topic of why small practice owners want to outsource the billing process in the first place.

Small practices rarely have the option to maintain an entire billing department since they do not have the resources for it. Usually, it is one or two employees that take care of the practice’s scheduling and billing, and with one of them on maternity leave, all the paperwork, claims, follow-ups, and everything else related to cash flow grinds to a halt until everything gets resolved, and the billing department returns to work. Meanwhile, you, as a practice owner, are completely in the dark about the current state of your practice’s finances.

In addition, the regulations applicable to the medical practice are consistently evolving and increasing. It is challenging, if not outright impossible, for small practices to keep their billing departments compliant without losing precious time and money on training.

This is why many small practice owners decide to rely on outside medical billing companies. Still, it is important not to make the critical mistake of choosing the wrong service provider in the process

1. Ask Them How Many Small Practices They Work With

Not all medical billing companies are the same, and some will focus on larger entities such as hospitals with thousands of claims to process per month. Therefore, it is a good idea to ask them directly how many small practices they work with and if they have the expertise that your practice needs. You should remember that companies that deal with hospitals have very different approaches to billing as compared to small practice medical billing companies, as the latter understand the importance of speed, efficiency, and personal attention.

2. Inquire About Their Clean Claim Rate

Another thing that you should ask a medical billing company is about their clean claim rate. The clean claim is a term that refers to a claim that was submitted correctly the first time around, and an average clean claim rate that you should be looking for is not lower than 95%. The lower the clean claim rate is, the more mistakes and errors you will likely have to deal with on a regular basis, which will slow you down considerably as the majority of denied claims will need to be resubmitted.

A trustworthy billing agency will not hesitate to provide you with a clean claim rate, while those that do not have much to boast about their process may avoid the topic entirely.

3. Ask How They Handle Denials

Speaking of denied claims, it is of paramount importance to understand what kind of denial management process the billing company employs. It is normal for claims to be denied due to various reasons, but what is essential is whether the denied claim will be simply resubmitted or if the billing company has an organized process for handling denials that will eliminate these errors in the future.

The best practice billing companies will have a comprehensive denial management package that will prevent denied claims from occurring again in the future by identifying the root cause of the error.

4. Make Sure Their Pricing Is Transparent

The majority of medical billing companies charge a percentage of collected revenues, so it is essential to understand their rates thoroughly. Although there is no unified standard for this percentage, most companies charge somewhere between 4 and 9 percent, depending on the volume and the particularities of the service, so any percentage below 4 percent should raise your suspicion as you may get less value for your money. However, it is also necessary to be aware of precisely what you are paying for, as some companies may offer additional services on the side for an extra fee.

A billing company that is confident in its rates will be completely transparent about what they provide for your money.

5. Ask Them to Confirm Their Compliance and Security Measures

The medical billing companies that you are considering should be able and ready to comply with HIPAA regulations as they deal with extremely sensitive and confidential patient data on a daily basis. Therefore, a reliable billing company will be able to provide you with detailed information about the security measures that they employ on a daily basis to ensure that your patients’ data remains safe and secure with them.

6. Inquire About Dedicated Support

One thing that many practice owners complain about is that they are always put on hold or get redirected to another person that has no idea about their particular case every time they attempt to contact their billing company. This happens because the billing companies do not have a dedicated account manager that handles the communication with their small practice clients. Instead, the small practices are treated like an afterthought and are much lower of a priority as compared to larger entities.

Therefore, it is essential to ask the billing agency if they have a dedicated account manager that is ready to assist you any time you need help and explain your particular situation in detail.

7. Ask Them If They Have Experience With Specialty Billing

The majority of practice owners are general physicians, but there are some that offer services that go beyond primary healthcare, such as mental health, orthodontics, dermatology, and many others. Every specific area of healthcare has its own set of billing guidelines, which is why it is essential to understand whether the medical billing company that you are considering has the relevant expertise. The most reliable way to avoid errors in this area is to choose a medical billing company for small practices that has experience with the specialty that your practice is engaged in.

8. Ask Them About Revenue Cycle Management

Revenue cycle management is an umbrella term that encompasses every step in a patient’s journey from the moment they schedule an appointment until the moment when the final payment is submitted to your practice. The most reliable revenue cycle management companies do not just collect and submit claims. They take care of the entire cycle, ensuring that there are no costs that have gone unpaid, which is especially important for small practices since they are much less likely to notice and claim these expenses.

9. Inquire About Onboarding Time

The transition to a new billing partner can be a stressful and taxing experience for any small practice, which is why, when you are talking to medical billing companies, you should ask them if you can switch to them seamlessly while preventing any disruptions to your practice’s cash flow. In addition, it is essential to learn how long the entire onboarding process will take and ask them for all the details that you are able to get regarding the transition. A competent and experienced medical billing company will take a short time to analyze your current system and prepare the relevant documents to finalize the transition as soon as possible.

Everything You Should Know While Searching for Medical Billing Companies in California

When looking for medical billing services for your practice in California, the best companies will have the expertise that your practice needs regardless of where they are located. However, if you are looking for companies that have local experience, it will greatly facilitate the transition to working with them.

Red Flags to Watch Out For While Searching for Your Billing Partner

When it comes to choosing the right billing company for your small practice, you must understand that every reputable company will be transparent and honest about its capabilities, past experiences, and any other information that you may ask for. On the other hand, a billing partner that has nothing to hide will give you vague or evasive responses, steer you clear of asking for references, and will try to get you to sign the contract for medical billing services right away without showing you any examples. Another red flag is when you get the same response every time you ask a question, which means that the company does not value you and your practice as their long-term client.

Your billing partner should be open to answering all of your questions, and the best companies are always eager to demonstrate their expertise in hopes of winning your business

Final Remarks

Remember that choosing the right billing partner is about more than just finding a company that will submit your practice’s claims on its behalf. A trustworthy company will be transparent about their services, have the expertise that your practice needs, and be willing to answer any questions that you have to assure yourself that you are making the right choice.

Do not hesitate to spend time on the most crucial steps while looking for a competent billing partner that understands the particularities of your practice’s services and will be committed to its success. Choosing a company that provides vague responses about their billing services is a bad sign as the best companies do not hide anything behind as they believe that honesty is the best policy for long-term relationships between their clients and them. A professional billing partner will operate in the shadows of your practice while you do what you do best.

Moving Toward Change

If you feel that your small practice is losing money and time while relying on the assistance of a billing company, it may be the right time to change things up. An audit of your current situation will show you which areas you need to improve on, and you should always keep in mind that a competent partner will enable you to grow exponentially.