MD Preferred Blog

*The views expressed by the authors below do not represent the views or opinions of MD Preferred Services.

The Billing Conundrum

Tuesday, May 22, 2018

Two physicians I am working with are leaving their employment with a large group, dissatisfied with the back office operations and billing situation. Years ago they had their own practice and did everything in-house. Now, three years later they want to recreate the practice of their past.

These docs are experienced and operated a successful private practice in another market before coming my way. After a lot of discussion it’s apparent they are not only strong clinicians who know what kind of support they need from their clinical staff, but also have the characteristics of good leaders who know how to motivate a small staff and engender a healthy “family business” type environment for their employees.

We’ve found them a great IPA to work with, one that provides good in-network rates and a slew of value added services and vendor connections to help make their return to private practice successful. In fact, we’ve only got one real issue to deal with.

Billing. What did you expect?

I’ve worked with a host of practices over the last ten years. Some billed in house. Some did that, but employed a certified coder to oversee things. Others used the latter to oversee outsourced billing, or were cash only. (And some were out-of-network, another Pandora’s Box of issues I won’t address here.)

Billing is always a hot topic with docs. I’ve met many that have felt no person or company could collect their money better than an in-house staff. And others that shied away from out-sourced billing because of a bad story they heard years ago from a peer. And there have certainly been some bad stories out there.

Anxiety is always present when turning over the collection of your money to people you don’t see every day. But should it be?

But unless you’re an all cash practice, or have a practice that is predominantly Medicare or Medicaid, I’ve come to feel like outsourced billing is the way to go, for a few simple reasons:

  • Payer relationships
  • Regulations
  • Complexity of insurance plans and ACOs
  • Government and hospital reporting requirements
  • Handling of claims denials
  • Perspective on payer reimbursements
  • Dealing with patient balances

This is, of course, a short list. In fact, each topic listed above can generate a lot of discussion and comment. For example, it’s almost impossible for someone not dealing with payers every day to understand how they are constantly changing reimbursements, reporting requirements, and even some rate structures as they evolve and change. This can be especially endemic within the government plans.

I’d suggest the big question is: Can a billing company stabilize my cash flow, aggressively address my revenue cycle, and keep me up to date on all billing related matters that might impact my practice? Can they help me and my staff learn how to code more effectively, and understand what payers are looking for in complex coding situations? Is their pricing truly expensive, given what I would have to create within my own office---and, crucially, MANAGE???

Focus on that last word. Most docs I know don’t want to take on another internal management position where they are going to be forced into a learning curve on a subject with extreme levels of detail and risk. In fact, in most instances where I’ve seen in-house billing the docs have started off dedicated to making it effective, but fallen away as their private practices and lives became demanding; responsibility for the billing effort and staff becomes a pariah of a responsibility and usually cash-flow suffers in one way or another. And no one noticed until cash flow changed and their salary check was effected, and then it was crisis mode and high anxiety levels.

So it’s not always about cost. It’s about the value realized for the expense. You have to ask a lot of questions, and can rely on your peers for a variety of opinions, good and bad stories, and cost data. Or you can work with a consultant who’s been down this road before, who can analyze what you need and be there to ask all the right and necessary questions. As healthcare reimbursement becomes more complex in lock step with the growing responsibilities of your clinical practice, you need to find ways to utilize your time and manage the non-clinical parts of your practice most effectively. Outsourcing billing, when done right, is certainly one of them. And if the entry strategy is good there should be no reason for anxiety.—TOM ELLIS III

Tom has been a healthcare consultant in the North Texas area for over twenty years, and has worked with a variety of clients, focusing on physicians. More information on Tom can be found at


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