With every passing year, challenges for healthcare providers are increasing. Especially due to rising inflation and supply chain costs. However, the most difficult problems lie in the internal operations. High employee salaries, administrative expenses, bills, billing errors, and denials, when combined, pose a significant threat to a practice’s stability.
To counter this and to stay competitive and grow, many practices are turning to business process outsourcing (BPO) as a strategic solution. But why is it a good solution, and what can you do to tackle these challenges?
Well, these are the questions that we are going to address in this blog. So, let’s start.
Before we discuss the solution, let’s take a look at the current situation of healthcare billing and the problems. This way, we can handle the issues more strategically. Claim denials are on the rise in the United States. For instance, recent data reveals that 11% of all claims were denied in 2023, which is an increase of 8% from 2022.
67% of healthcare providers feel payment processing is taking longer than before. This delay compounds the financial pressure practices face, as cash flow becomes increasingly unpredictable. The most common causes of denials include missing or inaccurate patient data, authorization issues, and coding errors.
What makes this particularly challenging is that payer policy changes are occurring more frequently than in previous years. The following data shows just how much the industry is affected:
Let’s now discuss the 5 most important things that you can do as a healthcare provider to minimize the losses and boost your profits.
Success begins at patient registration. Accurate data collection prevents downstream billing issues that cost significantly more to resolve later. The American Hospital Association reports that effective revenue cycle management can lead to a 10-20% revenue increase simply by streamlining patient registration processes.
For better data collection, you must implement real-time eligibility verification, authorization automation, and digital patient intake forms in your practice. By doing this, you can reduce your denials by a lot. Not only this, but your whole system will become much more streamlined and efficient.
Artificial intelligence and automation tools transform billing operations from reactive to proactive. Auburn Community Hospital, an independent rural facility, achieved a 50% reduction in discharged-not-final-billed cases and a 40% increase in coder productivity through strategic technology implementation.
By implementing the right tools, software, and processes, you can increase your clean claims rate by up to 98%, first pass ratio above 90%, and achieve less than 30 days in A/R.
Different medical specialties face unique billing challenges requiring tailored strategies. Smart medical practices know this. So, what can you do? The most cost-effective solution is to outsource operations to specialized billing companies.
For example, oncology healthcare providers can acquire oncology medical billing services from third-party companies. These companies can easily deal with complex oncology coding, prior authorization requirements, and evolving payer policies. These companies understand the intricate coding requirements and medical necessity documentation essential for oncology practices.
Many practices discover that outsourced medical billing delivers superior results compared to in-house operations. Industry research shows outsourcing can reduce denial rates by 10-20% while cutting operational costs by up to 30%.
Benefits of outsourcing:
Successful practices establish systematic monitoring processes to identify trends, prevent issues, and continually optimize performance. The key lies in tracking the right metrics and responding quickly to variations.
When you keep a check on the important metrics, you can find the weak spots and improve them. Plus, if you have partnered with a billing company, you can track their progress. If the company is underperforming, you can decide to switch companies or renegotiate the contract.
The following are the industry benchmarks:
Medical practices are facing a difficult situation nowadays. Rising costs and regulatory demands make it harder to grow, but business process outsourcing offers a lifeline. By making the right strategic decisions at the right time, you can save a lot of money and obviously the headache of administrative bottlenecks.
The path forward requires commitment to systematic improvement rather than quick fixes. Start by assessing your current performance against industry benchmarks, then prioritize the strategies that address your most significant challenges.
