Industry reports indicate that nearly 65% of medical claims are never resubmitted, resulting in revenue loss for healthcare providers. The common thread in this widespread challenge is inefficient billing practices. Over the years, providers have sought professional billing services to rectify these issues. Inefficient billing practices have numerous consequences and strains on the provider’s finances. If you’ve had to deal with such in the past, this article clarifies how medical billing can help you evade them. Here are ways to boost your company’s profitability through this service.
A Brief Overview of Medical Billing
In case you're hearing the term for the first time, medical billing helps providers manage their establishment's financial stability alongside the quality of patient care. Finance is equally vital in medical systems, considering it's the backbone of every smooth operation. The U.S. medical system operates on a level of transparency and accuracy that has become non-negotiable, and medical billing services were designed to help providers meet this standard.
The billing cycle for healthcare systems involves multiple steps, each critical to achieving the best results. These steps typically begin with insurance verification, followed by additional steps such as medical coding, claim submission, processing, and payment posting. While it may seem that the primary purpose of this service is to receive payment for medical services, several other benefits are associated with it.
The Role of Medical Billing in Healthcare Profitability
Ensuring Efficient Revenue Cycle Management
The entire process of medical billing is designed to optimize revenue cycle management. RCM is an umbrella term that encompasses the period from when a patient first sets foot in a hospital until they leave. It includes everything from billing to payment collection and tracking. Medical billing professionals help facilitate this process and manage its most challenging aspects. Their services are particularly helpful in submitting insurance claims and assisting providers with payment.
Reducing Claim Denials and Revenue Loss
The cost burdens of claim denials are a real problem for healthcare systems. Stat News states hospitals spent roughly $20 billion in 2022 dealing with denials across all payer types. Of this, about $10.6 billion was spent overturning claims that were later paid, representing wasted effort. Providers spent an average of $43.84 per overturned claim. Such an occurrence is unsustainable, regardless of how we view it. One thing that has been effective for providers in avoiding situations like this is seeking professional medical billing services. These platforms often have the right resources and tools to facilitate successful submissions and receive appropriate compensation.
Improving Regulatory Compliance
Another often-overlooked advantage of efficient medical billing is its critical role in ensuring regulatory compliance. The U.S. healthcare system operates in one of the most complex regulatory environments in the world. Providers will always need to navigate the maze of laws, guidelines, and payer-specific rules that govern how care is billed, reimbursed, and reported. The consequences when they fail to comply aren't pleasant either, because non-compliance can lead to claim denials, financial penalties, audits, and even legal action. A quick reference would be how HIPAA establishes national standards for protecting patient health information during billing. Efficient medical billing systems help meet such standards by ensuring that all claims are processed and transmitted securely, thereby reducing the risk of data breaches, regulatory violations, and the financial implications they come with.
Improving Patient Satisfaction and Customer Retention
Medical services in the United States are expensive. In fact, the U.S. has some of the highest healthcare costs in the world, with significantly higher prices for hospital stays and other medical treatments than many other nations. This challenge is common across the board, even in practices like therapy. ABA therapy, for instance, can cost as much as $120 to $150 per hour without insurance, and $9600 per month. It's tough enough for parents to handle such financial responsibility in many situations without having to deal with insurance claim denials. Utilizing ABA billing and other relevant services is a practical approach for enhancing patient satisfaction and customer retention. With better customer retention, providers stand a better chance of increasing profitability.
Providing actionable financial insights
Claim denials often reveal patterns, such as recurring coding errors, specific insurers that delay payments, or services frequently deemed "not covered." Understanding these trends is crucial to managing the hospital's financial profitability, as it helps address such issues, reduce future denials, and recover lost revenue. These billing records also show which services generate the most revenue and which struggle to cover costs. For example, if elective procedures produce higher margins than routine visits, practices can allocate resources strategically or adjust pricing models.
Get A Medical Billing Professional Today
Without medical billing services, the healthcare industry would face many financial difficulties. Considering the numerous platforms available today, your business shouldn't be left lacking. Take some time to research available options, but ensure you prioritise a credible professional.
