Medical billing is the process of submitting claims to insurance companies to ensure that physicians and other medical professionals receive payment for the services they have performed. Medical billing offshore outsourcing involves hiring a third party to handle medical billing tasks. Medical billing professionals are then responsible to translate paper or electronic medical records into standardized codes that are used to bill patients and payers. This process is the same for both private and government insurance companies.

Medical billing is an important stage of the healthcare revenue cycle. Because multiple interactions among the healthcare provider, insurance company, and biller are involved, the medical billing process can take several days or months to complete. Changing regulations also adds to the complexity of the billing operation. Skilled medical billers can optimize revenue flow for healthcare providers by shortening resolution times and reducing the number of denied claims.

Medical Billing and the Healthcare Industry

Medical billing has relied on paper documents for many years, but health information systems software has changed all that. Today, most healthcare organizations have some form of electronic medical record (EMR) capability. The government has also provided incentives to those that switch from paper-based records to EMR. Health information systems or health management software facilitates the processing of large-volume claims, helping organizations optimize revenue cycles.

All healthcare organizations in the United States transitioned to the ICD-10 (International Classification of Disease 10th revision) coding system in late 2015. The ICD-10 replaced the ICD-9 code set and increased the number of billing codes to about 68,000. This expansion created a strong demand for trained medical billers and coders. According to the U.S Bureau of Labor Statistics, employment for these specialists is expected to grow 7 percent from 2021 to 2031. In fact, approximately 14,900 openings for medical billing specialists are projected each year.

The current implementation of ICD-11 has further influenced employment demands. In addition, medical billing positions will keep opening up as people leave the profession or retire. Another growth driver is the increasing aging population in the U.S., which needs constant healthcare services. As such, the demand for professionals needed as intermediaries between insurance providers and healthcare organizations will keep increasing. 

Medical Billing Professionals

Medical billers and coders are responsible for submitting and following up on claims made to healthcare insurance agencies. The daily duties of billing professionals vary with the type of facility, but medical billers generally gather all billing-related information and send them to insurers. Billers must know how to read paper or electronic medical records and understand different medical codes. They also keep constant communication with medical professionals and insurance agencies by requesting information whenever needed.

Although not required by law, medical billers in the U.S. are encouraged to become certified by taking an exam. New requirements by health insurance companies have also made specialized training necessary. Several schools and institutions currently offer training and education in medical billing and coding. These schools aim to provide the theoretical foundation for people wishing to make a career in the medical billing field. Training and certification also allow current medical billers to gain the advanced skills to improve their salary. They also gain the expertise that helps them optimize their institution’s revenue.

Outsourced Medical Billing

According to a study made by Precedence Research, the global hospital outsourcing market size was estimated at US$ 270 billion in 2020 and it’s expected to reach US$ 736.47 billion by 2030. The U.S. is the biggest source of outsourcing activities in the healthcare BPO industry, followed by Europe. Top outsourcing destinations include India, the Philippines, and China.

Outsourced medical billing drivers include:

• The Affordable Care Act (Obamacare)
• Rising cost of healthcare
• Lack of skilled talent in-house
• Low cost and access to technology

Outsourcing firms employ skilled talent and have the capabilities to perform routine billing and coding work, as well as other back-office tasks for growing practices and companies that lack resources. Both healthcare insurance companies and healthcare organizations are looking at outsourcing as a viable option to gain competitive advantage.

On another hand, medical billing can be very time-consuming and expensive when done in-house. Having an internal billing department means investment in overhead, salary and benefits, training, technology, infrastructure, and supplies. Medical billing outsourcing is significantly less expensive than in-house medical billing for startups and small healthcare companies. For midsize and larger organizations, outsourced medical billing provides immediate access to skilled talent, best-in-class billing technology and processes, as well as end-to-end BPO services.

Medical billing offshore outsourcing is helping organizations streamline their operations, reduce risk, improve patient care, and reduce costs. Outsourced medical billing also allows organizations to focus on their core activity while keeping up with changing regulations. In addition, outsourcing helps companies improve collections and revenue flow.

Outsourced Medical Billing Services

Medical billing firms typically provide billing and accounts receivable management services to hospitals, physician private practices, and other healthcare organizations. They specialize in billing, coding (CPT, HCPCS, ICD-9/10), claims processing, and receivables management.

Commonly outsourced medical billing services include:

• Paper and electronic claims submission
• The tracking of claims review and scrubbing
• Denials and appeals
• Payment posting
• Refiling and secondary filing
• Call center services
• Revenue cycle management

Claims Submission

After every appointment, the physician or healthcare provider sends a bill to the insurance company. The insurance company compares the patient record with the policy to determine if the procedure or test is covered. If the procedure is covered, the insurance company sends payment to the physician. If the procedure is not covered, the patient is responsible for paying the remaining balance.

The medical biller gathers information about the patient, procedure, and insurance policy before preparing the bill. The medical biller then fills out the standardized claim forms with the beneficiary’s name and address, NPIs, certification numbers for certain tests, date/s and quantity of service, and other required information. The forms also include valid diagnosis codes, procedure codes, level II HCPCS codes, and applicable modifiers. Once completed, the claim is transmitted electronically, sent by mail, or delivered in person to the insurance company. The biller saves the acknowledgement of the health insurer’s receipt.

Claims Scrubbing and Verification

Outsourcing firms use advanced software to verify and ‘scrub’ (clean up) claims forms before they are submitted to insurance agencies. Claim scrubbing software validates codes and modifiers, medical necessity, usage (age, gender, units), format, dates and place of service, reimbursement, and revenue. Scrubbing software allows medical billers to upload one claim or a batch of claims and receive reports in seconds.

Scrubbing and verification aim to reduce errors and decrease claim denials. Scrubbing detects potential problems prior to submission and alerts the biller to make immediate corrections. Through a comprehensive screening process, scrubbing validates denied claims for recovery and to recoup lost payments. It also reduces claim turnaround time, overall A/R days, and costs associated with rejected and resubmitted claims.

Claims Appeals and Denials

Claims denial and appeal services are designed to appeal, track, and manage denied claims.

Medical billers ensure that denied claims are not automatically written off or ignored. There are different types of denials. Some are easy to spot in paper or electronically, but others appear as line items with little or no information. A skilled medical biller can get the denied claim paid through various denial management strategies. These include: reworking, resubmission, correction of a coding issue, and submission of additional documents from the patient or physician. Some outsourcing firms assign staff members to handle specific payers or specific denials for maximum efficiency.

Accounts Receivable (A/R) Follow-Up

Outsourcing firms offer A/R follow-ups to speed up and increase revenue collection.

A/R follow-ups start after the medical biller sends insurance claim forms to the insurance company. The follow-up time frame depends on how long the claim has been submitted and if transmission type is either electronic or on paper.

Follow-up for electronic claims typically starts 10 days after submission, while follow-up for paper or HCFA claims starts 20-45 days after submission. Follow-up can be done online, through telephone, or by mail. The follow-up can be sent in response to a no remark or no status claim. It can also be sent as a result of unpaid claims due to authorization, referral, non-participation, medical necessity, terminated insurance, or other reasons.

Payment Posting

Payment posting is the process of recording payments in billing management software manually or automatically. Automatic posting of electronic insurance payments can be done for post-insurance checks from EOBs, ERAs, patient payments, and print receipts.

Effective payment posting involves reading and analyzing explanation of benefits (EOB) forms before entering details into the billing management software. Payment patterns alert billing departments and help them collect outstanding receivables easily and quickly.

Revenue Cycle Management

Revenue cycle management (RCM) refers to the entire process of registering patients, verifying insurance and benefits, capturing charges, and processing claims.

Some outsourcing companies provide end-to-end revenue cycle management for private practices and large healthcare organizations. They use the best-in-class accounts receivable management processes. This ensures that the client receives payment from both insurance companies and patients in a timely manner.

The outsourcing partnership usually begins with a detailed evaluation of current billing practices and identification of issues, such as lengthy A/R, and high number of write-offs, denials and adjustments. The provider then creates a comprehensive solution to address specific problems that can help the client achieve their billing goals.

To learn more about outsourcing, you can read our Top 8 Qualities of an Outsourcing Company in the Philippines article. We invite you to follow us on social media and to visit our website to learn more about our services.

About Us: Sourcefit is a widely recognized US-managed business process outsourcing company based in Manila, Philippines. We proudly serve over 100 clients with a workforce of more than 1,300 employees. Our global centers can serve multiple markets, and our staff is highly proficient in English, Spanish, French, and Portuguese. Whether you need a few or many employees, we can help you achieve your business goals and build high-quality offshore teams.

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We recently received the Fortress Cyber Security Award from the Business Intelligence Group. Sourcefit was also honored with the prestigious recognition of Best Outsourcing Solutions Provider in the Philippines during the 2023 Business Excellence Awards.

Other awards include: FT ranking of 500 high-growth Asia-Pacific, The Marketing Excellence Awards, Inquirer Growth Champion,  HR Asia Awards, among others.

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