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Anesthesia Practice | Part 2: Insource or Outsource Anesthesia Billing

This is part two of a multi-part series on setting up an anesthesia practice. In this post, we will help you understand the pros and cons of insourcing vs outsourcing your anesthesia billing so you can make the choice that’s right for you. If you need to take a step back and start at the beginning, check out part one where we cover the first steps to set up your practice.

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Once you have completed the first steps to set up your anesthesia practice, you should determine whether you want to handle the billing and coding process yourself or outsource to an anesthesia billing company.

Whether you insource or outsource, the medical billing, coding, and collections processes are complicated especially for anesthesia. These processes have a huge impact on your revenue and cash flow, so you want to make sure you pick the solution that is optimal for your practice. Let’s explore the pros and cons of both options to help you determine which is the right course of action.

Whether you choose to insource or outsource you want to optimize anesthesia billing to maximize revenue and cash flow.

Investing in People Processes and Technology

anesthesia practice - outsource anesthesia billing - money

It all comes down to investing in people, processes, and technology. If you choose to insource your billing, then you will have to make these investments directly and if you outsource, you’re paying a billing company through fees to make these critical investments for you. Here are just some of the investments that must be maintained to ensure proper anesthesia billing:

  • Complete infrastructure setup: A complete anesthesia billing infrastructure has a lot of moving parts. Anesthesia billing companies or practices looking to insource must purchase and maintain the required technology systems (and of course remain HIPAA compliant), select and manage a collection agency, create and maintain various forms required for patient intake and to submit Medicare payments, and continuously purchase and update various billing and coding manuals.
  • Additional staff: Since most anesthesiologists don’t have back office staff, completing billing in-house requires the additional process of hiring and managing staff (with anesthesia-specific expertise) as well as renting out office space to house them. If you outsource, this is taken care of behind the scenes.
  • Consistent training: You must continuously invest in your billing experts with up-to-date anesthesiology-specific training on the latest billing codes to be sure that you are maximizing revenue.

Most independent anesthesiologist practices don’t have a high enough volume of billing to justify all these investments of time and money.

Should You Insource or Outsource Your Anesthesia Billing?

If the above isn’t daunting enough for you to consider outsourcing your billing – here are the pros and cons of outsourcing and insourcing so you can see what you’re getting yourself into (or out of).

Outsourcing Pros

  • Lower operating costs: With a small number of cases it probably doesn’t make sense to purchase billing software or spend the time and money required to hire and train your own anesthesia billing experts.
  • Fewer billing errors: Outsourcing gives you the assurance that your billers are up to date on the latest conversion factors and codes for anesthesia billing. What’s more, outsourced billing companies should have multiple people reviewing every claim—increasing the quality of submissions and maximizing reimbursements.
  • Increase take-home: Optimized billing processes and ruthless follow-up can ensure you receive every penny you have worked for on a given case. While not every outsourced billing company goes this extra mile, if they do it can help increase your take home by 5-15%.

 Outsourcing Cons

  • Less control: As with any outsourced process, you will have less direct control – but that shouldn’t mean you have less insight. The right billing company should be able to provide you with transparent and consistent reporting, so you always know exactly how your business is doing.
  • Higher direct costs: Depending on your situation, outsourcing could result in higher fees than the direct costs it takes to hire your own employees. However, it is important to remember, that when going inhouse you’re trading variable fees (charged based on a percentage of revenue) for fixed costs (employee salary and benefits). These fixed costs can be problematic if there is a sudden drop in business.
anesthesia practice - outsource anesthesia billing - coding

Insourcing Pros

  • Remain in control: Some anesthesia professionals want to maintain control over all aspects of their practice – including billing. Some people feel that direct employees give them more oversight than working with an agency that has its own processes.
  • Less expensive: Doing billing yourself can be “cheaper” in the long run – but only if you have enough cases. Many outside billers charge based on a percentage of revenue or per procedure. If you are paying staff a fixed salary + benefits this may be lower than what a billing agency would charge.

Insourcing Cons

  • More risk and hassle: With more control comes more responsibility for your entire billing process. This includes not only the medical coding, billing, and filing, but the hiring, training, and supervision of employees to do this work for you. Any mistakes become a problem for the entire anesthesia practice. This liability isn’t just around standard employee issues – it includes all the HIPAA regulations you must follow as protected information flows through your billing department.
  • Possible lower take-home pay: Anesthesia billing is incredibly complicated. Without the right expertise, optimized processes, and meticulous reconciliation you will likely see lower total collections.

Ultimately whether you should insource or outsource your billing comes down to the number of cases you are working with and your team’s desire to manage the necessary people and processes.

Remember: Not All Anesthesia Billing Companies are the Same

If you do decide to go with an outsourced billing company, try to find an anesthesia-specific biller instead of a general medical billing company that also has some anesthesia billing clients. Beyond that, keep in mind that medical billing is not a commodity service. There are significant differences in how much revenue any given biller will bring to your practice for the same set of procedures. Look for a provider that has a comprehensive reconciliation process and is willing to take the time an effort required to collect every penny you are owed – or you could be leaving rightfully-earned money on the table.

Look for a billing company that has anesthesia-specific expertise and a ruthless reconciliation process that is sure to get you every penny you are owed.

Wrap Up: Insource vs. Outsource Anesthesia Billing

There are pros and cons to both insourcing and outsourcing anesthesia billing. We think that the main factors that should guide your decision is the number of cases you have and your teams willingness and interest in directly supervising staff.

anesthesia practice - outsource anesthesia billing - team

Want to know how much outsourcing would cost and get a complete understanding of all the services included with our billing package? Give us a call at (262)787-4050 or contact us.

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