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Insourcing vs Outsourcing Anesthesia Billing

Medical billing, coding, and collections are all essential components to keeping your anesthesia practice running smoothly. Your revenue and cash flow are entirely dependent upon these billing processes. So it’s obviously critical to ensure that these processes are as close to optimal as possible. The first step is to decide whether you want to complete your billing in-house or outsource it to another team. There are pros and cons to each route so let’s explore them.

Optimal anesthesia billing processes maximize revenue and cash flow.

Insourcing

Pros:

  • Less expensive: Doing billing yourself can be “cheaper” than outsourcing if you have a sufficient volume of cases. Outside billers typically charge by the procedure or based on a fixed percentage of revenue. If you are paying your staff a fixed salary and have a high enough revenue base— then salaries + benefits might be lower than what a billing agency would charge.
  • Maintain control: Some doctors feel that they have more control over the billing process when their direct employees are doing the billing versus working with an agency that works within its own procedures.

Cons:

  • Possibly lower revenue: Anesthesia billing is hard. It requires a significant investment in people and processes that are hard to justify if you’re billing for less than a hundred doctors. Sub-optimal investment generally results in lower total collections. Generally speaking, we find that we can increase the overall revenue of an anesthesia group by 5-15% compared to what their in-house team was collecting. The difference lies in our greater ability to invest in rigorous systems, training, and management.
  • More hassle and risk: The flip side to more control is additional responsibility. Employees must be hired, trained, supervised, and occasionally fired. Any mistakes or problems they create become the problem of the group as a whole. There is significant liability associated not just by the usual employee issues but also by the enormous revenue and HIPAA protected data that flows through your billing operation.

Choosing between insourcing or outsourcing your billing comes down to the number of cases you have and whether or not it makes sense to directly invest in your own team or to indirectly invest in an outsourced team.

Outsourcing

Pros:

  • Increase revenue: The right anesthesia billing company will help you increase revenue and in turn increase profits. A strong team will have optimized processes and rigorously follow up on rejected claims over and over until they are paid in full. This alone can help you collect more on each claim and increase revenue by 5-15%.
  • Reduce billing errors: By using an anesthesia expert, you can feel confident that they know all the latest codes and conversion factors used in the industry. This expertise reduces the number of claims that are declined/rejected and additional insight can provide essential feedback to maximize your reimbursements.
  • Decrease operating costs: If you have a smaller number of cases, it doesn’t necessarily make sense to take the time, money, and resources to invest in W-2 anesthesia billing employees and the supporting systems that they require.

Cons:

  • Higher direct costs: Again, depending on your situation, it might cost less in direct costs to hire employees versus paying a billing company. However, keep in mind that in doing so, you’re trading variable costs for fixed costs—which could come back to bite you hard if there’s a downturn in business.
  • Less control: With someone else handling billing, you will have less direct control; however, the right biller should be able to provide you with reports so you still have clear insight into exactly how your business is running. Don’t even consider doing business with a billing company that doesn’t offer full transparency.

It’s All About Investing in People, Processes, and Technology

Significant investments must be made into people, processes, and technology supporting anesthesia billing regardless of if you complete your billing in-house or if you outsource it. If you choose to insource billing you will need to make these investments directly in terms of training, updated guides, and systems. The costs built into a billing provider fees indirectly pays for these investments.

Whether your billing is in-house or outsourced—
don’t underinvest in your billing systems. The “savings” will cost you many times over in terms of decreased revenues and increased risk of compliance errors.

Here are a few of the investment requirements for a robust in-house billing service:

  • Infrastructure setup: Setting up the infrastructure for anesthesia billing is an extensive
    process that includes:

    • Purchasing and maintaining the required technology systems… as well as the accompanying cybersecurity and HIPAA compliance headaches
    • Selecting and managing a collection agency(ies)
    • Creating registration, encounter, and HIPAA notice of privacy practice forms
    • Purchasing Health Care Financing Administration (HCFA) forms to submit bills/claims to Medicare or Medicaid
    • Obtaining the Medicare billing manual (must be regularly updated)
    • Purchasing CPT-code and ICD-10 books (must be regularly updated)
    • Purchasing anesthesiology specific coding books (must be regularly updated)
  • Additional staff: Since most anesthesiologists don’t have back office staff, in-house billing generally requires hiring (and managing) additional employees (with anesthesia-specific expertise) as well as possibly renting out an office space.
  • Up-to-date training: Your additional staff needs to have anesthesiology-specific
    training in order to effectively bill and maximize collections.

Generally speaking, it can be hard to justify the investment of providing constant resources and training unless you have a high volume of billing (For instance, as an outsourced billing provider we support over 400 anesthesiologists, which makes our extensive technology and training investments worth it).

If your insourced team doesn’t have the training and resources to perform optimally, it’s possible you will suffer potentially huge loses in under billing/collecting or worse a reputation-crippling over-billing incident.

Not all Billing Companies are the Same

Remember, not all general billing providers or even anesthesia-specific billing providers are created equal. If you choose to outsource, you need to find an organization that will make the same dedicated effort as you would to invest in their people, processes, and technology. Since anesthesia billing is such a unique specialty you should find an anesthesia-specific biller, not just a general billing company that happens to do anesthesia billing. We recommend looking for a team that has a meticulous reconciliation process and is willing to take the time and energy needed to collect every penny you are owed.

So Should You Insource or Outsource?

If you have enough cases to justify the investments required
and are willing to take on the additional hassle and responsibility of insourcing billing, then doing billing in-house might make sense.

However, if you don’t have a ton of cases or don’t want to
commit the significant financial and managerial resources needed to invest in hiring, training, and managing a strong anesthesia-specific billing expert/s, then we strongly recommend outsourcing.

Obviously, as an outsourced billing provider, we are somewhat biased, but we have certainly seen cases where it made sense to keep the billing in-house.

Comprehensive Billing and Practice Management Services

Are you wondering how much it would cost, and what benefits
you might see, by outsourcing? Give us a call and let’s chat.

Download our Free eBook: Transparency in Anesthesiology Billing: Everything Your Billing Company Doesn’t Want You to Know

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Anesthesia jokes are funny - getting underpaid isn′t.

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