The Future of the Medical Billing

Industry Recently, medical billing company owners have been speculating about the forthcoming developments in the medical billing industry. With our experience in this field since 2015, we have witnessed significant changes over the years. Despite these changes, the future of the medical billing industry remains promising, and here’s why.

Rise in Claim Denials

Do you remember when submitting a batch of claims would result in 98% of them being paid on the first try? Unfortunately, those days are gone. Nowadays, medical billing requires more resources than ever to ensure claims are paid. Providers need to hire additional employees to handle this workload effectively. One option is for billing companies to hire affordable offshore labour to assist with the time-consuming process of contacting insurance companies to secure claim payments. If a billing company relies solely on an American workforce and pays them the industry average wage of $15-$20 per hour, it becomes challenging to remain profitable. Hold times when dealing with insurance companies can exceed forty-five minutes, depending on the carrier. Moreover, once you finally reach a representative, they may only allow you to check the status of three claims. By employing an offshore vendor with an average hourly wage of $7-$12, profitability becomes more achievable. The talent pool overseas has grown significantly, and if billing companies leverage this resource, they can continue to achieve excellent results and profits.

Competition from Rivals

Companies like Athena can undercut the market due to their offshore teams, software, and operational efficiencies. They target physicians and healthcare groups, offering rates as low as 2-3% of collections. This poses a challenge for many small medical billing companies. Physicians find it difficult to compare the service and reimbursement rates offered by companies like Athena or billing solutions provided by software companies such as E-Clinical Works, Harris CareTracker, AdvancedMD, and others with those of small billing companies. Many of these companies rely exclusively on offshore teams. To succeed in medical billing, it is necessary to have a closely integrated onshore and offshore team.

Some offshore teams claim to be capable of handling everything, but from our experience working with offshore teams since 2005, we have learned that there are limitations. Tasks such as high-level appeals, mailing records, answering patient calls, and managing client communication cannot be successfully handled by offshore teams alone. India was the first country outside the U.S. to enter the US medical billing industry, giving them an advantage and a large talent pool compared to other countries. However, even India cannot handle the complete revenue cycle management (RCM) process.

Medical billing is not just a commodity; it is a service-oriented business. Physicians value personal service and often prioritize hiring a local company that understands their patient demographic, insurance mix, credentialing, fee schedules, and reimbursement rates, as well as those of other providers in similar specialties. These factors are all essential components of the value proposition offered by a local company compared to a national one. By working with an offshore team, your employees will have more time to focus on client relationships and intricacies, thereby increasing client retention.

Politics and a Single-Payer System

Any discussion about the future of medical billing would be incomplete without considering the potential implementation of a single-payer system. If a candidate is elected and decides to transition to a single-payer system, the industry will undergo significant changes. However, the likelihood of an abrupt transition is minimal. Even if the elected candidate prefers a single-payer system, a substantial amount of work would be required to facilitate such a transition. A more probable alternative would be an expansion of the existing Medicare and Medicaid systems, coupled with enhancements to the Affordable Care Act. Even in a single-payer system, the option for private insurance would still exist, and there would continue to be a need for billing private.