Coding and Billing
The most important practice management process in the physician office is the coding and billing process. Our firm has certified coders who help to maintain accuracy, which helps to reduce denials. When the claims are paid on the first pass, collecting money is much more successful. The billing process including A/R management has to be efficient and complete. We strive to unite the coding and billing process so that A/R days remain low as claims are paid at the first billing.
Why does outsourcing your billing make sense?
The decision to outsource your medical coding and billing will depend on several factors. Here we will attempt to evaluate the cost of hiring an in-house coder and compare that cost to the cost and benefits of utilizing an outside billing agency.
The following assumes that your practice employs a single coder earning $14 per hour, which comes to just over $29,000 per year.
In addition to the employee’s salary, we must also take into account things such as taxes, healthcare, materials, and supplies. Of course, none of this takes into account the cost associated with things, such as office space, utilities, and overtime.
Base Salary…………………………………………………………………………………………………………………….$39,000
Payroll Taxes……………………………………………………………………………………………………………………$1,836
Healthcare and Disability…………………………………………………………………………………………………… $3,400
Retirement Plan……………………………………………………………………………………………………………….. $864
Vacation and Sick Time………………………………………………………………………………………………………$2,616
Postage for Statements……………………………………………………………………………………………………….. $300
Clearinghouse Fees………………………………………………………………………………………………………….. $1,000
Computer Software/Hardware Maintenance…………………………………………………………………………… $2,500
Materials……………………………………………………………………………………………………………………….. $2,000
Combining salary, benefits, and basic needs, hiring a single in-house coder to handle your medical billing, conservatively, will cost $53,216 each year.
The cost of using an outside medical coding and billing company will depend on a variety of factors. Ampyss normally charges either a flat fee per transaction or charges a percentage of the amount the practice collects. Assume the practice has annual collections of $450,000 per year. We base this figure on a single doctor seeing 25-30 patients per day and having 2,500 patient visits per year, receiving an average reimbursement of $60 per visit.
If the billing company charges a rate of 7% then the annual cost to perform all of the medical billing and coding will be $31,500. This is a savings of $12,016 each year. While the monetary savings are significant, the real benefit to having outsourced billing is access to experts and increased compliance. When you utilize a service to handle your billing and coding needs, you are no longer subject to gaps in service due to vacations or sick time. You also have a team with the collective individual experiences and training available to process your claims in a timely, consistent, and efficient manner.