Many healthcare providers assume that in-house medical billing is a cheaper option as compared to outsourcing it to a medical billing agency. However, this is really not the case. If more corporations started to calculate the actual costs of having in-house medical billing then they would really know how much revenue they are “losing” annually, which could have been saved if medical billing was outsourced.
There’s no doubt that having in-house medical billing can be quite convenient as in case of any problem you can handle the issue easily due to close proximity and you can also have control over the financial operations. Nevertheless, you may need to pay higher costs and pay your absentee employees on the cost of the backlog of operations.
Therefore, it’s crucial for you to know how much you are truly paying for in-house medical billing to know if it’s worth it. This article will explain the different costs that you have to pay with in-house billing so you can have a rough estimate. Read on!
Salary and Wages
When you have all your billing operations in-house, you need to pay all your employees who are assigned different duties such as staff for follow-up, for sending out patient statements, balancing daily revenue, etc.
In addition to this, you will also need to consider the staff benefits. For instance, social security, health insurance, sick leave, and retirement plans. Some of the costs may be fixed, and you will have to pay your employees even if they are on leave. However, this can also cause a delay in your financial operations and problems with your cash flows.
If you want your revenue management cycle to be operated efficiently and smoothly, you need to invest in your employees. As rules and regulations in the healthcare industry keep changing, it’s vital for your employees to update their knowledge as well. Otherwise, you will have to deal with the loss of revenue.
However, if you outsource your medical billing, you don’t have to pay “extra” for the training costs as you are not responsible for it and this saves you plenty of money annually.
Office Equipment and Supplies
In-house medical billing can’t take place until or unless you don’t have resources for them in your workplace. So, it’s important to take into account the cost of office equipment such as desks, computers, phones, fax machines, etc.
With office equipment, you also need to facilitate your workers with supplies to work with during the billing process. For instance, envelopes, paper, postage, pens, etc.
Costs of Technology
In-house medical billing requires certain technology and software systems to help the workers do their job. For example, you not only have to pay the upfront costs of the Electronic Health Record system, Practice Management software, and other hardware but also upgrades, maintenance, and support. These costs can add up to thousands of dollars and even more.
You also need to consider the opportunity costs for your in-house medical billing. For instance, the extra rooms that your employees have occupied in your facility to do all the billing work while they could have been used by your patients or for examination rooms to generate additional revenue for you is an opportunity cost.
While totaling your in-house medical billing costs, communication costs are a must to be taken into account. These costs could be related to your workers using a landline phone or visiting your patients who are miles away for follow-ups.
Although this cost may seem minimal to you, if you start adding them up, you will see a rise in your overall expense.