2023 Medical Billing Software Buyer's Guide
As practices grow and the number of patients increases, it becomes critical to streamline processes and achieve a good first-pass resolution rate.
Any medical practice that sees more than 10 to 20 patients a day and does not have an electronic medical billing solution in place is likely to be losing a fair amount of its revenue to unpaid claims.
Regulatory provisions are becoming more and more complex, insurance companies update rules and criteria for medical coverage frequently, and claims are being denied regularly. Medical bills now go through a complete cycle: from e-claim creation, to electronic submission, and successive denials and re-submissions, until the bill is finally paid.
A simple medical billing software is sometimes not sufficient: practices need to manage this entire cycle to increase payments and revenue. Depending on their needs and requirements, they have a few options: medical billing software solutions handle claim management and billing; Revenue Cycle Management (RCM) systems focus on the entire lifecycle of a practice’s revenue and are far more comprehensive.
This guide will illustrate the value of medical billing software solutions, provide insight into the benefits you can achieve in your practice by using a streamlined, compliant billing system in-house, and offer helpful guidelines on how to choose the best medical billing software for your business.
What is the Difference Between Medical Billing Software and Revenue Cycle Management (RCM) Software?
Small practices often opt for a stand-alone medical billing or RCM solution. These are often online or web-based, and very easy to acquire and use. No complex servers or databases need to be set up and managed. Payment generally is based on a percentage of collections: if no money is collected on a bill, the service provider does not get paid.
Large practices tend to acquire software solution packages that include medical billing, practice management and EHR/EMR. Two deployment options are available: on-premise solutions are purchased outright, generating a higher up-front cost and smaller recurring costs (maintenance and upgrades). Web-based solutions are more flexible; payment is sometimes calculated on a per-provider, per-month basis, or as a percentage of received payments.
Creating and managing the entire payment course of a medical bill is a multi-step process. These steps form the essential features that all medical billing solutions must have to be able to get a high first-pass claim acceptance rate. While almost all solutions will demonstrate these steps, the key lies in how well they are implemented.
What is the Difference Between Medical Billing Stand Alone Software and Full Practice Management Suites?
Historically, medical practice software fell into a few different categories: Practice Management, Electronic Health Records (EHR), and Medical Billing Software. While many software vendors still offer point solutions that practices can implement separately and integrate into all their other systems, there’s been a shift toward all-in-one solutions. Many practices, even small ones, are choosing to implement software systems that offer all the tools they need for administration, billing, and secure electronic health records storage.
As a result, most of the leading Practice Management software vendors now offer completely integrated software systems that include tools for practice management, secure and compliant health record storage, and billing all in one easily accessible system. Depending on the size and needs of your practice, this may be the best solution overall for most practices, but it’s best to understand exactly what is offered in the solution you choose.
What are the Key Features and Capabilities of Medical Billing Software?
Medical Billing software systems offer an array of different features and capabilities you can customize to your practice’s needs. In general, though, your medical billing solution should offer these key features.
Patient Registration and Insurance Eligibility Check
While many eligibility checking tools are built into practice management solutions, every practice must have a means of checking insurance eligibility before the patient encounter begins. If the patient's insurance plan does not cover the requested services, the patient needs to be told upfront that they will need to cover the bill. The solution must also check during registration whether there are any outstanding bills the patient needs to clear.
As the patient is seen by the physician, a superbill is created - either on paper or electronically. This is transferred to the medical biller, which creates a claim and checks for a number of potential errors. Good medical billing solutions will sometimes use millions of rules to check that the claim meets the requirements of various insurers. Some solutions update their list of possible errors every time an insurer denies a bill, and so create a huge knowledge base of errors to check for. Naturally, these solutions will get better as their library of errors grows. Billing agencies also need to follow HIPAA guidelines; ensuring this is critical.
HIPAA guidelines require that all practices transmit their claims electronically. Manual claims are permitted under some special circumstances. Check that both methods are possible.
Use of Clearinghouses
In some cases, billers can send claims directly to a paying agency such as Medicaid or Medicare. In others, the claim is sent to a clearinghouse, which in turn sends it to the insurance after ensuring that it is in the correct format, as demanded by different agencies. In many cases, using a clearinghouse can help improve the first-pass claim ratio.
Your billing solution must be able to follow up on individual claims to track their progress with the insurer. In case of undue delay, a query should be raised or the claim must be resubmitted.
Claims can be accepted, rejected or denied. In case of rejection, often caused by an error in the bill, the solution must support claim correction and resubmission. Efficient solutions will go through that process within a day. In case of denial (the insurer refuses to process the claim due to the medical procedure not being covered in the policy or due to a pre-existing condition), appeals are filed. The solution must support all these actions.
Even when claims are approved, insurance will only pay the amount that is specified in the policy. The remaining amount can be recovered from a secondary insurance (if the patient has one) or from the patient. The software must be capable of handling this process.
Patient Statements Creation
Depending on how much the insurance company has paid, a statement is created and forwarded to the patient so that the balance can be recovered. The software must automatically reconcile payments received. Depending on patient preferences, it should send statements to patients by email or post.
Statement Follow-up and Collections
It is important that bills sent to patients are properly tracked and that the billing solution generates reminders and sends follow-up bills. When a bill is overdue beyond a certain point, a collection agency may have to become involved. Your practice should be able to customize these actions and decide how many reminders are to be sent, what the messaging should be, and when a collection agency takes over.
While most medical billing solutions offer similar features, there can be wide disparities in their reporting capabilities. Reporting features are capital to good revenue management processes: practice administrators must know how their practice is doing. Any reports that the solution provides should be completely customizable without requiring any advanced programming knowledge.
Below is a list of the most critical reports:
- Accounts Receivable: this report indicates the number of days accounts have been unpaid. Ideally, all claims and bills must be cleared within 45 days, but you should be able to set this figure. The software must red-flag any claims pending beyond this point.
- Key Performance Indicators: KPI reports track the following over a specified period (weekly / monthly etc.): total charges, collections, adjustments, and patient encounters.
- Carrier and Insurance Analysis: these reports give insights into the top insurance companies paying your practice, accounts receivable per company, rates different insurance companies pay you for the same procedure, etc.
Users should be able to email reports, export to MS Excel or PDF files, and drill down to individual items or data points. Report generation and sharing should also be restricted to specified users only.
What are the Benefits of Medical Billing Software?
Medical billing software is revolutionizing how medical practices process and track claims and provides powerful tools to make billing a much more efficient process. When your practice runs with efficiency and your billing is smooth and streamlined, your practice will be able to see more patients and generate more revenue much faster.
Medical billing software offers these great benefits for all types of practices, small and large.
Minimize Paperwork, Manual Work, and Errors
Paperwork is becoming more and more antiquated in the medical field, and even smaller practices are opting for a better, more efficient way of handling billing and claims while reducing the amount of paper and physical forms that are needed in a modern practice.
Medical billing software helps to dramatically reduce paperwork and the errors that come along with filling in forms manually and storing those documents securely. With a medical billing solution in place, you can virtually eliminate paperwork in your practice.
Make Patient Information More Accessible
Using a medical billing software gives you better control of your patient billing data and makes that information much more accessible for your practice. Accessible information, that is also accurate and secure, will help you work much more efficiently and process your payments much faster.
Improve Claim Tracking
Medical billing software helps substantially in tracking and processing claims. The software can help you check patient coverage and alerts you to denied claims and guides you through the process and timeframes required for resubmissions.
Medical billing solutions will also alert you to coding errors or inconsistencies in a patient’s file that could lead to a rejected claim from the insurance company. Overall, medical billing systems help increase data accuracy and speed up the claims process so you can get paid quickly and provide accurate bills for your patients.
Enhance Financial Reporting
Real-time reporting is an integral part of a robust medical billing system or full suite of practice management tools, and it can help you measure and demonstrate meaningful use of patient health records. You can also use reports to monitor the performance of your practice or clinic to find ways to improve the patient experience and increase efficiency. You can also access payment reports and do a deeper analysis on claims and your practice’s profitability (and where your biggest losses are as well).
ICD (International Classification of Diseases) coding is in it’s tenth revision (ICD-10), and is steadily being adopted as the standard, shared system of coding for physicians and medical professionals. A standardized set of medical codes helps streamline the coding process and ensures efficiencies in individual practices. On a larger scale, this classification system allows for the creation of a comprehensive database of codes that signify particular diseases or courses of treatment.
While it’s still in the early phases, AI technology is being used to streamline and automate coding and charting. AI can scan medical documents and pull out important details for coding and billing purposes. Automating the coding process helps save time and can also reduce data entry errors to keep records updated accurately.
Improve Patient Care with Payment Ease
The patient experience is moving swiftly to the forefront of medical practice priorities. As in retail or other industries serving customers, the modern medical practice is paying more attention to patient care and long-term retention in a competitive filed by providing excellent care and a seamless experience.
A huge part of providing a seamless experience for patients comes down to payment convenience. Patients want more online and electronic payment options, as well as patient portals that help them understand their benefits and bills they need to pay for their care.
What are the Differences Between Outsourced Medical Billing and In-House Medical Billing?
Medical practices have the option to generate and handle their bills in-house, or to opt for a third-party billing service. Many small practices that have limited staff opt to outsource their billing to a third-party medical billing service provider.
However, many practices are not keen to outsourcing medical billing because they don’t want to relinquish control of their medical billing or disclose revenue to a third-party. The medical billing software solutions available on the market today make it possible for medical professionals to easily manage all the components of billing internally, from claims and billing to online payments and interactive patient portal.
As a result, we’re witnessing a shift in how practices approach billing, and more and more are embracing cloud-based medical billing tools. If you select a reputable service provider, the security and privacy of your data will be protected, and the service will help you manage your billing in-house with ease.
How to Choose the Best Medical Billing Software
When researching and purchasing a medical billing solution, the key considerations are:
- Establish a specific list of required features and billing capabilities you can use to compare vendors accordingly.
- Make sure the solution can handle your kind of practice and/or specialty.
- Check for ease of use, and robust and efficient billing options and claims tools
- Look carefully at reporting features: the tool should help you boost the practice’s performance across functions.
- Confirm compliance and security.
- Make sure enough support and training are provided by the vendor.
- Decide which deployment best fits your practice’s operations.
- Validate the vendor's reputation: you are looking for a partner who will work hard to make your solution a success.
A good medical billing software solution, well implemented, will make a major difference to your revenue in just a few months.