The Bright Future Ahead for the Medical Billing Industry

As Founder and CEO of the nation’s largest network on independent medical billing companies, I have seen the future for the medical billing industry and it is bright!

medical billing industry

By Patrick Phillips, Founder/CEO of American Business Systems, LLC
Originally Published in BC Advantage Magazine, August-September, 2013

It’s true that there are a number of changes in the healthcare industry coming in the next few years that will be a challenge to those involved in the medical billing industry. But the opportunities for growth and profits outshines every challenge. Here’s why:

Doctors need to focus on patient care, not the business side of their practice.

With the influx of 30 million Americans who did not have insurance but now do (ACA), doctors and their staff are hard-pressed to manage the patient well-care and keep up with all the changes in coding and billing.

With hundreds of new patients, the doctor and her staff will need to spend their time caring for those new patients, not figuring out how to use new technology to get their money.

They will realize, at some point, that they are trying to run two businesses: the business of patient care and the business of billing and collections. The smart doctors will realize that it makes more sense to focus on their core competency, which is helping patients get well and leave the billing to experts who work with insurance companies and government agencies on a daily basis for multiple clients.

Trying to keep up with the advances in medicine and medical technology is challenging enough. Keeping up with new cloud-based practice management and electronic health record systems is something best left to those who specialize in this arena, not just for one practice, but for multiple practices.

Private practices are struggling to fight off acquisitions and mergers.

As more and more hospitals buy out private practices and larger practices merge with smaller practices, the doctor who wants to stay independent and run their own private practice are going to have to cut costs and be more efficient in building and maintaining their patient base.

These doctors don’t want to become employees of a hospital, nor do they want to limit their income or lose control of their workday and duties. Those who have given in to the pressure to be absorbed by the hospitals and large groups are realizing that they are no longer in control and do not wish to be told what to do, when to work and how much time they can spend with their patients or what procedures that can provide. A recent survey of 2,094 physicians who own their own practices found that 58% of solo practitioners are not looking to sell, according to the survey’s sponsors, CareCloud and QuantiaMD. They value their autonomy and long-term relationships with patients and want to maintain their practices.

Richard Fu, an Accenture strategy consultant, says “Independent practitioners can weather this change in market pressures by enhancing their value proposition to patients. They need to focus on the core, personal, attentive care provided to each patient while enhancing their practice with modern technologies expected from large companies.”

The only way some will be able to survive and stay independent is to turn the billing and collections over to an outside firm who can provide these services at a set percentage of the money actually collected. This is motivation that the doctor’s own staff does not have, since the billing company’s revenue is dependent on maximizing the collections for the practice.

The looming shortage of doctors will force practices to find time for seeing more patients.

The American Association of Medical Colleges estimates that by 2015 the shortage of doctors across all specialties will quadruple to more than 60,000. By 2025 that number will reach a staggering 130,000.

As mentioned earlier, I am pleased that 30 million Americans have health insurance for the first time. But health insurance is pretty useless if you can’t find a doctor to treat you and your family. What does this mean for those physicians who are in practice?

Simple: they must spend all their time focused on seeing and taking care of these additional patients. Period. There will be no time to spend on the “business side” of their practice, and they will need to outsource this side of their practice to specialists who keep up with the changes in the medical billing industry and who interact with insurance companies and Medicare and Medicaid on a regular basis.

This is why I recommend that billing company owners position themselves as Medical Reimbursement Specialists or Medical Revenue Consultants. They must be more than just “medical billers”. In today’s fast-changing world, they need to figure out how to provide more than just “claims filing” for medical providers. They need to transform their business in such as way as to be able to solve the entire cash-flow of a medical practice. They need to make alliances with providers of other revenue cycle solutions to plug the leaks in the practices’ cash-flow from start to finish.

Physicians are struggling to maintain their income and stay in practice.

A survey of 699 doctors by the Doctor Patient Medical Association asked doctors about their current financial situation. Two out of three responded they were “just squeaking by” or “in the red” financially.

In another survey by Deloitte Center for Health Solutions, 600 doctors found four in 10 doctors reported their take-home pay decreased from 2011 to 2012 and more than half said the pay cut was at least 10 per cent. 48% of all doctors believed their income would drop again in 2012 as a result of the health care law.

So, what does that mean for billing companies? It means your role in helping doctors manage their revenue cycle is even more important than ever. Every aspect of the revenue cycle should be examined to see if there are “leaks” and auxiliary services that can help with patient payments, collection of bad debt, a review of the codes being used, pre-audits for HIPAA and Medicare violations should be offered to the practice to insure maximum cash-flow.

If you are positioning yourself and your company to provide this type of help to physicians, you will not only help many practices stay independent and profitable, but you will insure that your company will prosper and grow and that you will have a bright future in the medical billing industry.

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