Medical Billing Companies Spill About Outsourcing Operations
A recent survey of medical billing companies shows a positive outlook on revenue cycle outsourcing, with many seeing payment collection as an opportunity.
- Nearly two-thirds of medical billing companies have a rising positive outlook about the current state of the revenue cycle outsourcing industry, according to a recent survey from Tebra.
The practice growth technology company recently surveyed 277 medical billing company owners, leaders, and team members serving independent practices and clinics in the US. The majority of respondents belonged to companies that serve less than ten practices and clinics.
Medical billers are optimistic about the future of the industry despite increased competition, healthcare consolidation, and other unfavorable macro forces. About 43 percent—up from 27 percent in 2018—reported outsourcing of medical billing as a significant opportunity to leverage technology to optimize services, reduce repetitive tasks, and boost revenue.
However, the survey showed that these small, US-based medical billing companies did not experience the same boost in demand as their offshore counterparts. The majority of companies (39 percent) acquired just one to five new customers since 2020.
The COVID-19 pandemic sparked greater interest in revenue cycle outsourcing, especially for medical billing, the survey report stated. However, the number of independent practices that closed since the start of the pandemic, coupled with the popularity of offshore medical billing outsourcers, likely contributed to slow customer acquisition for small, US-based medical billing companies.
About 43 percent of medical billing companies said the purchase of practices and clinics by larger entities is a significant risk to their business. Thirty percent also said providers leaving practices for retirement or larger health systems was a significant risk.
With almost half of medical billing companies saying they face a more competitive landscape and experience challenges finding new customers, there are areas of opportunity. One area is automation.
The survey found that less than a third (29 percent) of medical billing companies leverage automation, robotic process automation (RPA), HL7 integrations, and outsourcing to manage workflows. The finding suggests opportunities to streamline manual processes and alleviate pressures from ongoing staffing shortages.
Medical billing companies also identified patient collections as an opportunity. Thirty-eight percent of respondents stated that not collecting at the time of service is the biggest challenge to patient collections. Twenty-seven percent cited not having the proper insurance information on file.
Offering additional patient payment methods can increase revenue and reduce late payments, according to the survey. However, less than a third (31 percent) of medical billing companies accept digital wallets as a form of payment.
Medical billing companies are responding to the market, with more companies using multiple billing systems to serve more practices.
Medical billing outsourcing is a growing market, with an expected 16 percent CAGR after the COVID-19 pandemic. A 2022 report also showed that over one in five revenue cycle leaders that manage inpatient RCM services themselves have turned to outsourcing for some of their outpatient RCM services.
The COVID-19 pandemic has been a significant factor in this increase. During this period, a sudden shift toward digital billing prompted a greater shift to medical billing outsourcing.
“It is due to the expanding influence of technology in the healthcare business, which has traditionally relied on localized healthcare systems,” researchers at Future Market Insights reported. “The pandemic has accelerated market growth by accelerating digital development in a variety of industries, including healthcare.”
However, providers have reported issues with price and company reputation. Meanwhile, experience with an EHR vendor, expertise, and relationship are motivating factors when it came to revenue cycle outsourcing selections, they say.
