Choosing A Radiology Billing Company

Posted on April 2, 2018 in General

Whether you are already working with a billing company or you are searching for one to help improve your revenue cycle, there are various factors to take into account when choosing a radiology billing company.

The most important thing is to know what sets a good billing company apart from a bad billing company.

Red Flags for Billing Companies
In the perfect world, you’d be able to examine the books of all their clients and see how they are collecting from them. Since that’s not going to happen, you should be armed with the right points of consideration, including realistic clues they are capable and experienced, as well as knowing good questions to ask in the evaluation process.

Outsourcing

By far, employee costs are the largest expense for a billing company. The siren song of outsourcing overseas calls to many a billing company owner because the numbers look so good. You can get a FTE overseas for a fraction of what you can get one in the US.

These Business Process Outsourcing (BPO) companies are calling nearly every day trying to get you to sign up. Your competitors are doing it and lowering their pricing so there is pressure there as well. The problem is the quality.

Related: Why Dexios Doesn’t Outsource Billing or Coding

The bottom-line is how much quality are you willing to sacrifice for price?

One too many billing companies have gone this path and the failure rates are high. There is an old saying, “you get what you pay for” and this is very true in this scenario. Billing companies have lost a volume of clients pursuing the BPO option. There is also an issue about sending Protected Health Information (PHI) to a country where no HIPAA laws exist.

Questions to ask:

Outside Investors

If the owners of a billing company aren’t being deluged with calls from BPO, they are being called by people looking to buy part or all of their company.

Medical billing is a good investment because the monthly income is very predictable, steady and returns are not greatly affected by the economy. In order for the private equity firm to want to purchase this asset, they have to believe it is underperforming. Most of the time that means they are looking for ways to cut costs (see Outsourcing above).

Outside investors are going to rightly expect their piece of the pie. Where is that coming from? All too often it comes at the expense of quality as pressures to reduce costs and increase profits cause management to cut corners.

Questions to ask:

Old Owners

If you see a billing company with older owner(s), you need to be thinking about what is going to happen in the not-too-distant future. Are they going to sell? Are they going to pass it down to someone? If they are passing it down to a child and is that child as qualified to run it? These are all fair questions to ask.

A company may be well-run and have a great reputation, but a change of ownership or management can change quality and results quickly. Know what you are signing up for especially if age of an owner is making this change inevitable. You don’t want to be left scrambling for a new billing company or passed off to a bad one.

Questions to ask:

Custom Software

Back in the 1970s and 1980s, a lot of billing companies developed their own software. It was not uncommon even for fairly small companies to have their own software offering.

Today, unless the billing company is very large like an AthenaHealth, it doesn’t make sense to have a custom software offering. Business brokers will tell you that the multiples of billing companies with custom software are lower. Why? Because it is expensive to maintain and nearly impossible to maintain state-of-the-art technology.

The smaller the billing company, the bigger the problem in this area.

Related: The Challenges of Radiology Billing for Small Groups

Little Knowledge of Your Specialty

It is surprising to me that even today some radiology groups and imaging centers choose billing companies with little or no expertise in their field. They use generic coders who may or may not have a passing understanding of their coding. They usually make this decision because they are local or they know the owner or they presented the lowest bid.

Questions to ask:

Improving the Performance of Radiology Billing Departments

Now that you’re aware of the warning signs, as well as what questions to ask, you know how to go about choosing an expert radiology billing company. If you have any more questions about what constitutes a good billing company, please reach out to us.

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