Medical Billing Services Save Heatlhcare Practices Money and Time

There are many reasons healthcare practices might outsource their billing to a professional medical billing service; confusing insurance requirements, staffing problems and just keeping up with industry changes are a few examples. In the end though, the reasons most medical billing companies hear about come down to the two driving principles of any business – Time and Money. This article discusses how medical billing services are able to create significant savings in time and money for healthcare providers.

Medical Billing Services Save Training and Research Time
- Some readers might take the short view and think medical billing companies just enter data into a computer and send it off to a clearinghouse. In reality medical billing is a detailed process requiring specialized skills and in-depth knowledge of medical practice management, insurance industry practices, and the regulatory framework around state and federal laws. Professional medical billing companies invest countless hours in training and research to keep abreast of current codes, submission requirements, industry trends and the needs of their clients.

Significant expenditures are also made to ensure medical billing companies are up to date on the latest software. In a constantly changing industry, software vendors are always finding new and better ways of supporting practice needs. It’s not practicable for small or medium sized practices to dedicate the time necessary to stay on top of the latest innovations.

These investments of time by professional medical billing services are often not considered by providers, but they eliminate endless hours otherwise spent in seminars, meetings with vendors, or on the phone with clearinghouses and carriers. This time savings creates a valuable commodity for a practice seeking the edge necessary to keep up with a rigorous patient schedule.

Medical Billing Services Save Operational Time
-Medical billing services are able to save operational time by leveraging the economy of scale and the efficiency of task specialization.

Professional medical billing companies, by their very nature, create an economy of scale in maintaining a team of medical billing professionals to provide services across several practices. This structure creates a well trained pool of resources to manage each practice’s needs rather than just one individual overseeing all billing functions. The team approach also removes interruptions to revenue flow that result from vacations, unexpected sick time and staff turnover.

Task specialization among teams further heightens the efficiency of medical billing companies. Through task specialization, a team of billers can accentuates individual skills and reduces distractions of other activities.

Consider a provider who sees an average of 30 patients per day, or a total of 150 encounters per week. The time required to generate and submit 150 patient claims and follow up with insurance carriers with a high lever of accuracy can take up most of the time of an in-house biller. But this is just the beginning. That same individual will also need to follow up on denied or partially paid claims, researching why and resubmitting for further review. Patient invoices require additional time- printing, stuffing and mailing- as well as posting payments, running reports and providing detailed analysis on the current state of the practice; all this just to meet the standard offering of professional medical billing companies.

Through task specialization, medical billing companies might offer each of its clients several billers submitting claims and reviewing insurance payments with the highest level of accuracy. At the same time, the service might have other individuals or groups dedicated to managing patient invoices and questions across several practices with increased efficiency. This approach maximizes the time available for each activity by specialists with a greater knowledge of their roles, and, again, guarantees minimal (if any) interruption during employee leave and staff changes.

Medical Billing Services Save Money
-Hiring and training new staff, employee benefits, vacation/sick leave, and staff turnover are just a few factors increasing the costs of managing an efficient in-house billing program. Added to the operational overhead of day to day billing, software/hardware maintenance, clearinghouse fees, postage, and so on, the list of expenditures for practices is endless.

Good medical billing companies will design their services around covering all of these costs and immediately do away with the problems they create. To clearly demonstrate how medical billing services can save practices money, let’s compare the core costs associated with in-house medical billing against working with a professional medical billing service.

Cost of In-House Billing:
Our comparison begins with a typical practice with one or two providers. Let’s assume this practice has a dedicated, in-house biller receiving an annual salary of $30,000, or about $14.50 per hour. The chart below outlines the additional costs of having a full time employee in the office to handle all aspects of medical billing.

Base Pay ————————–$30,000
Medicare and Social Security ———$2295
401K ——————————–$1080
Disability —————————–$720
Healthcare ————————–$5220
Time off —————————–$3270
Total labor for 1 in-house biller ——$42,585
Next, we’ll need to consider materials and fees. An average practice will probably upgrade computers and software every 3 years at a cost of about $6,000. Spread out over those three years, we’ll assume an average annual software/hardware expenditure of $2000. Since our practice will send out its own patient statements, we’ll need about $150 per month for postage, paper and envelopes, an annual cost of $1800. Clearinghouse fees for electronic claims will come to about $60 a month, or around $720 annually. For the sake of simplicity, we’ll forget for the moment that our biller will need a climate controlled workspace, lights, general office supplies and a desk.
Here’s what our list of software/hardware, materials and fees looks like:

Software/Hardware —————–$2000
Materials —————————$1800
Clearinghouse Fees ——————$720
Total ——————————$4520
Adding the two totals above (labor + materials & fees), the annual cost of medical billing services performed in-house by the practice comes to $47,105 per year. Of course this number might not mean much until we put it in perspective against teaming with a professional medical billing service. As we move forward, keep in mind this conservative estimate does not factor in those other costs mentioned above that are often hidden – ongoing training, unexpected leave and sudden staff changes.
Cost of Professional Medical Billing Services:
To evaluate the cost of working with medical billing services, we’ll assume our practice has contracted with a medical billing company for full service billing. This includes all of those activities that would otherwise have been performed by the in-house staff above; claim generation/submission, insurance follow up, patient invoicing and support, detailed reporting, expert practice analysis, etc. We’ll also assume the practice has negotiated a rate of 8% of collections with its professional medical billing service.

Note: Calculating costs for medical billing services will vary slightly depending on the fee structure but will usually be based on either a percentage of collections or a fixed fee per claim. For more information on fee structures, see Percentage vs. Flat Fee Pricing by Medical Billing Services.

Assuming our provider visits 30 patients per day, 50 weeks out of the year, we’ll have 7500 patient encounters per year. If each encounter results in an average reimbursement of $60, our receivables come to a little over $450,000 per year. At a rate of 8%, the annual cost for the professional service to manage all aspects of medical billing services for the practice would be $31,500. In comparison with in-house services that’s a savings of $15,600 per year!

In evaluating the benefits of outsourcing to a professional medical billing company practices should consider the overall savings in time and money, beyond just minimizing the hassles. Medical billing companies provide knowledge, training, continuity of operations and a network of support leveraging task specialization and the economy of scale. Medical billing companies are able to eliminate dependency on one or two costly staff members to maintain revenue flow for the entire practice.

For more information on the benefits of outsourcing, contact Diversity Medical Billing Services []. Leverage maximum efficiency and economy through a well

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Georgia Business Personal Property Tax Planning Tips for 2013

Share this article on FacebookShare this article on TwitterShare this article on LinkedinShare this article on RedditShare this article on PinterestExpert Author Angelica Moss
Georgia Tax Assessors’ Offices usually mail the PT-50P or Georgia Business Personal Property Return during the first few weeks of the year. Many tax minimizing strategies for federal return purposes may actually increase business personal property tax exposure. Remember, there is no Section 179, bonus depreciation, or threshold for personal property assets. The following tips are not an exhaustive list, but rather a starting point for your business tax planning:

Tip #1: Know the business personal property valuation date and tax return due date for your Georgia county!

Property Valuation Date for ALL Georgia counties: January 1

Property Tax Due Date for ALL Georgia counties: April 1

Personal property taxes are assessed on January 1 of the current tax year for all applicable assets. The law provides that property tax returns must be filed with the county tax assessor or the county tax commissioner between January 1 and April 1 (O.C.G.A. 48-5-18).

Tip #2: File the Business Personal Property return by April 1 to avoid penalties on unreported assets!

A 10% penalty applies to the value of unreported property assets on late returns. For example, if a return is postmarked and received by the Assessors’ Office after April 1st, the penalty would apply to all assets that had not been previously reported-including current year assets. However, if a company has been in existence for years, but never filed a personal property return until April 1, 2013, all prior year assets (2011 and before) are subject to the 10% penalty despite the timely filing date. Only the 2012, or current year assets, would not be penalized in this example.

Tip #3: When mailing your return close to the April 1st deadline, do not use metered mail!

Avoid the 10% penalty on unreported assets by mailing your return at least one week before the due date through the U.S. Post Office, FedEx, or UPS. Ask for your envelope to be counter stamped by the U.S. Post Office as proof of a timely filed return. Most counties do not accept metered mail dates as official filing dates because it is relatively simple to back date the meter. There is also the option to hand-deliver the return to the Assessors’ Office. Make sure to receive a copy of the stamp dated return.

Tip #4: Again, timing is everything!

All property subject to taxation should be returned as provided by law (O.C.G.A. 48-5-10). File personal property returns for property held and owned as of January 1 (valuation date for all Georgia counties). If you are the property owner as of January 1, it does not matter if you sold the property on January 2. You are deemed the property owner for the entire year! There is no proration for business personal property taxes.

Tip #5: Time your fixed asset and inventory purchases wisely!

The property valuation date is January 1 for all Georgia counties. Consider purchasing assets on or after January 2 to defer reporting the property for one year. This may be contrary to standard federal tax advice about timing asset purchases before December 31.

Freebie: Perform due diligence before you purchase a business!

Taxes are assessed against the property owner if known OR against the property if the owner is unknown. The Assessors’ Office can treat as the owner any person that has possession of the assets when they are unable to attach ownership to anyone else. Possession is considered a mark of ownership.

While some of these tips may seem elementary, many businesses are penalized each year due to non-compliance. Take a proactive approach with business personal property tax planning and minimize your tax liability for 2013.

Angelica Moss, CPA is the principal of Equity Tax Consultants

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