Medical Billing Outsourcing Market
The COVID-19 pandemic and struggle in hiring employees have increased medical billing outsourcing in the healthcare industry. Although recruiting the services of outside firms can be a better option, practices should be aware of some critical thoughts.
Staffing inadequacy, closures, quarantine, and employee virtualization have all conducted many practices to outsource billing services to a company that can take on the management and human resources weight. Medical billing outsourcing companies often charge a percentage of the income received, which can be cheaper than employing in-house billing personnel.
Medical billing outsourcing can be a sensible option in today’s environment. Outsourcing might help to reduce the additional cost of employee income. In terms of investments, the average employer pays $4,000 and 24 days on hiring a new employee, and the average expense of replacing an employee is between 16% and 20% of that employee’s salary.
Outsourcing can give more flexible talented employees to increase and decrease without additional cost and a massive workload on the organization. However, practices should be careful in which billing operations they outsource to make sure they can be worked on quickly and in a way that improves the grounded level.
As said, medical billing outsourcing is outsourcing the billing process of medical institutions or hospitals. It involves utilizing a third-party software application to process bills, file and follow up on medical insurance claims and gain correct payments for the services provided.
More Direct Collections From Patients
In recent years, medical billing organizations have had to change their collection practices in light of a rise in high-deductible medical plans that have increased patients’ medical care charges. So, in addition to presenting claims to insurance agencies, organizations frequently have to look for payment directly from patients.
Collecting money from patients is an entirely different situation requiring soft skills, provident communication, and established technology. The old ways of billing and collecting don’t work anymore. Much of the medical billing work used to happen after the appointment. Now, what happens before the meeting can be even more essential to prevent the later problems.
Medical billing outsourcing can limit practices’ capability to work out payment arrangements with financially secured patients. For example, a person with an outside billing company handling collections fails flexibility in fixing up payment plans with patients and the option of not take payment from poor patients. They don’t like outsourcing billing because they know that some patients’ environments and financial situations are not better.
Areas of Concern
Medical practices need to think about some crucial things when outsourcing medical billing. For example, they could be responsible for a billing company’s mistakes. With any salesperson relationship, there are risks. Even if infrequent, there can be security breaks and HIPAA breaches.
While violations of HIPAA privacy can happen with in-house billing, the risk is possibly greater and harder to manage when it outsources. Medical practices must get real-time documents from medical billing organizations. Monthly reporting is no more acceptable, but sadly, most RCM organizations can’t make real-time actionable marks that let the provider hold them accountable.
In addition, some billing companies outsource services to other countries, which causes slow-downs, problems with the timely filing of claims, and communication barriers.
The COVID-19 pandemic is waiting to have a hugely positive effect on market growth. Technology is one of the main factors in today’s medical care systems, including localized healthcare systems that existed earlier.
Therefore, the digital development speeds up by the COVID-19 pandemic is expected to impact the market studied crucially positively. This pandemic situation has thoroughly established the need for active action and the foundation of a robust, collective, scalable, and agile digital medical care framework.
As a result, many organizations are now building up a new pathway, like embrace digitization and outsourcing non-core aspects of their businesses, such as billing and accounts, which expect to increase the market growth.
Furthermore, a sudden shift toward digital billing was observed during this period, hoping to drive market growth. Moreover, consumer interest has increased remarkably regarding online bill payments since the pandemic, leading to a more significant market for medical billing outsourcing. However, it makes a non-core business operation for most medical care organizations.
Medical billing outsourcing services need to hire a medical billing service provider outside the practice to do all the billing work, often giving a fair percentage cut of the total income generated.
The worldwide medical billing outsourcing market is expected to reach USD 25.5 billion by 2028, growing at a CAGR of 12.2 percent between 2021 and 2028.
Medical Billing Outsourcing Market Report Highlights
- The outsourced segment accounted for the largest revenue share in 2020 and expect to witness a high CAGR attributed to the rising preference of hospitals, physician offices, and startups choose for outsourced medical billing services for free and easy claim management at low expense.
- In 2020, the front-end services sector led the market. However, the middle-end services section is assumed to register the most leading CAGR across the prediction period due to the growing demand for Revenue Cycle Management (RCM) services offering Electronic Health Records (EHR) software.
- Hospitals, possessing higher claim volumes, accounted for the largest revenue share in the market in 2020 and are estimated to maintain the authority even during the estimated years.
- In 2020, North America had the highest revenue share. It project to expand further as the U.S. has testified a change in the medical care system with the introduction of ICD-11 coding in 2019 and a requirement from the government to include the Electronic Medical Record (EMR) management system.
- Medical billing and Revenue Cycle Management (RCM) companies offer successful implementation of EMR at the practice level and assume to transform the market.
North America will expect to continue its lead over the forecast years. Becoming the highest market assigns high realization levels about outsourcing medical are technology services and the robust existence of well-known market players in the region.
The front-end section of the market contains the main functions of medical billing outsourcing and includes methods such as scheduling, preregistration, certification, qualification, insurance verification, and pre-approval. However, due to the entry of new market players and the growing understanding among medical care companies, middle-end services are expected to behold the fastest growth in the prophecy period.
End-users of the market are hospitals, clinic centers, and others. Because hospitals were the major consumers of such services due to high claim volume, the hospital category had the greatest revenue share of more than 44.0 percent in 2020.
In addition, the request for outsourcing is high in hospitals, as an alliance of hospitals further increased the problems of billing and repayment methods. At the same time, the physician office segment accounted for the second-largest revenue share in 2020 and is supposed to grow at the fastest rate over the prophecy period.
This growth is due to rising expenditure on medical care by small and medium-sized medical care anticipated providers, the growing importance of risk management, regulatory conformity, and complex technology and staffing requirements.
Several medical care providers in the U.S. depend on outsourcing companies to manage their billing processes, maximize operating margins and manage high-volume transactions. Moreover, as outsourcing companies are being standard worldwide, developing regions such as the Asia Pacific and Latin America are expected to register a promising CAGR through the prophecy period.
As the International Classification of Diseases-10th edition (ICD-10) has made the medical billing industry even more complex, the demand for revenue cycle management (RCM) has risen. Also, providers are selecting organizations that contribute the correct combination of RCM with electronic medical records (EMR) for improved patient outcomes.