In-House Versus Outsourced Billing for Anesthesia

Summary: It is not enough in this day and age for anesthesia groups to rely on a few staff and on the same processes. If they want to maximize reimbursement while staying compliant with ever-changing rules, anesthesia providers need to consider the value that a sophisticated billing operation can bring to their practice.

There is a natural human tendency to always think that the grass is greener on the other side of the fence. This is especially true with regard to the concept of billing and accounts receivable management. Many an anesthesia practice has migrated from an in-house billing operation to an outsourced option over the past few decades. Some large practices have even decided to bring their billing in house, a cumbersome process that involves setting up an office, hiring staff, finding a computer system and deciding how to manage it all. While there are definitely advantages to each approach there is no silver bullet. Effective anesthesia billing is a complex multidisciplinary activity where failure to manage all the variables appropriately can easily yield disappointing results. It is all too easy to underestimate the complexity of the task.

The first thing to note is that each anesthesia practice is unique. Location, payer mix, scope of services provided and staffing model all define the specific requirements of the operation. In our experience there are five critical aspects that must be carefully addressed if the operation is to be consistently cost effective in meeting the business requirements of the practice. It is important to remember that effective management is a constant juggling of resources to meet the needs of a dynamic business that is constantly being modified by a variety of market factors. We see them a

✔️People

✔️Process

✔️Technology

✔️Managing change

People

Hiring the right staff is an essential first step. Staff must be knowledgeable of payer guidelines and processes. They must understand the essential nature of anesthesia services and be able to interpret the arcane documentation conventions of an anesthesia record and the various other clinical documents generated by anesthesia and pain management providers. Identifying, hiring and retaining qualified coders is especially challenging in the current environment. An essential challenge of all billing operations is whether one should reward competence and productivity or loyalty to the practice. There is a specific art and science to determining appropriate compensation and benefits.

Processes

Interpreting an anesthesia record, coding it, calculating a charge and billing it to the patient's insurance all require some finesse, as the devil is in the details. Navigating the maze of arcane payer rules and regulations is no mean feat. One of the fundamental challenges is the reality that the way charges are calculated is not always how payers calculate payment. The 80/20 rule definitely applies to anesthesia billing: 20 percent of the charges generate 80 percent of the challenges and problems. Because the primary objective of the operation is to generate value for the practice, it is not obvious or intuitive what will yield the best results. Many think, for example, that calling patients with outstanding account balances is the best way to optimize performance. The reality is that nothing could be further from the truth. In this era of cell phones with caller ID, patients have become all too discriminating in the calls they actually answer.

Technology

Since the bulk of practice revenue comes from insurance payments, this has to be the primary focus of the operation. Technology is the key to this piece of the puzzle. While there are a number of software solutions that practices swear by, what might seem like a very appropriate solution today often proves not to be so appropriate tomorrow when new rules or policy changes impose yet another set of constraints on the operation. This explains why, as an organization, we have been refining and fine tuning our technology since our inception 40 years ago. First Anesthesia has become the backbone of the operation, the key to managing the complexity of rules and regulations and to enhancing the productivity of our staff. Technology is the Achilles heel that often leads practices to shut down their in-house billing offices. This is one aspect of the industry where size definitely matters. While the specific needs of each practice may be unique, the overall requirements are universal.

Managing Change

There are many challenges to in-house billing, which makes it less cost-effective and difficult to manage than out-sourced billing. In that environment, old school management thinking may feel that if something is not broken, don't mess with it. New school thinking holds that every process and operation can be made more efficient and more productive. This is our billing company's philosophy. We are constantly looking for rate-limiting steps and innovative solutions to enhance our effectiveness. A billing operation is not like a car where, once you buy it, you can simply step back and appreciate it. As technology changes, it must be upgraded and refined. This is especially true of computer technology. As new features and functions become available, they need to be integrated into the operation.

A familiar business strategy adage tells us that, very often, the beliefs and strategies that got us to where we are today will not get us to where we need to be tomorrow. The ultimate criterion needs to be cost. In light of the downward pressure on medical revenue, operations must always find ways to do more for less. This is one key area in which large, well-managed billing operations have a distinct advantage versus in-house billing. Organizations that do not recognize the need to evolve and change are destined to become outdated, inefficient, and obsolete. For more information contact us at info@anesthesiallc.com.