Pros & Cons of Outsourced Billing for Orthopedics

Pros & Cons of Outsourced Billing for Orthopedics

Voncil Webb

Voncil Webb

Revenue Cycle Manager, Subject Matter Expert

Whether in-house or on an outsourced team, the right talent makes a difference

For orthopedics offices and orthopedic surgeries, aggressive revenue cycle management is a big factor in financial success. With complex clinical needs and equally complex billing claims, it’s important to make sure revenue doesn’t slip through the cracks. 

A billing team that understands the nuances of orthopedics is absolutely essential. But should you build that team in house to rely on external talent? 

Outsourced billing can be the best choice you make for your bottom line, or it can be a nightmare. Especially in orthopedics, it’s important to think carefully about the pros and cons.

Cons of Outsourced Billing for Orthopedics

Let’s start with potential cons. 

  • Less control
  • Less visibility
  • Higher risk

When I was an in-house billing manager for an orthopedic surgery center, I’ll be honest: my hesitation about outsourced billing was that I had less control.

I knew the needs of my center like the back of my hand. And, talent management was my sweet spot. I knew that I could lead an in-house team to success, and I had the resources to do so. But that isn’t the case for most private practices.

Orthopedics is a complex specialty and clinical details make a big difference. Your billing team, in-house or outsourced, needs to know those details inside and out. I wanted to be completely sure that my team understood:

  • How to properly document and code complex open and arthroscopic procedures
  • The proper units and anatomical categories for foot procedures
  • Accurate spinal regions
  • How to code the different components of a hip or knee replacement
  • How to report implants
  • And so on

Because orthopedic coding requires such intricate content, knowledge of payer trends and payer policy is key. 

With outsourced billing partners, you’re no longer directly responsible for training and day-to-day supervision to ensure that those details are current, nor are you responsible for staff incentives and retention. Whether or not that is a con depends on your own strengths and on how much you trust your outsourced billing partner. In some cases, delegating some of that responsibility to an experienced outside team can actually be a pro — just make sure you find a billing partner whose standard and values mirror your own.

Here’s another potential con: Many billing providers give only high-level insights into the status of your account. If monthly reports are only surface level, it can be harder to identify bad habits or consistent errors that could be costing your practice over time. Gentem is an exception: we offer your practice a live dashboard with summary data and individual claim level detail. 

This allows you to see everything from how much your clinic has earned over any time period to how an individual claim was coded, and everything in between. 

With all your data at your fingertips, your in-house billing manager is able to stay in control of the financial details. Our partners have the same visibility they would have if the RCM team was in their office, thereby minimizing risk.

That brings us to the biggest potential con, which is, simply put, risk. The quality of outsourced billing providers varies dramatically. When outsourcing, it’s important to do your due diligence and find a provider that will push for every dollar your practice deserves.

When considering an outsourced company there is one simple question you can ask that will be incredibly revealing: How can we hold you accountable? You should get a clear answer, along with deep expertise and a genuine concern for your business.

The flip side of risk, of course, is reward. The payoff of finding a quality billing partner can be high, particularly if you need to staff up quickly to meet upcoming needs. That brings us to the pros.

Pros of Outsourced Billing for Orthopedics

Great outsourced billing partners do exist: the trick is to find a group with the level of orthopedic-specific expertise to provide excellent support for your orthopedics practice or orthopedic surgery center. If you can find the right fit, an external billing partner can offer significant advantages.

The pros of a great billing partner:

  • Vast talent pool and expertise
  • Cost effective
  • Able to scale (with larger billing partners)
  • Reliant source to trust your day to day back office processes to
  • An extension of your practice 
  • Improved KPIs
  • Increased revenue flow

     

One of the biggest pros is the ability to access talent that is otherwise unavailable. Because orthopedic billing is quite nuanced, coders need specialty-specific credentials like the Certified Orthopaedic Surgery Coder certification. This is a non-negotiable. It’s also important to find revenue cycle managers with years of experience in the specialty so you don’t leak revenue as they learn on the job. 

Once the credentials are nailed down, you can access a much larger talent pool. That may be an especially big pro if your practice is in a smaller market where the talent pool is thin. Some local, in-house candidates simply lack the orthopedic certifications and experience you need.

Additionally, outsourcing done well is incredibly cost effective. That’s because you’re paying a small percentage of revenue rather than a fixed amount. You can access a number of certified coders as needed for the same budget it would take to hire one additional FTE. I love managing teams, but I’d choose an external billing company I knew I could trust in a heartbeat over an in-house team stretched too thin to succeed.

One last pro: larger external billing partners (as opposed to a one or two person shop) are a good option when you need to scale up your team or cover staff transitions. Adding temporary staff is especially important in cleaning up old accounts receivable, for example. Aging AR is time sensitive: if you don’t have bandwidth to go through claims quickly, you miss deadlines and leave money on the table. Large orthopedics practices and surgery centers with lots of aging AR benefit from a billing partner who can flex with their account.

Is Outsourcing Right for Your Orthopedics Practice?

As you think through outsourcing your billing, consider your:

  • Internal capacity
  • Hiring budget
  • Talent pool
  • Old AR that may require specific support

As you think through outsourcing your billing and what team you want to use, gather a comprehensive list of factors that help you make a choice that moves the revenue needle for your practice.

Of course, the overall ROI of outsourcing your billing will depend on the skill of your outsourced team. If you are evaluating providers, make sure you know what you need and how to find it!

Next up:
what to look for in orthopedics billing talent and how to evaluate outsourced billing partners for orthopedics.

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