Offshore outsourcing
Outsourcing firms have been moving abroad, where costs are lower. Typical venues are India and the Philippines because there are larger percentages of people who speak English. Since 2020, demand at offshore medical billing companies has been growing faster than their domestic counterparts, according to a recent analysis.
The difference in price can be substantial. In 2020, the average salary for scribes in India was $500 a month, compared with $2,500 for scribes in the United States.
However, offshore outsourcing is starting to face limitations in some places because of privacy issues, according to David J. Zetter, a practice management consultant in Mechanicsburg, Pa. He pointed to a new Florida law that limits use of offshore vendors because they deal with confidential patient information. The law, which became effective July 1, requires that any protected health information must be maintained in the United States or Canada.
“This will make it very hard for many types of offshore vendors to operate in Florida,” he said. He noted that Florida is the only state with such a restriction, but similar proposals are under consideration in a few other states, such as Texas.
How to select the right company
Mr. Zetter said that the biggest mistake practices make when choosing a company is failing to take enough time to examine their choice. “Quite often, practices don’t validate that companies know what they are doing,” he said. “They get a recommendation and go with it.”
“Choose a company with experience in your specialty,” Mr. Zetter advised. “Speak with the company’s clients, not just the ones the company gives you to speak to. You should ask for the full list of clients and speak to all of them.”
Ms. Deabler said that it’s fairly easy to find respected outsourcing companies. “Colleagues can make recommendations, state and specialty societies can provide lists of preferred vendors, and you can visit vendors’ booths at medical conferences,” she said. She added that it’s also easy to find evaluations of each company. “You can Google the company and come up with all kinds of information about it,” she said.
Mr. Shay said that practices should make sure they understand the terms of the contract with a VA. “Depending on how the contract is worded, you may be stuck with the relationship for many years,” he said. “Before you sign an outsourcing contract, you need to make sure it has a reasonable termination provision.”
Because vetting companies properly can require extensive work, Ms. Deabler said, the work can be given to an experienced practice management consultant. “The consultant can start with a cost-benefit analysis that will show you whether outsourcing would be worthwhile,” she said.
Working with outsource service providers
Mr. Holder said that doctors should keep track of what the outsourcer is doing rather than simply let them do their work. “For example, doctors should understand the billing codes they use most often, such as the five levels of evaluation and management codes, and not just blindly rely on the billing company to code and bill their work correctly,” he noted.
Ms. Deabler said that companies provide monthly reports on their work. “Doctors should be reading these reports and contacting the company if expectations aren’t met,” she said.
Even in the reports, companies can hide problems from untrained eyes, Mr. Holder said. “For example, anyone can meet a metric like days in accounts receivable simply by writing off any charge that isn’t paid after 90 days.”
“You need to be engaged with the outsourcer,” he said. “It’s also a good idea to bring in a consultant to periodically check an outsourcer’s work.”
Will outsourcing expand in the future?
Mr. Holder said that the increasing use of value-based care may require practices to rely more on outsourcing in the future. “For instance, if a practice has a value-based contract that requires providing behavioral health services to patients, it might make sense to outsource that work rather than hire psychologists in-house,” he said.
Practices rarely outsource clinical services, but Mr. Holder said that this may happen in the future: “Now that Medicare is paying less for telehealth, practices have to find a way to provide it without using expensive examining room space,” he said. “Some practices may decide to outsource telehealth instead.”
Mr. Shay said that there are many reasons why outsourcing has a strong future. “It allows you to concentrate on your clinical care, and it is a solution to problems with turnover of in-house staff,” he said. “It can also be more efficient because the service is presumably an expert in areas like billing and collections, which means it may be able to ensure more efficient and faster reimbursements. And if the work is outsourced overseas, you can save money through lower worker salaries.”
A version of this article first appeared on Medscape.com.