Easy Medical Billing

Why you should outsource your medical billing services to save money

Medical Billing Writer — Sat, 11 Jun 2011 20:30:59 +0000

With businesses looking to save money any way they can it might be time to consider outsourcing the medical billing you’ve been handling in-house. You might be apprehensive and that is understandable,but before you dismiss the idea consider the problems that doing it in-house presents and then consider the benefits of outsourcing it. We will start with the obvious issues of inpatient medical billing and then discuss things you may not have considered.

The problems with your own staff doing medical billing

It costs a lot to have a medical billing expert on your staff:

The average national salary for a medical billing specialist is $31,700.00 (assuming fully trained with 1-4 years experience). Other resources, such as Salary.com have similar information with just $100.00 difference. Salary.com says the average medical billing clerk’s salary is 31,800.00 per year.

You might be thinking that $31,700 to 31,800 really isn’t a lot of money and by itself it isn’t. However you also need to consider the other costs related to having another body on your staff.
- Benefits -
  
  While there are still companies out there that offer no benefits (or very poor benefits) to their employees yours is not one of them. Is it? I’m sure you offer a comprehensive affordable plan that is beneficial to all parties involved. But why incur more costs to provide additional benefits to people you don’t need to?
- Unemployment insurance -
  Anytime some works for you as an employee you have to pay unemployment insurance. Having collected my fair share of unemployment benefits in the past I have no problem with the concept however a job like medical billing that doesn’t require an employee makes paying unemployment insurance an unnecessary cost.
- Employment taxes -
  This category is things like workman’s compensation insurance, payroll taxes, retirement benefits, paid leave and other things of that nature. A report released on June 8, 2011 by the Bureau of Labor Statistics says that the average employee costs an employer $40.54 between state and federal taxes. Out of pocket a private company will pay approximately $7.00 per employee, per hour worked. Let’s say you have two medical billing specialists who work on your staff and further we will assume they work a full 40 hour work week.
```
40 (hours per week) * 2(employees) = 80 hours
80 hours * $7 (out of pocket expense per employee) = $560 per week
$560 per week * 50 weeks a year (assuming 2 weeks vacation) = 28,000.00
per year
```
  $28,000.00 per year is how much those 2 $31,700 medical billing clerks are costing your business in addition to their base salaries. Now instead of paying $31,700 per year per specialist you are actually paying $45,700 per year per employee. The math looks like this:
```
31,700.00 (average yearly salary) + 14,000 (yearly cost to the
business) = $45,700 (total cost per employee)

45,700 * 2 (assuming two medical billing specialists) = $91,400
per year total cost
```
  Those numbers are in addition to the benefits you provide and the unemployment insurance the government expects you to pay. As you can see having more bodies filling the seats at your office can cost significantly more than it appears at first.
Other costs you should consider:

In addition to the costs mentioned above did you consider how much it costs to have another body in your office? The equipment and supplies they use to do their jobs (computers, printers, copiers, scanners, faxes, pens, pencils, paper, etc) adds up rapidly. Let’s take a look at what the average office worker costs in terms of equipment and supplies.
- Computer -
  
  Assume that a computer will run around $400 to $500. Further assume that specialized medical billing software will run you over $1000 per computer it is installed on. Then you need to calculate the cost of the electricity to run the computer and the software on it. Plus the monitor. It doesn’t seem like a lot but take a look at how the math breaks down:
```
Computer cost $400
Software cost $1000
Total cost $1,400

Daily power consumption for computer: 2.5 kWh (24 hour period)
* 30 (days per month)  = 75 kWh per month
Average cost per kWh: 0.11 cents * 75 (usage per month) = $8.25
(cost per month of operating a computer without the monitor)
Cost per year to operate computer: $8.25 * 12 = $99

Daily power consumption for 20" lcd monitor: 0.30 kWh (24 hour period) *
30 (days per month) = 9 kWh per month

Average cost per kWh: 0.11 cents * 9 (usage per month) = 0.99 cents
(cost per day to operate monitor)

Cost per year to operate monitor: 0.99 cents * 12 =
$11.88 per year to operate monitor.

Cost per year for monitor and computer:
$11.88 + 99.00 = $110.88
```
  You might think to yourself that 110.88 is pretty cheap, and it is but this is assuming that the computer has no issues which require technical support. When you get people who service computers involved your cost per machine goes up significantly.
- Printer, fax, scanner and copier -
  
  For the purpose of this information I am going to assume that the billing specialist has their own desktop all-in-one setup. I’m also going to assume that their MFP (multifunction printer) is a mid level piece of equipment.
```
MFP Cost: $400
Ink cost: $150 every 3 months * 4 (total purchases
of ink during the year) = $600 per year

Paper costs: $50 per case (10 reams, 5,000 sheets) *
5 (how many cases a medical billing specialist will go
through per year) = $250

Total MFP cost per year: $600 (ink) +
$250 (paper) = $850 per year
```
  In this example I didn’t include numbers for electrical cost of operation. You also have to figure on something going wrong with the equipment that requires a technical support specialist to intervene.
- Miscellaneous items -
  
  This includes the pens, pencils, paper clips, staples and all the rest of the things that are on the average office workers desk. And they add up. If they didn’t you wouldn’t have a policy stating that employees are not to walk out of the office with those things.
The bottom line
As you can see having a medical billing specialist on your staff costs significantly more than it appears at first. By outsourcing to a 1099 contractor you can save a great deal of money. Granted their base pay will be more but it should still be a huge savings for your clinic.

3 awesome reasons to start a medical billing practice out of your home today

Medical Billing Writer — Wed, 17 Mar 2010 12:09:04 +0000

There’s no better time than today to begin planning how to start a medical billing practice working from your home. Starting your own business can be a daunting task, but if you have the passion medical billing is a great choice. Here are three reasons to do it now!

#1) Home based medical billing is sustainable

As health care costs continue to climb the insurance companies that take on the majority of the financial burden are becoming more and more interested in exactly what is being billing and to whom. This trend isn’t going to change. A medical billing agent that understands this and is able to give the insurance companies the information they need is a great assest to the doctors they work for.

#2) Home based medical billing is cost effective

From a doctor’s or medical facilities perspective having a medical billing agent that works out of their own home can be a Godsend. This is true because you as a medical billing agent won’t be taking up space at the doctor’s office, won’t be using their supplies or their materials. From your perspective as the biller it makes sense because you can write off work space on your taxes. You don’t have to commute on a daily basis. You can eat the food in your refrigerator instead of eating out all the time.

#3) Home based medical billing allows more time with family and friends

When you work from home you have more time to spend with those who are important to you. While your friends won’t come to your work and sit and visit with you for hours they probably won’t hesitate to do so at your home. This is great, but you need to be sure to draw clear boundaries and let them know if it just isn’t a good time to be there.

We could go on and on about why you should start a medical billing practice out of your home, but this should give you some motivation to get started.

What is inpatient medical coding?

Medical Billing Writer — Thu, 20 Aug 2009 04:17:32 +0000

Large hospitals employ medical coders who do inpatient medical coding. Their job is to accurately code procedures, diagnoses, and treatments patients receive in order to submit that information to health insurance companies so their employers are properly paid for the services they provide. When a person first enters the field of medical coding they will
often start out as an outpatient medical coder. This just means that the medical coding they handle is for people who do not stay overnight in the hospital or who are seen at an outpatient clinic. Most people who seek a position as an inpatient medical coder must learn the skill over time through both classroom and on the job training because of the more advanced nature of the work.

Over the years as medicine has advanced and more and more patients are seen on an out-care basis there has been a decline in the need for medical coding for inpatients. For example gall bladder surgery used to require and 3 day stay in the hospital but now most people are sent home shortly after the procedure is completed. Because they did not stay overnight at the hospital their case is assigned to an outpatient medical coder. On the other hand open heart surgery requires inpatient medical coding.

The major difference between inpatient and outpatient medical coding is the complexity of the situations that they must code. Someone who needs stitches in their hand is a lot less coding work than someone who has multiple traumatic injuries sustained in a car wreck. Because there is so much more coding work to do, and it must all be accurate, for a patient with inpatient care needs the inpatient medical coding expert will have noticeably more expertise than their outpatient counterparts. It should be noted that hospitals employ both outpatient and inpatient medical coding workers because many hospitals visits do not require an overnight visit.