Wednesday, June 1, 2016

Is your In-house Pathology Billing Delivering what you need?


You must have been stumped often by the question “should you outsource your pathology billing to a third party vendor or do it in-house?” This question often arises when the in-house billing performance is as professional as desired, and the costs too may be prohibitive. Most physicians and clinics have only heard about outsourcing options, though they may not have in-depth knowledge about how it works. They may also have concerns about quality and turnaround time.

How does one go about making a decision, and which is the best methodology to choose?  Instead of thinking which is best, you need to think more specifically, like which is the best for your practice in the current scenario and in future as well as far as the pathology billing is concerned. Before you can decide to outsource or make any changes to the pathology billing structure, you need to establish whether the performance lives up to the industry standards, or is way below the industry benchmark. Remember that any sudden changes can have a drastic effect on short term cash flows.

Though the oft repeated adage “no one can collect our money as we can” is true, the question whether in-house pathology billing is delivering what is required persists.  In case performance is at par with industry standards or above, you should probably stick to in-house pathology billing as it delivers what you need, on the other hand you need to consider the cost factor as well. If the costs are too high, the very purpose is defeated, as your profits are reduced drastically. In order to cut on costs, you need to first locate a vendor whose rates are quite competitive, and you need to also worry about quality and turnaround time.

While doing your due diligence, you may be shocked to learn that your idea of billing and that of your vendor’s don’t exactly match. Even before you can consider the price angle, you need to settle on the scope of services that are going to be rendered. You need to deeply analyze pathology billing functions like payor credentialing, physician coding, collection agency, contract analysis of payor, charge capture, and compliance to name a few. Go through your financials and check how much you are currently spending on in-house billing and try to arrive at price analysis for each functional area.

You will notice that in pathology billing the production intensive areas are charge entry and payment posting, and if yours is a large organization you can do with some efficiency. Else, you need to explore the possibilities of outsourcing your billing to a vendor with matching resources. It has been established that patient statement mailing, claims processing and self pay collections can work out cheaper only if outsourced and cannot be as competitive if processed in-house.


Where volumes make a difference, some functions can be kept at lowest of costs, thus proving to be beneficial for practices. Your in-house pathology billing can deliver what you need only when you have a billing expert who can manage the operation efficiently. The person can double as a practice administrator, though you may need to hire a billing manager to look after the day-to-day operations. Staff selection and training can be a cumbersome affair, not to mention the costs involved for setting up an efficient in-house pathology billing system. Hence, the benefits of outsourcing probably outweigh the convenience of in-house pathology billing in the long term perspective.