Billing for behavioral health practices can feel like a labyrinth. With different timelines and regulations for each payer, and a library of treatment codes to keep straight, it’s easy to get overwhelmed.
However, mental health billing is unavoidable for any provider who accepts insurance. Many providers turn to third-party services to manage their claims and revenue cycle, which frees up more time for the practice to focus on patients. Others hire dedicated in-house staff to keep the claims process running smoothly. Some solo practitioners handle billing themselves.
Which method is better, and how do you know if you need to change your billing model? That depends on your individual practice and goals. In-house billing can work well for clinics with knowledgeable staff who desire more control over the process, while outsourced billing can be a no-fuss fix for those who don’t have the time or resources to handle the work themselves.
Before you choose between in-house or outsourced billing, consider the pros and cons of each.
Billing for Behavioral Health In-House: Pros
Saving money is one primary advantage of in-house billing. You can’t get a third party to do your work for free, after all. These services typically charge a fee of 4-6 percent of revenue received through the claims process. If your practice has the bandwidth and the skill to manage claims and get paid your due, then an outside service may not be worth the cost.
Some practitioners prefer in-house EHR billing because it gives them more control over the process. When you handle your own claims, you can ensure they’re submitted well within payer deadlines and can follow up right away with aging or denied claims. You also have all billing information at your fingertips; you don’t have to request reports from someone else and wait for a response.
Keeping all billing strictly between yourself and your payers also reduces security concerns. You don’t have to evaluate the data security capabilities of a third party.
The Cons of In-House Billing
Despite the seeming simplicity and thrift of DIY billing, it can come with serious drawbacks.
First, your revenue is entirely dependent upon your billing and coding skills. If you aren’t prepared for the complexities, your bottom line will suffer. You or your staff will need the following skills:
- Coding appropriately for different treatment types, and using codes to maximize your revenue for each clinical encounter
- Monitoring the submissions deadlines and protocols of each payer
- Negotiating with insurance companies on denied claims to get your fair due
- Staying up-to-date with medical billing regulations, best practices, and trends
The learning curve for any one of these areas can be steep—and if you have questions, you won’t have a dedicated expert to guide you.
Even if you have the skills, do you have the time? Mental health billing requires approximately 10 work hours for every 40 hours spent treating patients. That means a practice of four full-time practitioners would need at least one staff member devoted solely to billing. Practitioners who work independently must fit their billing work around their time with clients, which may force them to either reduce their roster or put in overtime each week.
Finally, one major problem of in-house EHR billing is that you don’t know what you don’t know. Unless you have experience or training in this field, you may not anticipate and prepare for challenges that could affect your revenue.
Outsourced Billing for Behavioral Health Practices: Pros
Given the difficulties associated with in-house billing, many practices and providers choose to outsource these tasks. When done through a reputable and skilled third-party service, this can bring numerous benefits.
First, it gives you back your time. Your hired service will not only take on the tasks of filing claims, they will negotiate with payers regarding rejected claims, something that can eat up hours of time. Professional billers know how to make this process go faster.
Second, third-party services can actually make you more money in the long run—yes, even after their fee. Experienced billers and coders know how to code properly for every service delivered at a clinical encounter. Considering the number of patients the average behavioral health practice treats per week, even small increases in payment for individual sessions can add up fast.
Professional billers can also help you stay organized and make deadlines. If you or your in-house team struggle to submit or follow up with claims on time, handing it off to a competent third party can solve the problem. This is especially true for busy practitioners who simply don’t have time to pursue every claims denial.
Outsourced Billing: Cons
Outsourced mental health billing does have some drawbacks. For one thing, many companies that provide this service have high employee turnover. You may not have one consistent representative working with your account over a long period of time. If it’s important to you to build an ongoing relationship with a billing expert who knows your company well, you’ll have to vet any third-party services carefully for turnover rates.
Some providers dislike the loss of control that comes with outsourcing a major management function like billing. You won’t control how quickly bills are submitted and how often your agent follows up on them. When billing services don’t bill quickly or pursue stalled claims aggressively, they can end up costing you money.
This is why it’s important to meticulously vet all potential billing services. By asking questions about their process and speaking to other clients they’ve worked with, you can spot any red flags and decide if the downsides are likely to be worth the gains.
How do you know when it’s time to change your billing model?
Maybe you’ve been thinking about breaking up with your billing model for a long time, or maybe you’ve only recently begun to explore the possibility. How do you know when it’s time to make a switch?
You might consider changing your billing model if:
- Your practice is growing. As new providers come on board and your clientele expands, it may be difficult to stay ahead of billing. This could be an opportune moment to invest in a professional service or establish/expand your own dedicated staff.
- You’re struggling with rejected claims. Rejected claims are an unavoidable part of medical billing. But if you’re dealing with an excessive amount of claims denials, to the point that you can’t manage the process of resubmitting or appealing them, you need to find a model that will increase your rate of clean claims.
- You suspect your practice could make more money. Maybe you have a strong client roster but your revenue is barely cutting it. You may not be coding in a way that optimizes your revenue potential. Hiring a specialist can help.
- Your staff is burnt out. Sometimes, the demands of billing are too much for existing staff. It may be time to call in the cavalry in the form of an outside service.
- Your current biller doesn’t deliver good results. If your outsourced biller consistently misses claims deadlines, is difficult to get in touch with, or doesn’t provide you with robust reporting on your billing and revenue, you should either switch providers or establish your own staff of in-house professionals.
Valant takes the headache out of billing software
If you have billing woes, clunky software certainly doesn’t help. Opt for a smooth-flowing practice management/EHR system that makes claims creation easy and delivers the reporting features you need to stay on top of your revenue cycle.
Contact Valant today to find out how we can make EHR billing better for your practice.