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Financial Mangement

Medical billing evolves to meet new demands

Medical billing evolves to meet new demands

The most profound change affecting medical billing today is the increase in patient payment responsibility.1 Now ambulatory practices must meet the demands of two very different payer types:

  1. Health insurance companies and government agencies with stringent requirements
  2. Patients who want healthcare to be affordable in the context of their health plan, and expect the ease and convenience they've become accustomed to in a consumer-oriented economy

Medical practices must now meet divergent demands. Whether the payer is a health insurance company or government agency, considerable time and attention must be devoted to coding, reviewing charges, and tracking and reworking denied claims. When the patient becomes the payer, practices must first identify payment responsibility and then implement billing policies that meet consumer expectations.

Take advantage of available technology

Making sure medical coding is accurate remains a central medical billing task. The past decade has seen the evolution of technology that automates claims scrubbing. By taking full advantage of available technology, your practice can improve claims accuracy, reduce the administrative burden associated with rejections and denials, and free up physician time.

A rules engine, for example, can perform an automated review of medical codes and modifiers to ensure they meet guidelines issued by third-party payers. Throughout the revenue cycle, solutions based on rules-engine technology can capture and autocorrect claims data as well as generate medical coding.

Smaller practices may not be ready to invest in sophisticated rules engine technology. To optimize revenue, these practices need to dedicate staff and implement an effective model for managing medical billing. A variety of billing support options are now available to supplement office staff.

Consider the key factors

When selecting an external billing solution, consider a variety of factors. While cost is always part of the equation, also look at the value provided by the billing solution.

Below are some questions to ask when evaluating a potential billing team:

  • Are they proficient in the technology used by your practice?
  • Do they understand your medical specialty?
  • Do they have redundancy in their staffing, so your practice is covered during vacations or in case of illness?
  • Is the operation scalable for growth?

A practice today can seek outside support for a portion of its A/R, such as follow-up on denied claims and collections, or offload full A/R responsibility to a contracted service provider. A billing service that takes on full A/R responsibility is often paid a percentage of net collections.

Medical practices today have another option. Seek out the service of a full revenue cycle management provider—one that bundles billing services and claims-management support software, including rules engine technology, into a single contract. A company that provides full revenue cycle management may also be paid a percentage of net collections.

Shift your focus to the front office

Today, healthcare providers are pressured to earn more revenue directly from patients. However, the business side of medicine is not consumer-friendly, especially when compared to consumer-focused companies.

Patients commonly don't know what care will cost until their bill arrives in the mail. Insurance companies send out EOBs that are difficult to understand. The net result of this built-in ambiguity—longer revenue-collection cycles, higher costs-to-collect, and increased write-offs.

Physicians, nurses, and office staff may not be comfortable with discussing the cost of care. They may struggle with asking for payment during or after the office visit.

Consider instituting formal policies to help patients better understand their financial responsibility early on. Doing so can help improve revenue and increase overall patient satisfaction. Consider taking the following steps:

  • Establish pre-service processes that keep patients informed of their payment responsibility and meet expectations for transparency
  • Include patient cost estimation tools, eligibility verification, and prior authorizations as part of the pre-service process
  • Collect co-pays before providing services to increase the likelihood of payment

Studies estimate that practices miss out on 30% to 50% of patient revenue if it's not collected at the point of service. Implementing changes to improve upfront collections can significantly increase revenue.2

Go digital

Offer your patients the ease and convenience that fits with their busy lifestyles. Many, if not most, people—young and old—want to do business online. However, 77% of group practices still use paper-based billing.3

Implementing effective billing policies means meeting patients where they are—online. Adapting to meet this expectation can help your practice survive and grow.

Here are some tips for going digital with billing:

  • Send bills via email, and email or text payment reminders; doing so can result in a 40% boost in payments4
  • Offer patients an online payment portal with a link to pay online
  • Include a phone number, so patients can reach a live person to ask questions
  • Include an option to set up a payment plan online
  • Use clear language and branding to ensure patients don’t get confused about what they are paying for or who they are paying

Pay attention to dual demands

Medical billing remains at the heart of healthcare business survival and growth. Traditionally, the focus has been on processing and submitting claims, improving claims accuracy, reducing denials, and reworking denied claims. But the rise of the patient as consumer has introduced a more human element to the art of medical billing—consumer expectations must now be taken into account.

Medical practices need the right tools and processes to implement billing policies and procedures that fit a new, more complex era. NextGen Healthcare can help you find solutions for all aspects of medical billing—tailored to fit your practice.

[1] E.J. Mundell, "More Americans Pushed into High-Deductible Health Plans," U.S. News and World Report, February 22, 2018,
[2]Jacqueline LaPointe, "74% of Providers See Increased Patient Financial Responsibility,", June 17, 2016,
[3] "Digital Payments: As Medical Billing Goes Digital, New Benefits — And Challenges — Arise," (blog), October 23, 2018,
[4] Ibid.


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