Grasping the Importance of Medical Billing and Accounting Software

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Healthcare is essential. Everyone gets sick and is entitled to adequate healthcare treatment when needed. Serving a wide range of patients of different age and conditions, it is understandable that the healthcare industry offers vast services, complies with complex statutory requirements, and handles stressful environments daily.

Medical Billing and Accounting Software

According to a Copatient State of Medical Bill Confusion survey, approximately 72% of clients in the US do not understand the medical bill they received, and 94% believe their bill was too expensive. The global healthcare market, which is projected to reach 12 trillion US dollars by the end of 2022 (and even higher now due to the ongoing pandemic), is struggling to create a meaningful connection with the consumer when it comes to billing for medical services and wellbeing.

Medical billing is a complicated topic for the patients, but what about you, the provider that operates in this industry?

Read more: Accounting for healthcare organisations – the 5 best practices

Who is paying the bill?

By default, understanding where the revenue is coming and going is not a straightforward process. It is even more tricky when you are running healthcare practices internationally. Many regions have strict insurance policies and healthcare plans, which makes accounting and billing a highly complex process. 

The encyclopaedia of Health Economics recognises these four different healthcare payment structures in developed countries:

  • Private healthcare without insurance– the consumer pays directly to the healthcare service provider for the selected treatment (e.g., cosmetic surgery or dental care).
  • Reimbursement insurance– the consumer signs a contract with a private insurer. When they undergo a treatment that is included in the agreement, the expenses can be submitted to the private insurer, and the consumer receives a reimbursement. This is the most common form of secondary/voluntary type of insurance.
  • Conventional insurance– similar to the reimbursement model, but the insurer signs a legal agreement with medical organisations to provide a health plan for the consumer. The difference between the two systems is, with reimbursement insurance, the consumer is responsible for who they choose to have the medical service with. Conventional insurance can be a more cost-efficient solution as it offers health plans for selected treatments and providers. 
  • Sponsored insurance– the consumer pays directly or indirectly to a sponsor (typically the national health insurance office), who provides a health plan and pays the healthcare service providers. This is sometimes wrongfully referred to as “free healthcare”. It is not free and is paid from collected taxes (a common method employed in European countries). The consumer does not pay for general health services, or pay only a small fee, while the sponsor covers the rest.

The variety of systems put pressure on you and other medical practices to not only comprehend the local legislations and rules but also employ an effective billing and accounting system to remain functioning.

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What are medical billing and accounting software?

The words “billing” and “accounting” software are often used interchangeably – both depict solutions that are capable of standardising, streamlining, and automating the healthcare organisation’s revenue management.

It does not mean that your software must have the word “medical” in its name or description. In fact, the billing process in healthcare is not that much different from other industries.

Medical billing is an intricate process that is also time-consuming and labour-intensive. To accurately charge patients and avoid issues surrounding manual billing, you should consider software that caters to your specific needs while still capable of elevating mundane tasks, staying up to date with constant industry regulation changes and more.

Working with sensitive financial and personal data requires tons of precautions. And with rising concerns about privacy in the digital world, you need to make security the top priority when selecting your management software.

Why do organisations need medical billing and accounting software?

Billing and administrative tasks are notorious for being error-prone. There are many factors and stakeholders involved in the process, which can lead to costly consequences if not handled properly.

Activities such as verifying patients’ insurance, submitting claims, processing payments, or following up on denied claims can be aided using technologies.

A suitable solution not only can help you to transform the way we work by automating the above tasks, but it can also help your teams to post payments, increase collections, code claims properly, generate reports on collections and rejections. Additionally, the accounting function can save you tons of headaches when trying to understand where your resources go, e.g., to payroll, account payable and receivable, write-offs, or credit card processing.

Read more: Must-haves of healthcare accounting software

Reduce errors

Typical issues relating to medical billing include:

  • Incorrect patient information
  • Missing information, documentation, or authorisation
  • Duplicate billing
  • Improper coding

Of all possible mistakes, coding medical claims is the utmost common issue made by healthcare organisations. The reason could be due to entering outdated or mismatched codes, not properly recording codes, over/ under coding, etc.

What’s more, each insurance provider requires a different set of documentation and precise patient’s details when filing for claims. Even a minor mistake, such as misspelling a person’s name or reversing their birth date, can result in a denied claim. Not to mention, manually managing files after files of spreadsheets and billing records will definitely cause even more errors and duplications.

These problems may be fraudulent or may occur by accident. An automated solution that streamlines and optimises the entire medical billing workflows is a valuable component of your revenue management cycle as well as a financial management system.

Read more: 7 worst financial fiascos caused by Excel errors

Connect internal and external billing offices

Depending on the size of your organisation, you may outsource the tasks of billing to an external agency to free up your internal team’s valuable effort so they can focus more on providing a higher quality service to patients. On the other hand, the external team’s sole purpose is to dedicate their effort to billing and management, thus improving accuracy.

To enable both parties to excel in their respective positions and efficiently score their responsibilities, medical institutes need to select medical billing and accounting software that allows them to communicate with each other smoothly without any hitch.

Store data, stay compliance

In addition to improving your profitability, the software can capture all patients’ information and store them digitally in a centralised hub for easy access. This allows medical practitioners to retrieve relevant information quickly and obtain a complete picture of their patients’ conditions.

When you are handling such an overwhelmingly large volume of sensitive, confidential data, you also need to ensure both your organisation and the software comply with the latest regulatory requirements. That means all information that you collect, record, and store should stay in compliance with the latest regulatory requirements.

The medical billing and accounting solution is typically built with the demand in mind. Therefore, you can operate with one less headache in mind.

Read more: Make compliance an opportunity, not a burden

Common features in medical billing and accounting software

Patient pre-registration

Win that impressive first impression and create a smooth experience for all patients before they walk into your venue for their first appointment.

Beside displaying appointment information, the feature should also help your employees to collect other materials related to the patients, such as intake forms, insurance eligibility checks, payment, etc.

Linking insurance verification and billing as well as having all information readily available to healthcare practitioners before the first appointment can be a huge time saver for everyone.

Claim management

Medical claim management is one of the most time-consuming responsibilities. As a result, it often gets outsourced to an external agency.

Without the proper organisation, billing, filing, updating, and processing, patients would not know what they owe, and your office would not be able to collect funds from the right payer.

Stay on top of claims and avoid delayed payments with medical billing and accounting software that enables you to streamline your work with:

  • Paperless claim collecting and processing
  • Claim scrubbing, history, reconciliation
  • Insurance providers listing
  • Ensuring everyone is on the same page, and thus, reducing the possibility of miscommunication.

Reporting

The ability to provide analysis and structured reports via a user-friendly interface can greatly benefit your teams. Combined with an intuitive dashboard, a robust reporting tool showcases relevant insights so you can grasp the overall operation situation and make strategic decisions promptly.

Workflow management

Having streamlined, optimised workflows can make the daily chaos less hectic, and services are carried out without disruptions. Workflows allow you to automate repetitive tasks and significantly reduce human-related mistakes.

For information, tasks, processes to move from one stage to the next without obstacles calls for high accuracy, validation, and explanation – things that only effective workflows can deliver.

Similar to other business management solutions, medical billing and accounting software comes in various shapes and sizes. They can feature simple or comprehensive capabilities to suit the unique needs of each healthcare organisation.

The solution can be purchased as a standalone system, deployable on-premise or in the cloud, or be integrated into the organisation’s current electronic health records solution to become an integral part of the entire management suite. Whatever your choice, be patient, be thorough, and make it counts.

Why Smart CFOs are Moving to the Cloud

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