Many companies outsource back office functions such as payroll and accounts receivable to save time and costs. Outsourcing payroll also provides an extra layer of security for sensitive data and a level of professional expertise in an area where small errors can lead to major liabilities.
Not all back office functions lend themselves as easily to outsourcing as payroll. Accounts receivable (AR), for example, seems pretty cut and dried: when a customer purchases something, the AR department prepares and sends an invoice, which the customer pays. If payment is late, AR pursues the matter, sometimes referring the account to a collection agency.
In the health care industry, though, things are much more complex because most patients carry health insurance, and when a service is provided to a patient, it’s billed both to the patient and the insurance carrier. In addition, different carriers often negotiate preferential payment terms with health care practices, so that two patients covered by different insurance companies might be billed different amounts for the same service. Because of this complexity, many practices have determined that it’s less costly to hire a medical billing company to provide those services. In addition, engaging the services of a medical billing firm can also be more transparent, more efficient, and more secure than operating a billing department.