Why are So Many Clinics Outsourcing Physician Billing Solutions?

Physician billing is the process of submitting claims and receiving payments for medical services provided by physicians. It helps the physicians to receive fair compensation for their service.

However, as the digital transformation in the healthcare sector is on the rise, the demand for consumer-focused solutions has highly increased. It is becoming difficult for the providers to get updated with the regulations due to the changing billing regulations.

That is where the requirement of billing companies comes into the picture. But the issue is that so many vendors providing RCM services are there in the market, it is difficult to distinguish which one will help you.

Furthermore, with the right billing partner by your side, you can have a better ROI along with seamless billing operations. These professionals can improve your claim approval rate which will facilitate your revenue growth in the long term.

Before knowing the reason for which the providers plan to outsource the billing operation, let’s know about how the Center of Medicare & Medicaid Services (CMS) guidelines play an essential role in streamlining your physician billing operations. But, first, you also have to understand the concept of fhysician fee schedule or PFS.

Physician Fee Schedule

The Physician Fee Schedule (PFS) is a list of the payment rates used by the CMS to reimburse healthcare providers. Medicare started using PFS to determine how to pay for the physicians’ services in the year 1992.

It is applicable to all types of healthcare clinics like the doctors’ offices, hospitals, SNF, and also the services given in the patient’s house. Moreover, it is important to know about PFS as dictates how much a clinic should be reimbursed for their specific service, and the billing services calculate these correctly to make an accurate billing process so that the provider gets proper reimbursement.

However, they use the CMS guidelines to provide the proper framework and rules to understand how the PFS is used and updated. Hence, let’s know the CMS guidelines outlined by Medicare for PFS.

CMS Guidelines for physician billing

• PFS rate setting and Conversion Factor: 2025 is a little comfortable for the physicians because it has dropped by 2.93% from the previous year. It also means the conversion factor dropped from $33.29 in 2024 to $32.35 in 2025.
• Billing guidelines for caregiver training service: Medicare has created new codes and payments for caregiver training focused on direct care service and support. Moreover, Medicare also introduced new codes and payments on behavior management and modification to help the providers produce better care for individual patients.
• Billing guidelines for the Office/Outpatient (O/O) Evaluation and Management (E/M) Visits: Medicare has finalized a proposal to allow payments for the O/O E/M visit complexity add-on code (HCPCS code G2211).

Do you feel confused after reading about all these guidelines? Don’t worry, because the billing services mainly use these codes to streamline the billing process, so you just need to check whether they are following these guidelines or not.

Now, let’s dive into the challenges that billing companies solve to reduce billing inaccuracies.

Challenges Solved by the Physician Billing Company

1. Compliance with the updated regulations: The billing regulations are highly complex and difficult to manage for the providers. So that is where the billing companies come up with their specialized experts who not only comply with the complex regulations but also stay updated with the billing regulations to make an accurate billing process.
2. Dedicated resources: The healthcare resources perform almost all healthcare operations, that is why it becomes difficult for them to give ample time to the billing process. On the contrary, the medical billers provide dedicated resources who will specially take care of your billing process so that you can focus on other important tasks.
3. Prior authorization: Prior authorization is a very complex procedure for the provider to manage as they do not have enough knowledge of this. That is where the billers come up with experienced people who double-check each process to resolve all the complex prior authorization procedures so that the providers can focus on patient care.
4. Long aging claims: The long aging claims refer to the outstanding insurance claims which remain unpaid for an extended period. These claims have been denied a large number of times because the healthcare staff do not have adequate knowledge to correctly submit those claims. On the other hand, the billing companies have highly trained staff who constantly communicate with the insurance companies and review the claims regularly to solve the long-ageing claims, which reduces the bad debts.

But is it that much easier to just hire any random physician biller who can solve your healthcare challenges? The answer is no. That is where you need to know how to choose the right biller to grow your business.

How to Choose the Right Billing Company?

• Look for their experience and also the reviews they got from their clients.
• Check if they have the advanced technology to streamline billing operations.
• They should adhere to all the billing guidelines thoroughly.
• Check if they are transparent about their process.
• For them, protecting patient information is the utmost priority.

Final Thoughts

Hence, managing the complexities of billing comes up with a lot of challenges that become difficult for the providers to solve. Moreover, the clinics also face numerous issues with prior authorization which increases the rate of their claim denials.

That is where it can be a feasible option to outsource physician billing services which can take care of all the administrative tasks so you can improve the quality of your patient care.