The durable medical equipment (DME) industry is in constant regulatory flux. And billing for dozens of items and services, each with different requirements, can be tedious and expensive. Durable medical equipment includes those items or services that are expected to last five or more years. The category also includes crutches, canes, oxygen, diabetic supplies, ostomy supplies, and other similar healthcare-related services.
To be successful, billing for DME requires expert and comprehensive knowledge of the reimbursement and documentation rules for Medicare, Medicaid, and commercial insurance plans. In addition, those billing durable medical equipment must keep meticulous records to comply with an ever-changing group of laws that ensure necessary and sufficient care.
A recent survey found that healthcare practitioners considering outsourcing their DME billing were most concerned about revenue management and collections, DME billing errors and their consequences, and ongoing biller training.
So what are the advantages and disadvantages of outsourcing DME billing services for your practice?
Key Benefits of Outsourcing DME Billing Services
Quality durable medical equipment billing services can benefit your practice by allowing a knowledgeable and dedicated billing team to focus exclusively on your specific medical billing operations, including claims filing, accurate coding, and documentation compliance. This personalized attention increases the rate of clean claims and revenues collected.
Outsourcing DME billing takes the pressure off of administrative staff and healthcare practitioners, allowing them to concentrate on quality patient care.
Efficient Billing Process
One of the key factors of successful outsourcing is a comprehensive streamlining of the entire revenue cycle from correct coding and clean claims submission to collections and appeals. Another benefit is the enhanced revenue brought about having a relationship with a billing partner that works to find procedural issues throughout the revenue cycle.
This is also a great way to find omitted or misunderstood billing opportunities. It is not uncommon for small healthcare practices to forego services or procedures they believe will be denied or expose the healthcare practice and individual practitioners to regulatory audits. This is especially true regarding DME.
Regulation Management, ICD-10, DME Codes and Modifiers
The resistance within the reimbursement environment for durable medical equipment can not be overstated. DME billing requires comprehensive, specialized understanding of HCPCS Level II codes. Even with a strong understanding, coding errors and overutilization account for a surprising percentage of rejected claims.
Add to that a misunderstanding of compliance requirements, and you may consider dropping a service altogether. And to complicate the situation, DME billing guidelines are in constant flux. The cost of maintaining a properly trained staff may even outweigh the revenue generated.
But can durable medical equipment coding and billing really be that difficult? Well, yes. The coding for a clean claim on a basic wheelchair or home oxygen service can require several hours of administrative time. And many DME services are constantly in audit status, adding delays to revenue collection.
However, there are solutions. A streamlined process developed by an experienced DME billing service can support your practice in many ways.
On-time Collections & Steady Revenue
Timely and reliable cash flow is the lifeblood of any healthcare business where the vast majority of revenue is claim dependent. However, when claims are denied and appeals are required cash flow is adversely affected.
The Kaiser Foundation analysis of the 2020 ACA Marketplace found that carriers denied roughly 18% of in-network claims. The range of denials was as low as 1%, but reached as high as 80% depending on the insurance carrier and services billed.
Imagine the effect on daily operations if 50% or even 20% of your submitted claims were denied.
That’s why minimizing errors before the submission is so important. But acceptable claims require hours of in-house attention from specialized employees. And while the 2015 federal requirement that healthcare providers utilize electronic billing has reduced the technical cost of claim submission, labor costs continue to rise. So, while the submission of the initial claim is still relatively manageable, once a claim is denied, the costs to rework the claim can quickly become unfeasible.
Collections also require trained staff. It may take multiple billing statements before payment is received. The Medical Group Management Association found that it takes at least 3.3 billing statements on average to obtain full payment. But many practices simply do not have the time or resources for that kind of follow-up. If that balance is left unmanaged, it is rarely recovered.
According to a Kaiser Foundation Survey, 16% of Americans owe up to $500. And 41% of all Americans carry some level of medical debt.
It’s obvious that maintaining in-house billing and collections departments can be costly, requiring the purchase of equipment, DME billing software, and the hiring of technical experts and experienced billers.
Reducing this cost is one of the best reasons to engage a DME billing service. Outsourcing can reduce billing costs by minimizing initial billing errors and streamlining the collection process.
Revenue Cycle Management & Reporting
Many healthcare practices are concerned about daily operational management when outsourcing DME billing. The good news is that the right billing provider will improve management of the revenue cycle as well as access to regular reports on business KPIs. This wealth of information allows practitioners to gain insight into their patient care services, allotting time where it is needed.
If the DME billing service has a consumer-centric focus, it is possible to transform the patient’s payment and engagement experience. This combination of a dedicated billing and coding team with an easy way for consumers to fulfill their financial obligations is a win-win scenario for most healthcare practices.
Enhanced Access to Customer Information
Access to patient information is an important component of any practice. It is vital to the continuum of care and patient satisfaction. In fact, many insurers now consider customer satisfaction a major component of health care outcomes.
With all its different plans and programs changing who pays what, medical billing is also confusing for patients. In a poll of 2,000 Americans, 56% agreed they were “completely lost when it comes to understanding health insurance”. This lack of understanding naturally results in a delay in bill payment.
Hiring a professional medical billing company for DME billing can help. With streamlined revenue management throughout your billing system, it is easy to provide patients with detailed information about the cost of their care. More and more people are paying bills electronically. Making their accounts available on a digital platform allows patients to review their bills and choose payment options to suit their situations and budgets.
Medical billing is complex in general and DME is especially challenging. It can take up a disproportionate amount of time if it isn’t your whole business. Outsourcing to a professional medical billing company has been a very beneficial solution for many medical businesses from private practice to hospitals.
Medcare MSO offers all aspects of medical revenue cycle management (RCM) from billing and old AR management to insurance verification and provider credentialing. If you’d like to find out how we can provide this service and increase your bottom line, give us a call at 800-640-6409 and we’ll be happy to explain!
