Using an outside billing service by Marc H. Sencer, MD

Chiro Biz Quiz: Using an outside billing service

By Marc H. Sencer, MD

There are numerous pros and cons to outsourcing your billing.

For a new or small practice it can be cost-effective to use a billing company.

Presumably, you will get experts in the field and avoid the costly trial-and-error period that small practices can go through, and they may be able to help with credentialing your providers and have contacts at insurance companies.

One of the biggest downsides to using a billing company is that you lose some degree of control. For some doctors this is an intolerable condition.

You also have to consider that the billing company may not live up to your expectations or they may have a high employee turnover with your account getting shuffled to a new person frequently.

Lastly, your cash flow may suffer while you make the transition from in-house collections to outsourced billing.

Preventing a costly mistake

In order to prevent a costly mistake, there are several things you must discuss with prospective billing companies before deciding to hire one.

• Ask basic questions: Be sure to ask them how long they’ve been in business and how they will provide references in their field. Find out if they’re familiar with the types of insurance you deal with.

After all, having 10 happy clients whose practices are 90 percent Medicare doesn’t help you if your practice is 90 percent workers’ compensation.

Find out what provisions you can get out of the contract if you are not satisfied and what happens to the receivables if you want out.

Be sure to ask if the same person will be working your account all the time. If not, move on.

Finally, ask about employee turnover and how long the person assigned to your account has been with them.

Do they have certified coders on staff? Are they accessible if questions come up?

• Discuss their fees: You will need to find out if they bill on a percentage basis like most other companies.

Ask about the reports and services included in the basic fee and if there are additional or hidden charges. Will they negotiate a smaller percentage as your collections increase? Will they insist on doing all of your billing or just do the portions you want to outsource?

For example: Some practices prefer to do their own collections because they fear the billing company may be too aggressive. Others want to keep certain insurances in house.

Do they bill electronically? Most do, but it’s still important to ask.

Discuss the possible set-up fee and set-up downtime and find out if you need to purchase proprietary software or if they bill and generate reports using your fee slips. This is important because the software can be expensive and sometimes difficult to use.

Ideally the transition should be smooth, and they should be able to begin collecting as of an agreed upon date.

• Talk about specific billing needs: Will they generate the reports you want and provide them with the frequency you want?

For example: You may want Aged Accounts Receivable biweekly as opposed to monthly.

Ask them if they keep a chronological log of all collection activities and how often they go over reports and logs with you.

Finally, make sure they understand that any decision to write off a bill must be made by you. Don’t use a billing company if they are unable to provide a log of collection activity.

A billing company can be a viable alternative to in-house billing — just be sure you do your homework carefully.

Marc H. Sencer, MD, is the president of MDs for DCs, which provides intensive one-on-one training, medical staffing, and ongoing practice management support to chiropractic integrated practices. He can be reached at 800-916-1462 or through


Test yourself

Test your knowledge about what to do when using an outside billing company with this true and false quiz.1. It is always more expensive to outsource your billing than to do it in house.

2. If a billing company comes with good recommendations, you can hire them even though they refuse to keep a log of collection activity.

3. High employee turnover is a red flag for potential future problems with a billing service.

4. You should ask every billing service you are considering about set-up fees and downtime during set up.

Answers: Nos. 3 and 4 are both true.

Nos. 1 and 2 are both false. For a small practice, it may be cheaper to outsource the billing than to hire a full-time biller.

You should consider the collection log an essential tool that your biller must provide.