Handling accounts in-house allows physicians to monitor coding

In-house billing requires knowledge of coding for reimbursement, and time for billing and training of staff, but this hands-on approach helps the physician - who is ultimately responsible for the business - ensure that the job is done properly, says Alan Wirtzer, M.D., medical director, Midvalley Dermatology and Cosmetic Surgery Center, Sherman Oaks, Calif.

"If physicians are going to do their own billing in-house, they have to be willing to be not only very familiar with the use of codes for reimbursement purposes, but they also have to be willing to spend time with the billing staff so that they are intimately aware of what the staff is doing and how they are handling the responsibilities that are being delegated to them," Dr. Wirtzer says.

Pros and cons

"Presumably someone very experienced is handling the billing as the doctor learns the ropes of running a business," says Dr. Strachan, uses a billing service in her own practice.

"Also, if it does not work out with a billing company, severing the relationship is not complicated, such as the issue of firing an employee (for example, with increased unemployment insurance rate)," she adds.

Some disadvantages to the billing service route, Dr. Strachan says, are that a service maybe more expensive than hiring an employee, and it may be more difficult to keep track of whether the company is following up on rejected claims, particularly if the billing is done off-site.

Technology tactics

For his in-house billing, Dr. Wirtzer uses an accounting system from Misys plc, which acts as a clearinghouse for billing the insurance companies.

"New software for record-keeping and electronic medical record systems that incorporate codes into their software can be helpful, but dermatologists must still be careful with regard to coding," he cautions. "A lot of the young dermatologists are very technically astute, and very capable of dealing with EMR systems. However, you just have to be aware of not letting the system do too much in terms of taking the responsibility from the physician. For example, with these systems, if you document a certain amount of information, the software will tell you what code is appropriate for that particular visit. It could be very easy to manipulate the system or manipulate documentation only for benefit of reimbursement," he explains.

Because the physician is ultimately responsible to the insurance company as well as to Medicare for the accuracy of billing, it is incumbent on the physician to be knowledgeable about coding and documentation.

"If the physician's staff or a third-party medical billing company does things that are considered abusive or fraudulent by a payer, it is the physician, not the staff, who will have to pay the penalty. So, it is absolutely important for dermatologists to have a good working knowledge of this. In addition, they should look for staff that is knowledgeable, of course, because it makes their life easier," Dr. Wirtzer says.