Newly certified doctors are very busy this time of year getting their new practices organized. We thought we’d help lighten the load by explaining the options for handling your medical billing.

Between registering with the CPSO, applying for billing numbers, setting up banking information with the Ministry of Health and registering for MCEDT, it may be the last thing you want to think about, but deciding sooner means getting your first paycheque that much sooner. There are basically three choices to consider and in this blog, we’ll talk about the strengths and weaknesses of each.

1. Internal Group Billing Option

Physicians who start working at private clinics or even some hospitals are often happy to see that the clinic handles all billing matters for the doctors with an internal billing group. These clinics are often large enough to have billing staff who deal with claims processing, and generally have an infrastructure in place that allows certain aspects of the billing process to be done automatically. For instance, once a physician sees a patient and ‘closes’ the appointment, the claim may be automatically entered for billing so the doctor doesn’t have to write down codes, diagnoses, or submit billing sheets. Therefore, the biggest advantage of this model is that the billing process is partially automated and the physician doesn’t have to worry about billing specifics.

However, there are potential drawbacks as well. First, these clinics often have poor transparency and physicians may not know where they stand when it comes to how much of their billing was paid compared to how much was submitted. Further, we’ve consulted to many clinics like this over the years and the billing staff may be poorly trained or lack expertise. Physicians may appreciate that they don’t explicitly pay for billing services at these clinics, but they also need to keep in mind that part of their billings may be deduced to cover the overhead of internal billing groups and these costs may not be transparent.

2. The DIY Option

For physicians who don’t work at a clinic with internal billing, there are two possible approaches. The first is the Do-It-Yourself option. Even just a decade ago, doctors didn’t really have this option. Software was too expensive and cumbersome to use for most hospital-based specialists. But with relatively inexpensive cloud-based billing software, physicians can explore the DIY model. The main advantage of this model is cost. Doctors can submit claims for less than what a billing company would charge. The other advantage is that doctors can log into their accounts and see the status of their claims whenever the urge strikes.

But there are some issues with this approach. First and foremost, the billing process involves more than just entering data and hitting a submit button.  The vast majority of the time required to properly bill OHIP is spent dealing with Error Reports and RA reports that come after the initial claims are submitted.  The DIY requires the physician to sit down after their shift and enter all their data into the computer, and to review and resubmit all errors and reconciliation issues.  This often requires a level of discipline, time, and knowledge that many doctors do not have.

We’ve worked with several physicians over the years who have started as DIYers but after a few months or a year have decided that the hassle wasn’t worth the cost savings.  If a DIYer isn’t following up on errors and rejections properly the result is unpaid claims, negating the potential cost advantage of this option. It doesn’t take many unpaid claims to cover the cost of having professional billing support.

3. Full-Service Billing Agent Option

Many physicians and hospital-based specialists end up hiring a billing company to handle their medical billing. These companies vary greatly in size and scope, but what they all have, or should have, is extensive experience with OHIP billing that allows them to capture more of a physician’s revenue than would otherwise be possible.

The main advantage of working with a reputable billing company is that they handle all the billing tasks that most physicians don’t enjoy very much and generally do a poor job of when they choose a DIY option. For example, good billing companies will track down version codes, contact doctor’s office looking for referral numbers, speak with Ministry staff when problems arise, run outstanding reports, provide alternative billing code options, and know how to correct any error. Full service companies will also look after sending private bills when patients don’t have OHIP coverage, and billing out of province and third party insurance claims for you.

Another advantage of working with a reputable company is peace of mind. Physicians can be confident that they are paid fully for the work they do because good billing companies review all claims with a keen eye to catch missed codes and identify & fix billing errors. Not only does this ensure that doctors don’t miss out on premiums, but it keeps the billing compliant with the rules set out in the Schedule of Benefits in case of audit.

The downside, at least on the surface, is that billing companies are more expensive than the DIY options. Most charge a percentage based on paid claims that is generally around 2.0%, though some companies may have higher or lower rates than this. 

For comparison:

Dr. DIY bills approximately $20,000 per month and pays $50 per month subscription to use a DIY software.  Dr. DIY spends approximately 5 hours per month on their billing which includes – submitting claims, reviewing Error and RA reports and resubmitting claims. 

Dr. Full-Service bills approximately $20,000 per month and pays $400 (2%) to a billing agency for their billing.  Dr. Full-Service spends approximately 1 hour per month submitting claims to the billing agency, the billing agent takes care of everything else.   

From the comparison above you can see that the Full-Service option takes significantly less time but is $350 more expensive.  In our experience we find that Doctors using the “cheaper” DIY option often leave money on the table by not follow-up on errors, version code issues or out of Province billing.  We specialize in OHIP billing, its all we do, our process is designed to maximize your revenue. In most cases we are able to find at least $350 per month in additional revenue opportunities to make the Full-Service option effectively pay for itself.  One or two version code errors, a missed code premium, or an out of Province claim could easily add up to $350. 

Each physician needs to make their own decision: Are the benefits of outsourcing worth the increased costs? We’re obviously biased here, but we find that the service we provide often pays for itself because the fees we charge our clients are largely offset by the increased revenue and higher capture rate.

If you have any questions about whether your situation may be better suited to either a DIY model or a billing company outsourcing model like JCL, be sure to Contact Us.