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Why Doctors and Medical Billing Companies Should be Concerned About the Outcome of Pending HealthCarePosted in News on January 27th, 2010
In our listing of informative articles, we have a disproportionately high number of articles addressing the ying and yang of pending healthcare reform. The reason is the topic of this post.
It is self evident that medical billing companies survive because of the revenue that doctors and other healthcare practices receive. The more doctors earn, the more medical billing companies will earn if they can keep the payment rates they get from their clients stable.
However, if the total revenue of a client decreases, the likelihood of medical billing companies maintaining their revenue stream decreases in geometric proportion. First, even at the same percentage rate that the medical billing company charges, less revenue to the doctor means less revenue to the medical billing company. However, there is another element that cannot be ignored.
If doctors find themselves working harder to earn the same or less money, if for example the eligibility for Medicaid is expanded and doctors find their mix of patients to include a higher proportion of Medicare patients, or if third party providers lower their reimbursement rates, the doctors and medical practices are likely to exert downward pricing pressure on their medical billing companies.
Obviously, for the medical billing companies to survive, they must be profitable and therefore there is only a certain amount of downward pricing pressure that can be expected to absorb.
However, the argument that there is a limit to how much room there is to squeeze has been propounded by medical practitioners for the longest time, and unfortunately, there does not seem to be an end to this downward spiral anywhere in sight.
The only reasonable way to plan for the future would be for the medical practices and medical billing companies to optimize their operations and streamline their overhead.
Simply stated, in order to survive, doctors and their respective medical practices as well medical billing companies will have to seek ways in which to streamline their operations, reduce overhead, and be more efficient while not allowing for a degradation in their respective services or they may very well see their bottom line adversely affected.
The introduction of HITECH as an overlay to HIPAA will only, at least initially, raise the operating costs of both medical practices and their respective billing companies.
It is possible, that if the EMR systems and their financial incentives are ever implemented as planned, they may, at least in a temporary manner, alleviate some of the pressure.
So why should medical billing companies, doctors and their respective medical practices care about healthcare reform Because in very direct way it will affect their livelihood.