Most health care organizations would rather talk about patients than administration any day of the week. Unfortunately, those seemingly small and insignificant back-office tasks need discussions time and again to make sure your practice runs smoothly. Thanks to medical software solutions, many of these tasks are easier to manage than ever before.
Receive Advice From the Experts
However, the question that many find themselves asking is: does my practice actually need any or all of these different types of software? For example, do I need health care accounting software?
Charting software (EMR/EHR), medical billing software, patient scheduling software and medical practice management software all offer unique benefits to health care organizations of all sizes.
In this article, we will discuss:
- What Is Health Care Accounting Software?
- Needs Analysis
- Medical Billing Software vs. Medical Billing Services
- Solution Selection
- In Conclusion
What Is Healthcare Accounting Software?
First of all, let’s define what, precisely, medical practice accounting software is.
Also known as medical billing software, health care accounting software is a system that manages your practice’s revenue cycle. The primary purpose of this medical accounting software is threefold: first, it aims to automate several steps of the billing process, including claims scrubbing and standardization, to relieve the clerical workload on your staff. It also streamlines the process by collecting all the necessary steps in a single interface to make administrative operations efficient and organized. Finally, it serves as a secondary net for catching errors that can be costly to both patients and practices.
Health care accounting software streamlines patient management tasks like patient accounts, collections and copays. Additionally, it handles back-office and billing functions such as accounts payable, accounts receivable and general ledger features. Medical office accounting software also helps manage the often complex workflow of processing claims with insurance providers and Medicare/Medicaid programs. It automates the process of importing data, checking it for accuracy (scrubbing) and generating reports based on the data for decision-makers to utilize.
The system also manages and tracks your patient information. Unlike EHR and EMR software, it doesn’t track their medical histories, but rather their billing information. This gives you a complete record for each patient’s billing histories, payment habits, insurance coverage level and type, etc. The record lets you send bills, request payments, create automated reminders and deliver collections letters if necessary.
Needs Analysis
Quick answer: if you use money to run your practice, you need health care accounting software. Long answer, it may not be that black and white — but the majority of medical practices can benefit from some form of accounting software for health care organizations. Be that as it may, there are exceptions. Here are some questions to ask yourself in order to assess whether or not your practice needs medical office accounting software:
How Big is Your Practice?
Large health care organizations pretty much have to use either medical office accounting software or medical billing services (we’ll come back to that). The sheer volume of patients that walk through their doors makes simple Excel spreadsheets unmanageable. MPM might be up to the challenge, but to be on the safe side, you should definitely look into both billing modules of practice management and standalone medical practice accounting software.
Small practices of the past could often handle the load of billing without a software system, but that doesn’t mean they don’t need one. Depending on how your practice manages the cognitive load, you might find that medical billing services or hiring a staff member to handle billing is more cost-effective than medical practice accounting software. That said, the problem with using medical billing services is that they’re not always willing to work with small practices since they don’t generate as much revenue as larger ones.
This issue aside, a smaller volume of patients naturally makes billing management much easier. So an MPM or a medical accounting system with simpler, less robust features (and, thus, usually a lower price tag) can still have significant benefits even for smaller or individual practices.
Select the Right Software with the Free Lean Selection Book
Does or Will Your Practice Operate in a Direct Primary Care Model?
A new trend has been popping up in medical practices around the country: discarding the relationship with insurance providers altogether. These practices, known as direct primary care (DPC) practices, collect monthly or annual fees from their patients instead of dealing with insurance claims. This trend arose as a result of wanting to improve patient care and relationships since many practices felt like they worked for the insurance companies instead of their patients. Since DPC practices hold a smaller patient panel, primary care physicians practicing in the U.S. have progressively started adopting it to reduce their requirement for administrative resources. Of 465,000 primary care physicians in the country, around 20,000 have effectively begun utilizing the DPC practice model.
If your practice operates under this model, if you’re currently transitioning to this model or if the above paragraph has convinced you to adopt this model, then you may not have much of a need for accounting software for health care organizations. One of the most significant advantages of this software is that it helps manage the complicated insurance claim process.
Managing what amounts to a subscription service for the direct primary care model is much easier without software assistance. Of course, automated patient billing is always easier than doing so manually, so direct primary care practices can still benefit from using health care accounting software.
Compare Top Medical Billing Software Leaders
Do You Use Medical Practice Management Software?
Medical practice management software (sometimes shortened to practice management, MPM or PM software) is a versatile back-office solution for health care organizations. Among other capabilities, it offers appointment scheduling software, document management, information management, revenue cycle management and a patient portal. It also offers one other important feature: billing and coding.
If practice management software already plays a critical role in your medical office, then medical accounting software is probably unnecessary. Practice management’s billing and coding functionalities include the most important accounting software features for health care organizations, including insurance claims management and cash flow monitoring. So if your practice already deploys practice management — or is looking to implement it — you don’t have to double up with medical office accounting software.
The billing modules of medical practice management software can be just as robust as a separate medical billing system or health care accounting software. If you have a small to mid-sized practice, your practice management software can likely meet your needs. If you are a multi-practice organization or a large hospital, you might want the stability and power of a designated medical accounting platform.
Medical Billing Software vs. Medical Billing Services
Another potential alternative to health care accounting software is a medical billing service. If you realize that you only need help managing your finances, you may want to compare medical billing software to medical billing services.
What are Medical Billing Services?
When you opt for outsourcing, your staff will forward bills and other financial documents to a medical billing service provider. Once the service receives your paperwork, the company will manage your claim submissions, tracking and basic data entry tasks. Typically, you’ll pay a medical billing company a percentage of the amount that they collect. Currently, the industry average is around 7%.
What is Medical Billing Software?
Traditionally with medical billing software, you’d have a system installed locally to manage your practice’s finances. Cloud-based medical billing software is becoming more prominent and is also a viable option. In most cases, medical practices only require basic billing software, but if your system is not up to date, you may want to consider upgrading to a billing management program. The extended framework includes features that will help you manage your entire facility. Features include using it for scheduling, storing electronic medical records and assessing imaging.
Compare Top Medical Billing Software Leaders
Differences
Because billing can be time-consuming and emotionally challenging, you may prefer to outsource. Medical billing service companies follow up on rejected insurance claims, contact patients regarding delinquent accounts and send invoices when it’s time for bill payments. If your practice is short-staffed, then a service provider may be more helpful than in-house software since outsourcing decreases the amount of labor needed to operate your facility. A major benefit of choosing a medical billing service provider is the convenience that it offers.
Medical billing companies may provide better transparency. If you select this type of service, make sure that the company supplies detailed performance reports upon request. This will let you review your billing operations. Outsourcing ensures that you will have access to a billing staff at all times. The service also delivers operational consistency as most companies agree to perform a specific set of services.
One of the downsides to outsourcing is its variable cost. This feature delivers budgeting challenges since the company’s fees will change every month. Also, outsourcing may include extra fees. Before contracting with a billing service provider, confirm their exact pricing structure. In addition, you will need to hand over billing control to another entity.
By choosing in-house software, you’ll be retaining complete control of your practice’s operations, which provides peace of mind. Once you’ve paid for medical billing training and the processing software, you’ll have a better return on your investment. If problems arise, then you’ll have immediate access to your records. Billing software lets users identify and address administrative issues before it becomes a serious problem.
One of the drawbacks to in-house billing is the cost. The additional salaries and expenses for employee benefits are likely to increase your practice’s overhead. Billing systems can come with a serious price tag, and cash flow bottlenecks can occur if you have a staff of only one or two billers. If one of your employees becomes sick, takes a vacation or quits, then you’ll be facing retraining expenses for a new employee as well as a potentially stalled billing department in the interim.
In Short
Billing management can be a tough choice since service providers and in-house software both offer advantages and disadvantages. When making the decision, consider the size, age and needs of your practice. For instance, if you’re just getting started, it may make more financial sense to outsource. If your practice already has a billing system in place, a system upgrade may be all that you need.
Solution Selection
If you’re still reading, odds are you’re interested in picking up medical practice accounting software for your organization. You also may be at a loss for what to do next. We can help! Here are some steps to find health care accounting software that’s right for your organization:
- Gather requirements: Your practice is unique, and you need specific things from a medical office accounting software system. This downloadable requirements template can help you identify which features of medical billing/accounting software your practice is likely to use and which features are a high priority.
- Compare systems: Next, you should compare different medical accounting software to create a shortlist of potential matches. Now that you know which features are important to you, we recommend comparing systems based on features. This ensures you create a shortlist that meets your needs rather than relying only on customer reviews or the number of features a system offers.
- Get a price quote: Wait, you might be thinking, shouldn’t price checks be the first step? Most business software vendors only offer price quotes by request — this is largely due to the fact that every business is different, so it’s challenging to offer price information without knowing what features that business needs to use. You can get a general idea for price points from our medical accounting software pricing guide, but estimates are just that — estimates! And now that you’ve created a shortlist of four or five products that fit your basic requirements, you can ask for specific price information, product demos, trials and more to find a system that works for you and fits in your budget.
- Take a trial run: One of the main pitfalls of software is that you never know if you like how it works until you try it. Many vendors offer trials and guided demos to give potential buyers a feel for the software interface, and this is a crucial step to choosing software. Medical software, in particular, has a reputation for not being user-friendly, so getting to see firsthand how the system will look is a great way to make sure you get a system you feel comfortable using. Don’t forget, each software has a learning curve, so never let a complex interface scare you away.
- Choose a system and deployment: Software comes in two basic deployment formats: on-premise and cloud-based. On-premise software requires users to house the hardware (think servers and an IT team to maintain them) on their site. Vendors run and maintain cloud-based systems, which only demand an internet connection for quick access. Both have pros and cons, so it’s important to identify your preferred deployment method and ensure the vendors you shortlist offer that option.
Bottom Line
At the end of the day, every practice large and small can benefit from using medical accounting software. The benefits of automation and reduced errors are invaluable to both the medical practices themselves and the patients they serve.
However, based on how your particular practice operates, you may find that other options, like a billing service or all-in-one system like medical practice management solutions, are better. You also may find that other methods are more cost-effective, or you may already have these functions covered. Make sure you investigate the different options to make an informed decision based on what option best equips you to care for your patients.
Do you still have questions about health care accounting software? Leave them in the comments!