Outsourcing; From Theory to Practice

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January 29, 2013 by Rick B


Our last few posts have focused on how, in theory, business office outsourcing can create an economically viable competitive advantage for your business.  As we all know, theory and practice are two different animals.

Today we’ll give some real life examples, and take you from theory to practice on a variety of functions that can be outsourced.

Business Office Extension 

Example: A small hospital has an overworked business office.  Denied or rejected insurance claims are piling up, and many are not being resubmitted.  Working the backlog of old claims is forcing the business office to constantly look in the rearview mirror, that is, they are focusing so much on old claims behind them,  they are forced to take their eyes off the road ahead which could result in an increase of billing errors—perpetuating the cycle.

Solution: Industry experts have reported 25-30% of all insurance claims are either denied or rejected. If the billing office does not have time to resubmit a high percentage of claims, they can simply outsource the follow-up of all denied or rejected claims.  If the office has the capacity to work a portion of the denied/rejected claims, they can simply outsource the aging claims that are susceptible to hitting timely filing deadlines.  Studies show 65% of all rejected/denied claims are never resubmitted, this is no longer a worry for the hospital.

Early Outs & Self-Pays 

Example: An office comprised of independent physicians is unhappy with the percentage of their accounts receivable being sent to collections.  On top of that, they need to hire additional staff to keep up with the workload.

Solution:  In lieu of hiring additional staff, they can simply outsource the follow-up process.  A series of letters is sent out—on their letterhead, notifying their patients of any outstanding balances.  If necessary, the letters are followed up with a phone call in an effort to obtain payment.  The letters are sent under the letterhead of the physician’s office, and the phone calls are made with the caller identifying themselves as a representative of the physician’s office billing department.

Payment Monitoring

Example: A trucking company has a large group of their clients on payment plans.  The business office spends the bulk of their time chasing down payments and sending out reminder notices, with many falling between the cracks.  This has kept them from other responsibilities, and has increased the number of accounts falling further behind—costing their business precious revenue.

Solution: The Company decides to outsource their payment plans.  A payment plan is initiated and followed up with a reminder notice before each and every payment is due. If a payment is missed, a past-due notice is sent out and followed up with a phone call.  This is all done as the billing center for the trucking company, customers feel as if they are dealing directly with the trucking company, not a third party.  The trucking company no longer has to spend countless hours on tracking down money, and can focus on generating new revenue for the business.

This represents a small fraction of the services that can be outsourced for your business office.  The first blog post in this series challenged everyone to ask themselves a question “what is my business”.  The point of the exercise is to re-focus on your core business—that is, what makes you money.  If you find your business is spending too much of your precious resources on non-core functions, outsourcing is worth exploring.


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