Monitoring the Performance of your Outsourced Medical Billing Team

outsourced medical billing team

Although drivers for outsourcing vary, most healthcare managers outsource because they want to make their billing process more effective and efficient while reducing costs and increasing collections. An outsourced medical billing team can help them achieve these goals by monitoring their medical billing process and performance. Monitoring provided by an outsourced medical billing team helps medical professionals and practice owners identify billing issues, implement actions to address the problem, and ensure the practice’s long-term profitability.

Some organizations also rely on the medical billing service provider to develop a service level agreement (SLA) that includes performance measurement. Top-performing practices understand that their input is crucial when creating the SLA and monitoring vendor compliance. They know that both parties need to manage the outsourcing relationship and ensure that goals are achieved. In unison, they consider practical concerns such as determining which competencies are the most important as well as finding the best way to allocate limited resources. They also improvise changes that can improve accuracy and time to collect.

Successful Outsourcing Partnerships

Performance management strategies, metrics and improvement plans vary by company. However, healthcare organizations with high-performance revenue cycles share common characteristics. Top performers focus on improving key areas that are most crucial to their success, and they enlist the help of the medical billing company to ensure that the practice excels.

Top-performing healthcare organizations are good at setting effective metrics. They’re also good at implementing strategies to ensure that these metrics help achieve their goals. On the executive management side, they employ traditional and non-traditional metrics to improve the monitoring of revenue cycle processes. They also develop and implement accountability systems around the monitoring and reporting processes.

Top-performing healthcare organizations also expect their outsourcing partners to measure performance using specific metrics. They are client-focused and they make performance reporting top priority by monitoring engagement daily.

Service Level Agreement (SLA)

Most medical billing providers include management for their outsourced medical billing team. A detailed service level agreement (SLA) serves as the main tool for monitoring engagement and performance. The SLA covers issues such as the transfer of resources and staff, pricing models, payment terms, liability, penalties, and contract termination.

After developing the SLA, the client and the provider develop key performance indicators (KPIs). This requires a detailed process analysis focused on identifying and measuring precursors of success. Workflow mapping is also done to manage and improve leading indicators. Risk and relationship management is then executed.

While the exact metrics for each SLA vary with the billing provider, the typical areas covered include volume, quality and accuracy of work. Speed, responsiveness, and efficiency are also monitored.

The level of service required should be specific and measurable for every process to allow the quality to be benchmarked. This will lead you to either reward or penalize the outsourced medical billing team. This is an example of a service expectation for invoice processing. Invoice scanning and processing are completed within 20 days after the receipt date. The accompanying metric is that invoice and invoice status can be accessed within 20 days after being received.

Medical billing companies often use tools to monitor outsourced medical billing team compliances with SLAs and provide self-reporting to clients. However, the organization should assign its own internal staff to measure vendor compliance.

Performance is measured against medical billing providers in similar markets using data and pricing comparisons from multiple industry sub-segments. One downside is that the client may have to invest in databases and analytics software for monitoring. However, rigorous data-driven performance monitoring and auditing are always superior to traditional and intuitive spot-checking.

Sourcefit Philippines Outsourcing Blog: Outsourced Medical Billing Team

Outsourced Medical Billing Team Key Performance Indicators (KPIs)

The best KPIs to use when monitoring the performance of an outsourced medical billing team will vary according to the organization’s goals. Many medical billing firms develop and tweak their KPIs to fit the client’s needs. Examples of medical billing KPIs:

Claim Acceptance Rate

The majority of clams (90 percent) must be accepted by the insurance carrier the first time they are submitted. Claims acceptance depends highly on the accuracy and completeness of the submitted information.

Experienced billers as well as claims validation and scrubbing can boost the claim acceptance rate. If the claim acceptance rate of the outsourced medical billing team falls below expected and remains that way for a certain time, the provider must make changes or face penalties.

Time to Collect

Insurance claims must be collected within 90 days or less. The medical billing provider must collect 90 percent of insurance payments within 60 days after processing is completed.

Claims Appeal and Re-submission

To avoid backlog, and speed up collections, the medical billing provider must re-work and re-submit all denied or rejected claims within three days. Some outsourcing firms specialize in claims appeals and resubmission; you can tell by their higher-than-average performance in this area.

Billing and Coding Accuracy

The medical billing partner must have a synchronized billing and coding process to ensure that documentation matches with the codes and that errors are kept to a minimum. Accuracy and completeness help reduce denials and allow the practice to breeze through audits.

Other examples of medical billing benchmarks are:

  • Insurance verification rate of scheduled and unscheduled patients
  • Payment request rate
  • Real-time collection rate of co-pays and deductibles
  • Registration accuracy rate


Practice owners and revenue cycle leaders should have dedicated teams assigned to address process improvements.

A team can be assigned to perform oversight functions, such as monitoring and evaluating key billing metrics and identifying trends. They could then develop improvement strategies as needed. In large organizations, this team group can include the CFO or revenue cycle manager. In smaller practices, the role can be performed by the billing department manager or even the physician assigned to the outsourcing project.

Another team can be assigned to a specific area of the revenue cycle or to a certain billing task. The goal would be to identify problems and address them immediately. For example, when the medical billing provider implements new software, this group can manage the response and transition process. Group participants generally include IT, admin, clinical leaders, and clinical staff.

Successful practices also have internal systems in place to gain feedback from employees. They hold frequent meetings focused on addressing specific issues. They also have sophisticated processes to gain feedback from patients regarding process improvements. For example, when a medical billing partner employs electronic records, the practice and the provider assess the impact on patients through direct interviews or focus groups.

Feedback systems can be established on an ad hoc and ongoing basis for better performance monitoring. Top-performing practices tend to involve their patients in revenue cycle activities much more frequently than most practices.

Collaboration Between Client and Medical Billing Service Provider

Communication between the client and the medical billing service provider is top priority. Proper oversight means having frequent collaboration between these two. Even for seemingly unimportant tasks like writing the content of patient forms, the provider and client should work together to align expectations around gathering accurate information for insurance claims.

You can assign a dedicated representative that will interact with the provider regularly to communicate billing-related issues and changes to operations as they come up. When the provider is well-informed about how the practice is being run, it can make necessary changes to metrics and KPIs to improve performance.

Sourcefit Philippines Outsourcing Blog: Outsourced Medical Billing Team Monitoring

Targeted Improvements

The main focus should be around revenue cycle areas that have the biggest impact on patient care and patient experience. Successful practices make efforts to improve front-end billing and collections systems. This leads to collections increase and profitability. Examples of front-end improvements include:

  • Mentoring/coaching of internal and outsourced medical billing staff.
  • Implementing incentives programs for top performers.
  • Streamlining patient scheduling processes.
  • Using more sophisticated technology for front-end processes.

To improve collection systems, top service providers work with management to educate patients about insurance coverage, copayments, and deductibles. When patients are scheduled for appointments, for example, front desk personnel can give them a cost estimate immediately and communicate payment processes and expectations. Clear communication also helps front desk staff to ease the anxiety associated with pursuing payments from patients.

Remediation and Correction

Performance monitoring and management of outsourced medical billing includes remediation and correction or issue identification and resolution. No matter how well the client runs an outsourcing project, issues do and will come up.

Common issues include incorrect patient’s demos, poor account tracking and documentation, and balance adjustment errors. Remediation and correction help reduce the negative impact of these errors on the organization. The practice shouldn’t wait for the vendor to report problems. By using actual data and the right tools, the person or team assigned to manage the outsourcing project can initiate remediation plans with the billing provider. Sophisticated tools can also flag non-compliance issues on a regular basis and alert internal teams to investigate and address the issue quickly.

To learn more about outsourcing, you can read our Top 8 Qualities of an Outsourcing Company in the Philippines article. We invite you to follow us on social media and to visit our website to learn more about our services.

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