Red Flags when Offshore Outsourcing Medical Billing

Any outsourcing activity takes proper planning, execution, monitoring and management. A successful partnership with a medical billing service provider takes more work than what some practices are prepared to handle. It’s disastrous to transfer responsibility for the billing function to an outside firm and then forget about it. While most medical billing providers genuinely want to help their clients improve profitability, there are a few that focus only on what they can get out of the outsourcing relationship, no matter the cost. If you’ve decided on offshore outsourcing medical billing, and you are in the process of choosing the right company, watch out for the following warning signs:

Experience in your specialty

Medical billing providers can be generalists, specialists, or a combination of both. What you need depends on the activity you want to outsource. If you run a private practice with majority of patients covered by Medicare or Medicaid, look for a company that specializes in Medicare billing processing and appeals. If you are a heart surgeon working with other similar specialists, look for a medical biller that has experience with specialist claims processing. Coding and billing regulations change all the time, and your offshore outsourcing medical billing partner should be a master at your particular industry segment.


If you see nothing but positive testimonials on the company’s website, and they can’t give you a list of clients or contacts that they’ve worked with in the past, consider this a red flag. Transparency is crucial when you’re about to entrust your billing functions to a third party. Look for someone who’s not afraid to let potential clients know what their previous clients really think of them.

Inflexible outsourced medical billing pricing models

Medical billing pricing models are typically percentage-based (the company takes a percentage of practice collections), fee-based (fixed rate per claim), or hybrid (a combination of percentage-based pricing on some insurance firms and charge per claim on others). For percentage-based pricing, most providers charge 4 to 8 percent of net collections excluding payer refunds. Some areas require medical billers to charge a flat fee instead of a percentage. Each model has its pros and cons, but the provider should be able to adjust their pricing based on your needs. For example, if you are a family practitioner with lower-margin claims, percentage-based fees may be more appropriate. Beware of companies that only have one pricing model. Look for someone who can customize their solutions to fit your practice.

Poor communication

Can you reach your medical billing partner whenever you need help or for meetings? If they are difficult to reach (you’re on hold for minutes at a time, you feel that they’re giving you the runaround, etc.), look for someone else. Physicians and healthcare administrators are busy people, and good medical billing providers understand this and the need to provide support when needed. You should have a direct line to the account manager as well as top management through various channels (telephone, e-mail, chat).

Unclear ICD-10 strategy

ICD-10 implementation is set for October 2015, but many healthcare organizations are still unprepared for the transition. A good medical billing company can help you cope with the changes and improve the profitability of your practice at the same time. Ask the company how they are preparing or have prepared for the ICD-10 rollout. Also ask about their specific strategy for helping your practice through the transition. Vague, general answers can indicate that they are not quite prepared.

Poor transparency

Beware of medical billing companies that do not give you access to claim information that you need whenever you need it. You should always have access to your own data, even if it is stored and managed in the provider’s system. The same goes for reports on charges and payments. They should be able to give you actual system-generated reports instead of just summaries or snapshots. Also, find out who owns the data when the outsourcing contract is terminated. Some vendors hold on to the data to prevent clients from terminating the agreement.

Poor medical billing data management

Patient records, EMR and medical billing software must be HIPAA compliant. Avoid medical billing companies that do not have stringent data protection systems. Watch out if previous clients complain of unauthorized data sharing, even unintentionally. There should also be backup and recovery strategies in place in case of security breach or force majeure. Work with a company that ensures the privacy, safety and redundancy of your data.

No performance guarantee from the medical billing service provider

Avoid companies that do not have any guarantees to back up their service. Reputable medical billing vendors provide some form of performance guarantee.

Incompatible medical billing or healthcare software/technology

There are thousands of medical billing software available, some of them sophisticated and useful, and some not. Beware of medical billing companies insisting that you use specific software, whether it’s their own or somebody else’s. A reputable service provider will customize the technology required and recommend options that fit your goals and budget. For example, integrating software with existing EMR can be very expensive, and some companies may pressure you into buying their proprietary billing software even if you’re not ready to let go of your current system. If they don’t provide alternatives, it’s best to move on.

Bait marketing techniques

Some medical billing companies advertise very low rates to attract unwary clients. Be sure to read the fine print. Vendors offering low prices usually have a high revenue requirement, making most clients ineligible for the low rates. Or they may offer limited services, such as one-time submission and processing for each claim without appeals or resubmission services. This means that the burden of claims follow-up and unpaid balance collection falls on the practice.

Long-term contracts

Avoid working with new billing providers that want to lock you into long-term contracts. Outsourcing contracts usually run for 24 to 60 months, but most clients agree to longer terms if they already have a working relationship with the provider.

Getting Started on Offshore Outsourcing Medical Billing to the Philippines

Learn more about outsourcing in the Philippines, outsourced staff leasing and the Philippines as an outsourcing destination.



Talk to an expert today. Contact Sourcefit to learn more about the possibilities and opportunities of building your dedicated team of professionals in the Philippines.