The High Cost of Manual Medical Billing (And How Automation Can Save You)

If your healthcare practice is still relying on manual medical billing processes and strong SOPs, you could be losing thousands of dollars per year due to inefficiencies, errors, and labor costs. Automating your medical billing workflow can provide significant cost savings while improving accuracy and speeding up reimbursements. Let's look at some of the major costs of manual billing:

Labor Costs

Having staff members manually entering patient demographic and insurance information, tracking claims status, posting payments, and following up on denials is extremely labor intensive. According to the Medical Group Management Association, practices spend an average of $7 per claim just on labor for manual billing processes. For a medium-sized practice filing 20,000 claims per year, that's $140,000 in labor costs alone.

Denied/Rejected Claims

Manually inputting codes for medical procedures and diagnoses makes it easy for staff to accidentally enter invalid codes or make other errors that can lead to denied claims. Industry estimates show 30% of manually submitted claims are rejected on the first submission. Having to rework and resubmit claims leads to significant delays in payment and additional labor costs.

Missed Reimbursements

With so many payer rules and requirements around coding, authorization, and billing windows, it's easy for manual billing staff to miss opportunities for full reimbursement. Complex cases may have services or codes overlooked, leading to missed revenue. One study found practices fail to collect as much as 25% of legitimate reimbursements.

Productivity Losses

The time spent tracking down missing information, correcting errors, resubmitting claims, and following up on denials could be spent more productively on other tasks. Manual billing creates a constant cycle of rework that drains productivity.

By automating medical billing processes, practices can avoid most of these costs. Automated billing software with integrated coding tools and rules engines ensures claims are cleaner and more compliant from the start. Automated payment posting and denial management streamlines workflows. Practices can reduce medical billing labor costs by up to 60% while getting faster reimbursements.

The return on investing in medical billing automation is clear. By eliminating the high costs and inefficiencies of manual processes, the software quickly pays for itself while accelerating your revenue cycle. Automating just makes good financial sense for healthcare practices of any size.

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BillCare Systems aims to simplify Professional Billing systems for all users. Drawing on over 15 years of experience in Medical Billing, we comprehend the challenges Providers face and offer effective solutions suitable for Billing Companies of any scale, from large firms to small practices.

Our objective is to enhance your profitability by creating products that streamline your billing process, boost your cashflow, and minimize your expenses.