In 2017, after 30 years of managing his billing in-house, Dr. Peter Liber decided to transition to an outsource billing company. I sat down with Dr. Liber to learn more about his practice, the circumstances behind the move, and how the journey has gone for him and his practice.
Brandon: Dr. Liber, thank you so much for taking the time to speak to me today.
Dr. Liber: The pleasure is mine.
Brandon: Tell us a little about your practice.
Dr. Liber: We’re a suburban general pediatric practice that I started from scratch in 1987. I was a solo practitioner for approximately three years. Then I brought on a part-time pediatrician. A year or two later, the part-time pediatrician became a full-time pediatrician. We’ve been growing ever since. About five years ago, we opened a satellite office about 13 miles west of our original location. Early last year, we merged into a pediatric supergroup, PediaTrust. We became Pediatrust’s 12th practice.
Brandon: How many total doctors do you have now?
Dr. Liber: We have six pediatricians and two nurse practitioners, a total of five and a half full-time equivalents.
Brandon: How about your insurance distribution, do you have an estimate in terms of the percentage of private versus HMO versus Medicaid?
Dr. Liber: I would say approximately 85-90% private. About 5% HMO, and about 5-10% Medicaid.
Brandon: With the HMOs, does the practice belong to an IPA?
Dr. Liber: Yes.
Brandon: What EMR does your practice have?
Dr. Liber: We were with eCW (eClincalWorks) for approximately 11 years, and about seven months ago, we switched over to Epic.
Brandon: I’m curious, how did the transition from eCW to Epic go?
Dr. Liber: Not as bad as I had anticipated. It was much smoother than going from paper to eCW. My supergroup partners helped with the transition before and after go-live. The front desk also transitioned well. In fact, seven months in, I like Epic.
Brandon: What do you like about Epic?
Dr. Liber: A few features stand out. Ease of remote HIPAA compliant access, the potential for template sharing and customization, but the feature that stands out is the ability to share patient medical information. Most of the health systems surrounding us are on Epic as well. So the Care Everywhere feature is terrific in helping with the transition of care for our patients.
Brandon: You mentioned you started as a solo doc. How did you handle the billing when you first started? Did you start with a billing company, or did you do it in-house?
Dr. Liber: Until the past 18 months or so, it’s been in-house.
Brandon: How many billers did you have?
Dr. Liber: We had one full-time biller and two to three part-time billers.
Brandon: Seeing that you had the billing in-house for 30-years, can I assume everything was working well?.
Dr. Liber: I was happy with our in-house performance. I had an independent audit three years ago, which confirmed this. Our in-house billers were not a weak link.
Brandon: Let’s talk about the events that led to the decision to move the billing to an outsourcing company in 2017.
Dr. Liber: As stated earlier, we joined the pediatric supergroup PediaTrust on January 1, 2018. PediaTrust uses an outsource billing system named SperoMD; so our billing was also transitioned to the billing service.
Brandon: The decision to go from in-house billing to outsourcing was a result of joining the supergroup. Not because you identified issues with your in-house billing?
Dr. Liber: Correct. It was a decision made for me. It did not make business sense to continue to do in-house billing, especially with the impending transition to a new EMR.
Brandon: How did the transition from in-house to outsourcing go?
Dr. Liber: The latter half of 2017 found our billing department short staffed. Some of the in-house billing staff had personal health issues, and others moved on, which disrupted our billing efforts. The transition brought to light pitfalls of our current in-house situation. The billing company that took over was instrumental in helping clean up some of the unfinished business that was left over from the last few months of the old in-house system.
Brandon: Were you aware of the billing inefficiencies as a result of the personnel issues, health issues?
Dr. Liber: These issues prompted us to switch sooner rather than later. We outsourced our billing before the transition to the supergroup. The outsourced company took over about a month before the merger with PediaTrust.
Brandon: Did you see fluctuations in the receivables or a drop in claims being filed while the personnel issues and challenges were occurring?
Dr. Liber: I didn’t see them at the time, but it was definitely apparent once the new billing company took over. As they continued to work our account, the problems were evident. Given our staffing issues, the outsourcing company was able to dedicate more resources to clean up the mess.
Brandon: A short-staffed billing department is a problem that many practices run into.
Dr. Liber: If you have the equivalent of two full-time billers, and one of them is out, or one of them ineffective, that really is a huge disruption with quite a ripple effect to the bottom line.
Brandon: I’m glad you brought this up. One of the upsides of working with a billing company is that they have the flexibility to increase capacity. If work increases, more claims need to go out, or a new physician is added, they’re able to allocate more resources, and the practice doesn’t experience any disruptions financial or otherwise.
Let’s talk about the work SperoMD, PediaTrust’s billing company did for the practice. You mentioned the transition to SperoMD was prompted by staffing issues, and not necessarily because of problems with the billing. However, SperoMD identified problems with your practice’s billing.
Dr. Liber: We had periodic auditing of the billing system by my accountant. But we had not been doing that the last few years. In retrospect, I realized there was a lack of adequate oversight.
Brandon: Do you remember the problems the billing company identified?
Dr. Liber: So, there were overpayments that weren’t handled as effectively as they should have been. That needed to be corrected. Claims weren’t going out as promptly as they should have. Certainly not as quickly as it has been since outsourcing.
Brandon: Did you see immediate improvements? What were the results?
Dr. Liber: The result is that the payments are coming in much quicker, in a more timely manner than ever before. So it’s been beneficial there.
Brandon: Clearly, it has been a pleasant experience for the practice in many ways. You have resources that can be allocated if necessary. Also, you have the oversight that you didn’t have before. It sounds like things are running a lot more efficiently.
Dr. Liber: Correct. The coding, for example, I have more confidence in doctors coding correctly because our outsourced billing vendor reviews each claim before they send it out. SperoMD coders review each encounter note and verify that the proper documentation and level of coding match up.
Brandon: SperoMD has experts that review your charting to make sure the coding is adequately aligned with the documentation. This is a service that the billing company provides?
Dr. Liber: Correct.
Brandon: Billing companies handle the insurance portion of the billing. However, that’s only half of the process. The other half is patient responsibility. Is your billing company proactive with collecting patient balances and calling patients when there are issues?
Dr. Liber: That’s an important part of service. When the patient comes in, those issues are discussed face to face. But the statements are sent out by the billing company.
Brandon: If a patient calls the practice with a question about their bill, do your staff handle them, or do billing inquiries get sent to the billing company?
Dr. Liber: It depends on the issue. I think inquiries are handled at the office first. Then after that, if the question can’t be adequately answered, it’s routed to the billing company. If I had to guess I would say probably 40-50% of the calls that come in are handled in-house and the rest are sent out.
Brandon: A couple of points that I think are worth highlighting. The first one is, even though the practice has outsourced billing, the office still has billing responsibilities. Your comment about your staff handling questions right then and there, either on the phone or face to face, as opposed to referring the patient over to the billing company is an excellent example of delivering good service. The second point is the importance of training the front desk to answer billing questions. Referring all billing inquiries to the billing company — or the billing department, for that matter —can cause all kinds of delays and issues.
Dr. Liber: Yes. And the personal touch is still there with those billing issues.
Brandon: We talked about some of the great things the outsourcing company does for the practice. Have you encountered any challenges during the transition or even currently?
Dr. Liber: Well, the other 40-50% of patient billing inquiries are out of our hands. It’s important to make sure that the representatives in the billing company are treating our patients with the same respect that we treat our patients. That’s a challenge. To my knowledge, there haven’t been any complaints about that. Since that question isn’t answered under our roof, we want to make sure that everyone’s on the same page in terms of handling different billing scenarios and issues.
Brandon: What about the cost of hiring a billing company, any thoughts about that?
Dr. Liber: At our practice, outsourcing the billing is almost twice the cost of our in-house billers, when you factor in salaries, benefits, and IT costs. However, I suspect that the expense is outweighed by correcting the efficiencies in collections and the improved coding, and improved reimbursement that has resulted from the change. I can’t give you an exact dollar amount, but I think it’s a net gain on that front.
Brandon: Excellent point. I often talk with clients about the cost of things and the value of things. I explain that cost is what you pay; value is what you get. When you compare the cost of outsourcing the billing with payroll, many get sticker shock, step back, and don’t consider any potential upside. However, in your experience, the confidence you have with your coding, the efficiencies that are in place to get paid faster is added value. It’s hard to quantify value, but if you consider the amount of money that was lost and the downside of going without the added benefit, it puts the cost into perspective.
Dr. Liber: You don’t want to think about that, but you do have to think it through to realize that cost is not the only thing to consider.
Brandon: It seems that the consensus among private practices is that billing companies do not do as good of a job as an in-house billing staff. What are your thoughts, or what would you say to people who are very firm on that belief?
Dr. Liber: Those people probably have a very efficient, smooth running billing staff who are up to date, who are healthy, who are totally committed to the practice, and have skin in the game. My advice to them is to start their own billing company with their staff. Because if they’re doing such a good job, then there are a lot of people out there that aren’t.
If you think your billing staff is functioning at a high level, it would be wise to get an independent agent to audit your billing and your coding practices periodically. An audit will likely uncover issues that, when corrected, will more than pay for the inquiry. A good practice manager hopefully will sustain the corrected issues by holding all parties accountable. Most pediatricians are not formally schooled in medical practice finance. We learn by trial and error. Along the way, inefficiencies pop up. The billing function of a practice must run efficiently and effectively. You want the billing piece to be as good as the clinical piece.
Every leg of the practice should be equally strong. Sometimes you need the help of an outsourcing company to do that. In my case, I think it was a good thing. It might not be right for everyone.
Brandon: “The billing has to be as good as the clinical piece.” I think that’s an excellent point. In addition to the lack of oversight and having a competent manager are there other lessons you learned along the way during this process that you’d like to share?
Dr. Liber: Don’t hesitate to ask for help. Don’t hesitate to get an outside person to take a fresh look at the billing piece of your practice. I think that an independent auditor or a consultant someone like Paul Vanchiere or Susanne Madden from the Verden Group can do that. I suggest the practice get somebody who’s focused on your specialty and assessing that piece of your practice. Also, practices should probably do assessments randomly, once a year, once every other year, to make sure they are doing all the right things.
The other thing is keeping up on the latest coding changes. That can be a challenge if you’re in-house. I think if you’ve got an excellent billing company, they should be on top of those things and they should make any changes automatic.
Brandon: What about the AAP’s coding hotline? They are a good resource.
Dr. Liber: I love the AAP coding hotline. But sometimes you want an answer right away. Now, I pick up the phone. I call my billing company and get the answer in real time. I do that once every few weeks, not every day. But it’s good to have that expertise available.
Brandon: I have one final question for you. What was something that you thought you knew about outsourcing and practice billing that you later found out you were wrong about?
Dr. Liber: I thought that paying more for outsourced billing services was unnecessary, that we could do it better in-house. I was wrong. The extra services and efficiencies are more than worth it.
Dr. Liber, a native of Gary, Indiana, has been practicing pediatrics since he founded Wheaton Pediatrics in 1987.
Disclaimer: SperoMd is a subsidiary of PediaTrust. Dr. Liber owns a minority interest in PediaTrust.