Comparing In-House vs Outsourced Billing for ABA Providers: Maximizing Returns for BCBAs

deciding between outsourced billing for ABA providers and keeping the billing in-house, a person stands at the crossroads

An important question ABA clinic owners have to consider is about the best approach to handling insurance billing: "Should I manage billing in-house or outsource it?" 

This is a valid question as both in-house and outsourced billing for ABA providers have their own advantages and disadvantages. As Tony Robbins famously said, "Where focus goes, energy flows." This quote is particularly relevant here, as the decision will significantly impact where a clinic’s resources and attention are directed.

Be sure to read to the end to learn about a real life case study about in-house vs. outsourcing billing!

Deciphering the True Costs of In-House ABA Billing

When considering in-house ABA billing, it is crucial to understand the full scope of costs involved. Why? Well at first glance, managing billing internally might seem like a cost-effective solution, but there are a number of hidden expenses and challenges that ABA clinics need to account for.

Firstly, staffing is a significant consideration. Hiring dedicated billing staff requires allocating funds for salaries, benefits, taxes, and ongoing training. Experienced billing professionals command competitive salaries, and the need for continual education to keep up with ever-changing insurance regulations can add to these costs. Additionally, turnover can be high in billing departments, leading to further expenses in recruitment and training new people.

Another major cost factor is the administrative burden. In-house billing requires significant time and effort from administrative staff, who must juggle multiple tasks such as claim submissions, follow-ups, and payment reconciliations. This can lead to inefficiencies and errors, particularly in a busy clinic environment where staff are already stretched thin. These errors can result in claim denials and delays, ultimately impacting the clinic’s cash flow and financial stability.

In addition, the technological infrastructure needed for efficient in-house billing cannot be overlooked. Clinics must invest in billing software that is both robust and adaptable to handle the intricacies of ABA services. This software often comes with a hefty price tag, including initial setup fees, regular updates, and maintenance costs. There may be other softwares needed for project managment, secure online file storage, etc. To comply with HIPAA and other data security regulations may require further financial investment.

Lastly, opportunity costs must be considered. Time and resources spent on managing billing could be better utilized in enhancing clinical services, patient care, and marketing for growth. BCBAs and administrative staff might find themselves overwhelmed with billing tasks, detracting from their primary responsibilities and potentially affecting the overall quality of care provided to clients.

Understanding Hidden Staffing Expenses

Don't you just hate hidden costs?! No one likes to be surprised by hidden expenses! So before making a major decision, it is prudent to consider all the costs involved in hiring an in-house biller.

  • The real cost of in-house billing staff encompasses salary, benefits, taxes, recruitment, training, managing turnover, and rectifying employee errors.
  • High staff turnover in billing departments leads to the loss of specialized knowledge and necessitates additional time and expenses in training replacements.
  • Money lost because billing staff "don't know what they don't know". In other words, unless they have years of experience, attend ongoing training, and know the industry, many staff leave "money on the table" with their lack of knowledge.
  • The risk associated with billing staff getting sick or needing extended time off can have significant repercussions on billing operations.

"Where focus goes, energy flows."

Tony Robbins

The Price of Billing Mistakes

How do you calculate the cost of a mistake? Most never consider what it is really costing them when a mistake (or worse, ongoing, continous mistakes — yes, ABA billing codes can be confusing) are made. Some mistakes are more costly than others!

  • Billing errors adversely affect the financial health of ABA therapy providers in a number of ways including by reducing reimbursement rates.
  • ABA therapy providers without specialized billing expertise face a higher probability of errors, leading to delayed payments and additional staff time spent on corrections.
  • Sloppy billing practices may trigger ABA insurance audits, compounding the financial and operational pressures on ABA therapy providers.
  • The intricacy of ABA insurance billing, characterized by insurance network complexity, presents significant challenges, including the additional work of handling time-consuming insurance company calls.

The Real Benefits of Outsourced Billing for ABA Providers

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65%

Deloitte's Global Outsourcing Survey

According to Deloitte's Global Outsourcing Survey, 65% of companies believe outsourcing enables them to focus on their primary business functions, enhancing overall productivity and strategic focus​.

Outsourcing billing tasks can significantly enhance the financial health and operational efficiency of an ABA practice. By partnering with specialized billing agencies, ABA clinics can experience improved cash flow through the reduction of claim delays and rejections. This eliminates the need for costly billing tools and allows therapists to dedicate more time to patient care rather than administrative tasks.

Behavioral health providers who outsource their billing can reallocate resources towards patient care, thereby enhancing the quality of service provided. This shift enables clinic staff to focus on what they do best while leaving the complexities of billing to professionals who are well-versed in the nuances of the insurance landscape.

Additionally, outsourced billing services streamline the new patient intake process by ensuring that accurate patient information is collected and effectively communicated with payers. This leads to a smoother path from patient onboarding to final reimbursement, improving the overall patient experience.

In today's economy, outsourcing plays a pivotal role in business operations, offering companies cost-effective solutions and access to specialized expertise.

"Do what you do best and outsource the rest."

Peter Drucker

Streamlining Revenue Cycle Management

Outsourcing ABA billing can streamline billing systems, accelerate reimbursements, minimize errors, and contribute to a more robust management of the overall revenue cycle.

Leveraging automated processes like claims scrubbing can lead to increased billing efficiency and quicker payments.

ABA practices that utilize outsourced billing services often experience quarterly and annual revenue improvements and increased collection rates.

Scaling Up with Expertise

Outsourced billing services are designed to be scalable, allowing ABA therapy practices to adapt to growth and changes in their business models. This flexibility ensures that practices can manage increased patient volumes or new service offerings without the need for extensive in-house adjustments.

Managed ABA billing services not only enhance operational efficiency but also cater to the specific needs of small, medium, and large ABA practices. These services offer transparency and detailed analytics, helping practices track their performance and optimize their revenue cycle effectively. This comprehensive support allows practices to focus on delivering quality care while increasing financial health and growth.

Benefits of Outsourcing Summary

So what does working with a reputable ABA insurance billing company do for you?

Access to expertise and specialized knowledge

ABA insurance billing requires up-to-date knowledge of changing regulations, coding, and insurance policies. Outsourcing gives you access to experts who stay current with industry updates, ensuring compliance and maximizing revenue potential for your practice.

Cost savings and increased efficiency

Maintaining an in-house insurance billing department is costly due to salaries, benefits, and software expenses. Outsourcing converts these fixed costs into variable ones, reducing errors and speeding up revenue cycles through advanced technology and economies of scale, ultimately saving costs and improving efficiency.

Reduced administrative burden

ABA insurance billing can overwhelm  practices with limited staff. Outsourcing reduces this burden by handling claims, denial management, and payment posting, minimizing errors and delays, leading to faster reimbursements and better cash flow.

Increased focus on patient care and business growth

As a behavioral therapist, your main focus should be on patient care, not managing billing tasks. Outsourcing insurance billing frees up time and resources, allowing you to enhance patient interactions and improve overall satisfaction and outcomes.

Scalability and flexibility

Outsourcing insurance billing offers scalability and flexibility to handle changes in patient volume and regulatory requirements. It ensures continuity and quick adaptation to growth or staff shortages without compromising quality or efficiency.

"Time is what we want most, but what we use worst."

William Penn

The Benefits of In-House Billing

Are there benefits to in-house billing? Depending on your circumstances, in-house billing may offer these benefits:

  • More control over your billing processes
  • Maintain control over quality assurance.
  • Customization of billing procedures to address the unique demands and requirements specific to your clinic.
  • May offer better return on investment depending of quality of staff, training and how organized and efficient management is.

Overcoming Common Myths About Outsourced ABA Billing

Contrary to popular belief, dealing with insurance network complexity requires more time and attention than many realize!

Myth 1 - Managing ABA billing in-house is less expensive.

Usually, the ABA clinic who has become convinced that in-house billing is cheaper has forgotten to account for the hidden and long-term accumulated costs!

Myth 2 - Insurance billing is easy now that it is electronic.

Just click a button and away it goes! This is somewhat true, but as they say, the devil is in the details! This just describes once aspect of the RCM (Revenue Cycle Management). RCM involves multiple steps and problem solving when things don't go as planned. Clicking the "Send" button is truly easy. Don't you wish that was the only component to the RCM process?!

Outsourced ABA billing services often provide more resources and specialized expertise than in-house teams, resulting in up-to-date practice and coding knowledge that an in-house team may lack.

Case Study: The Impact of Billing Errors

Introduction

A clinic (That shall remain anonymous!), a long-standing client of Advocate Insurance Billing, provides a compelling case study on the critical importance of partnering with an expert insurance billing service. The clinic initailly partnered with us in 2007.

Initial Success and Departure

For five years, Advocate worked with the clinic to ensure smooth operations, minimal Accounts Receivable (AR),  and timely reimbursements. However, in 2012 they were told by their EHR/billing software company that the software made the billing easy and they could do it themselves.  The clinic decided to manage billing in-house that same year.

Challenges and Financial Losses

By December 2015 the clinic had returned to us for help as they were facing a serious financial situation. Our in-depth review revealed over $141,000 in AR aging, with a substantial portion of these claims dating back to 2013 and 2014. Unfortunately, around $50,000 of these older claims were too outdated to be re-billed due to the one-year timely filing limit, leading to a direct financial loss for the clinic.

Recovery and Stability

Despite these challenges, we were able to assist the clinic in recovering approximately $30,000 of the past claims, which were still within the allowable timeframe for re-billing. Since re-engaging with Advocate Insurance Billing, the clinic has a healthy AR metric, avoiding large outstanding balances and ensuring a steady cash flow.

Conclusion

This clinic continues to partner with us to this day (as of 2024). The experience of this clinic vividly illustrates the pitfalls of handling medical billing internally without adequate expertise. The significant financial losses and administrative burdens they faced were unnecessary as clinics can avoid the complexities and errors that lead to substantial revenue losses with the right help!

Summary

While in-house ABA billing might offer a sense of control and immediacy, the true costs extend far beyond initial expectations. Clinics must weigh these factors carefully against the potential benefits, considering both the financial implications and the impact on operational efficiency and patient service quality.

By outsourcing certain functions, businesses can focus on their core competencies, improve efficiency, and achieve significant cost savings, ultimately contributing to a more robust and competitive business model. These benefits underscore the strategic importance of outsourcing in today's dynamic business environment.

NOTICE

At Advocate Insurance Billing, we strive to ensure the accuracy and reliability of the information provided in our articles. However, the content is for educational purposes only and should not be considered as a substitute for professional advice. We encourage our readers to conduct their own research as practices and regulations in the field of ABA insurance billing and ABA credentialing can change frequently. While we make every effort to keep our information up-to-date, we cannot guarantee that all content is free of errors or omissions.

NOTICE

At Advocate Insurance Billing, we strive to ensure the accuracy and reliability of the information provided in our articles. However, the content is for educational purposes only and should not be considered as a substitute for professional advice. We encourage our readers to conduct their own research as practices and regulations in the field of ABA insurance billing and ABA credentialing can change frequently. While we make every effort to keep our information up-to-date, we cannot guarantee that all content is free of errors or omissions.