Challenges in Medical Billing Industry


With constant innovation in medical diagnostic procedures, treatment processes, administration, and a rapidly increasing volume of patients, the healthcare sector is easily one of the fastest revenue generating sectors today. Medical billing services are an integral part of the cycle. It is projected that healthcare BPO market would be worth around 17 billion dollars by 2024.

In the past few years, the field of medical billing has undergone significant changes. The new presidency and government machinery had always been expected to make crucial changes in the healthcare sector ever since Donald Trump assumed the presidency. Healthcare has always been in a constant flux of volatility with recent reform changes in insurance and medical billing processes.

Here are some of the challenges that the medical billing sector is likely to face going forward.

  • High Claim Rejection – According to a research conducted by the California Nurse Association, an alarming 22% of the claims that were submitted were rejected. Furthermore, around 40% of the claims rejected were never put forward for re-submission. The factors behind these alarming rates of rejection vary from lost claims, missed deadlines, to a generally cavalier attitude to working the process. In cases where a claim doesn’t translate to payment, it’s either because a claim was not received or there was a defective claim as a result of wrong data or the absence of proof for the billed services.
  • Failure to Re-Appeal – In most case scenarios, the hospital administration pays due diligence in submitting the claim; however, nonpayment can occur as a consequence of a clerical or administrative error. When this happens, it’s basically not viable economically for the administration to pursue the claim further with follow up until payment is made.
  • Incorrect Claims – The American Medical Association has stated that around 10% claims are not paid properly with commercial mainstream payers underpaying on close to 10% of their claims.
  • Bloated non-core Medical Costs– Another serious challenge facing the billing industry is the revenue distribution allocated towards administrative processes in the healthcare sector which includes Medical Billing, claims processing, Of the nearly 3 trillion dollars spent on healthcare, a large chunk of around 400 billion dollars goes to administration charges. This has been attributed largely to outdated technology being used to implement transactions between the payer and the provider.
  • Physician Burnout – In many scenarios, the practitioners are burdened with a great deal of administrative responsibilities, which includes entering EMR data for medical billing purposes. This takes up a lot of time and energy that should actually be spent with the patient and the core medical process. This eventually leads to fatigue and errors, which again translates to a major challenge for medical billing.
  • This is why outsourcing administrative processes such as medical billing to a third party that is skilled and efficient at the job is a welcome solution to making the healthcare sector streamlined and cost-effective.

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