healthcare supply chain optimization
What Is BPO in the Medical Industry?

Business process outsourcing (BPO) in the medical industry helps many medical firms enhance employee productivity. Furthermore, it improves patient service, thereby increasing overall performance and revenue.

The healthcare industry is both competitive and dynamic. Outsourcing allows medical institutions to meet business, technology, and patient demands. However, many people need to be aware of this practice and how to engage in it.

This blog addresses frequently asked questions about BPO in the medical industry. It discusses its significance, services, risks, best practices, and advantages.

Continue reading to learn more about healthcare BPO.

What Does BPO Mean in the Medical Field?

BPO is a strategy in which an organization hires a non-affiliated, professional firm to manage specific medical industry processes.

This independent firm could be a BPO firm or a third-party service provider like:

  • Medical billing companies
  • Medical coding firms
  • Managed service providers 
  • Outsourcing companies
  • Digital marketing agencies
  • Technology service providers

How BPO Works in the Medical Field

A BPO company provides teams to perform specific tasks for a healthcare client. These responsibilities include customer service and technical support to emergency care and facility maintenance.

As long as the service provider can handle the workload, a healthcare organization can delegate as many functions as it wants. In addition, the third-party vendor may be granted permission to handle entire divisions rather than just specific processes. A service-level agreement (SLA) that outlines the services to be delivered is used by medical organizations to track a BPO company’s performance.

BPO Types in the Medical Industry

A medical company determines whether a process should be performed on-site or off-site. BPO firms use off-site arrangements in a variety of ways:

  • Offshore is when the service provider operates in a country far from the healthcare organization’s headquarters. For example, a hospital in the U.S. can have a BPO partner in India. 
  • Nearshore is when the BPO provider works in a country near its medical client’s main office. A dermatology office in California can easily outsource to an agency in Mexico. 
  • Onshore is when the third party runs its outsourced tasks in the same country as the client of the healthcare company.

What Services Does BPO Offer for the Medical Industry?  

A BPO firm manages back-end operations and handles a significant portion of a healthcare organization’s work volume. This third-party provider handles operations at reasonable rates, allowing healthcare organizations to cut costs.

The medical industry can outsource the following services to a BPO service provider.

1. Data Entry

Medical organizations can outsource record, document, and data management. These functions are time-consuming because they require constant revisions and updates.

Here are some examples of medical data:

  • Laboratory reports and orders
  • Patient assessment forms
  • Nursing records and progress notes
  • Clinical records
  • Test reports
  • Prescriptions and drug inventory
  • Patient insurance

Read more: Top 10 Benefits of Outsourcing Data Entry Services

2. Medical Transcription

Converting voice-recorded clinical reports into text files is known as medical transcription. Because this is a time-consuming task, healthcare providers must rely on third-party transcriptionists to organize clinical summaries.

BPO firms train medical transcriptionists to convert audio recordings into written documents. These documents are essential for insurance claims, clinical histories, and medical data.

3. Claims Processing

Claims processing handles medical claims from insurers for patients. Checking, validating, and authenticating claims requests are part of the process. This allows insurance companies to pay the full or partial amount owed to the healthcare provider.

To handle insurance claims, BPO firms provide dependable and experienced claims processors. Among their responsibilities are the following:

  • Examining claim submissions
  • Acquiring and confirming records and data
  • Working with beneficiaries and insurance agents
  • Processing claim reimbursements

4. Medical Coding

Medical coding refers to the handling of patient health documents. Medical coders use a classification system to accomplish this task. They translate the services and procedures provided to patients into the universal numeric and alphanumeric codes required for insurance claims.

BPO providers train medical coders or nosologists. These professionals keep track of the healthcare services and facilities that patients use. They ensure that there are not a few coding errors by thoroughly checking the information. They also stay current on the latest coding standards from regulators and industry experts.

Medical coders use coding systems such as:

  • Healthcare Common Procedure Coding System (HCPCS)
  • Diagnosis Related Group (DRG)
  • Current Procedural Terminology (CPT)
  • International Classification of Diseases, 10th Revision (ICD-10)

5. Medical Billing

Medical billing is creating superbills and filing claims with insurance companies based on patients’ health and insurance records. It also entails following up on payments with private and public insurers for reimbursements, such as Medicare and Medicaid.

A BPO company assists medical organizations by:

  • Using advanced billing software to generate insurance claims and medical invoices
  • Submitting claims to insurance firms and government agencies
  • Pursuing claims until proper payment is made
  • Staying updated on regulatory changes to avoid billing errors leading to claim denials or non-payment 

6. Revenue Cycle Management (RCM)

RCM is a difficult administrative process. It entails tracking patient service revenue from the start of treatment to the last medical bill payment. A BPO provider for its client handles this function.

RCM includes medical coding and billing, as well as the following:

  • Verification of eligibility. To reduce claim denials due to missing information, an outsourcing firm assists in submitting clean claims to insurance providers (e.g., patient name, address, birthday).
  • Capture and billing of charges. A BPO company processes and sends the provided patient services for payment. It also double-checks with the billing team to ensure the charges are correct.
  • Claims assessment and submission. Before sending claims to insurers, a specialist group scrubs or cleans them by triple-checking information, correcting rejections, and revising claims.

BPO Best Practices in the Medical Industry

What Is the Importance of BPO in the Medical Industry? 

Healthcare BPO services offer a variety of advantages to medical organizations. Some of the benefits are listed below.

1. Improved Revenue Collection. 

A BPO firm collects insurance and patient payments. It monitors and follows up on partially paid accounts receivable, unpaid balances, and revenue claims. Before forwarding claims to insurers, a BPO company reviews them for accuracy and areas for improvement. This ensures prompt approval and payment.

2. Scalable Operations. 

A BPO firm can scale up or down services without disrupting workflow. It adds personnel when a medical organization is busiest and reduces team size when there are fewer healthcare activities. Scalability provides payment flexibility to hospitals, allowing them to pay less during slow periods.

3. Assured Government And Industry Compliance. 

A healthcare BPO firm keeps track of government and industry regulations and trends. It assists healthcare institutions in complying with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), ensuring that patients’ health data is protected from unauthorized access by hackers.

4. Lower Operating Expenses. 

A BPO company manages job postings, application screening, hiring, and training. Because it has the infrastructure to manage outsourced procedures, hospitals do not need to purchase new equipment or facilities. They save money, time, and effort as a result of this.

5. More Time On Patient Service. 

A BPO firm assists medical companies in improving patient care by taking over time-consuming processes. This enables doctors to concentrate on their patients, enhancing their reputations and competitive advantage. Higher revenue equates to better medical services and the possibility of expansion.

What Are the Risks of BPO in the Medical Industry?  

Medical BPO services may also pose risks. The three disadvantages of BPO are as follows:

1. Inadequate Security Measures

Critical patient data security is a top priority when a healthcare organization hires a service provider for specific processes. However, connecting its IT systems to the BPO provider exposes it to cyber-attacks and data breaches. Threat actors are a source of concern for businesses of all sizes.

Another point to consider is confidentiality and privacy. Personal information that is sensitive and confidential is handled by medical organizations, such as:

  • Usernames
  • Passwords
  • Financial accounts (bank accounts and credit card numbers)
  • Home addresses
  • Medical data

Patient data may be compromised or stolen if the BPO provider fails to enforce stringent protocols and best security practices.

2. Unexpected Expenses

Not all service providers reveal their full charges right away. They do not immediately inform prospective customers about rates, pricing packages, and fees.

It is difficult to determine hidden or unexpected expenses. Service providers may charge for the following:

  • Employee termination
  • Employment transfers
  • Staff shortages
  • Extra-legal services
  • Work interruptions
  • Pre-termination or cancellation
  • Generation, printing, and delivery of bulk documents or reports 

In the long run, these problems hurt a healthcare provider’s budget and how it works with the BPO company.

3. Less Internal Management Control 

The medical organization must relinquish some control when processes are delegated to a third-party provider. It must delegate authority to its BPO partner to meet the agreed-upon goals. The vendor may use its own policies and standards for better workflow alignment.

Healthcare organizations may struggle to achieve the desired control over an off-site team. They must adjust to the new work environment and allow the service provider to train and supervise the contractors.

What Are BPO Best Practices in the Medical Industry?

Here are some things to remember when looking for the right healthcare BPO partner.

1. Select a Trustworthy and Reputable Service Provider

Examine whether the BPO prospect is client-focused, prioritizing your requirements and processes. It must provide timely and precise services to optimize payment collection, work efficiency, and employee productivity.

2. Investigate the Vendor’s Healthcare Knowledge and Technical Capabilities.

Ascertain that the potential partner is up to date on the most current coding systems in various medical fields, such as ICD-10, Clinical Modification (ICD-10-CM), HCPCS, and CPT.

Furthermore, select a BPO provider with advanced encoding and billing applications to improve RCM processes and obtain proper payments from insurance providers. It is preferable if the provider can manage back-office processes using cloud-based solutions.

3. Investigate the BPO Provider’s Services

Request a list of the prospective provider’s medical outsourcing services. Inquire about the following competencies::

  • End-to-end RCM and similar services
  • Claims denial management
  • Practice management software (PMS) and electronic medical record (EMR) access
  • Analytics and reporting solutions
  • Accounts receivable management

Verify whether the prospect’s medical billing system matches yours to avoid processing lapses, delays, and inconsistencies. 

4. Monitor the Outsourced Operations 

Keep track of the outsourced tasks to ensure the service provider’s performance is on track and aligned with your goals.

Use quantitative and qualitative measurements to evaluate its output. The quantitative method measures productivity using key performance indicators (KPIs), such as claim denial rate and claims processing time. On the other hand, the qualitative approach is concerned with the communication skills and knowledge of the third-party team.

In conclusion

Outsourcing in the medical field has more benefits than drawbacks. More businesses are turning to BPO providers to help them with their business challenges.

In the coming years, BPO companies in the medical industry will continue to make significant contributions. The presence of service providers, medical billing companies, technology providers, and other similar businesses suggests that healthcare organizations’ demand for outsourcing will remain high.