Options for HIV Third-Party Billing Services
Antonio O. Arias, MBA, CHBME
Provider Advocate
NCG Medical, Inc.
November 30, 2018
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Options for Third-Party Billing of HIV Services
Executive Summary
Medical billing is a complicated task for many medical practices, but for some Local Health
Departments (LHD), Community-Based Organizations (CBO), and other Healthcare Providers
(HCP) specializing in HIV service provision, the complicated nature of medical billing has
impeded the formation of any billing capacity. Changing this trend will allow these organizations
to address ways to increase their revenue and their stability, so that they can continue improving
public health through the services they provide.
Third-party billing refers to billing Medicare, Medicaid, and private insurance for medical
services provided, as opposed to first-party billing which refers to charging patients. There are
many challenging components to the medical billing process that may deter organizations from
prioritizing billing. However, third-party billing is important when considering alternative and
dependable revenue streams. Given the complexity of the medical billing process, some
organizations choose to contract with external companies for third-party billing services. This
choice is known as medical billing outsourcing. The decision to outsource begins by
understanding and analyzing the risks, costs and differences between handling medical billing in-
house versus outsourcing.
The process of creating an in-house medical billing department includes:
Creating a fee schedule which sets the price for the services provided
Hiring billing staff to manage the billing process
Credentialing and contracting in order to work with insurance companies, Medicare,
and Medicaid
Finding a clearinghouse to check claims for errors and forward information to insurance
payers
Completing billing activities such as coding, claims submission, and denial management
The process of outsourcing medical billing includes:
Creating a fee schedule, possibly with the help or review of an outsourcing partner
Hiring a medical billing outsourcing company which will most likely charge a
percentage of monthly revenue as payment
Overall, in-house billing departments offer HIV service providers greater control over the
process and patient satisfaction, the ability to limit the sharing of confidential information,
freedom from possible hidden costs, the ability to predict fixed billing costs, and a return on
investment if a provider has already invested in in-house medical billing. Yet, establishing and
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maintaining an in-house medical billing operation can be prohibitive for organizations providing
HIV services with little experience or resources available to manage the process. The benefits of
outsourcing include reduced errors, enhanced consistency, maintaining focus on patient care
instead of billing, steadier and more predictable cash flow, ensured billing compliance, liability
avoidance, and the benefit of relationships the outsourcing company has already established.
Outsourcing partners can also provide helpful performance reports, and all of these factors often
actually lead to higher revenue for providers from outsourcing than from in-house billing.
Outsourcing has moved away from being an “all or nothing” affair due to technology that has
become available in the last few years allowing organizations to take a hybrid approach to
revenue cycle outsourcing. The best outsourced medical billing firms design their offerings with
an understanding that medical providers face unique constraints depending on the services they
offer.
HIV services providers can also choose to outsource as little or as much as they would like. This
leaves them with the flexibility to focus on their strengths while utilizing the services of an
outsourcing partner in the aspects of the process where they need the most help. In an
environment where many organizations are receiving none of the revenue they could potentially
receive from third-party payers for the services they are already providing, outsourcing may offer
an option for them to bill those payers without having to go through the process of setting up an
in-house medical billing department from scratch. For those that have some capacity for third-
party billing already, outsourcing could still help fill in the gaps, so they can bring in more
revenue overall.
This white paper was funded by a grant from the Illinois Department of Public Health.
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Introduction
Medical billing is a complicated task for many medical practices, but for some Local Health
Departments (LHD), Community-Based Organizations (CBO), and other Healthcare Providers
(HCP), the complicated nature of medical billing has impeded the formation of any billing
capacity. Changing this trend will allow these organizations to address ways to increase their
revenue and their stability, so that they can continue improving public health through the
services they provide. As these organizations begin the process of developing billing capacity, it
is important to consider all available paths to achieving that goal. In-house medical billing
departments are a more conventional option, whereby provider staff manages billing operations
on site. Yet, LHDs, CBOs, and HCPs can also consider outsourcing, either all or part, of their
billing operations. Providers can weigh the advantages and disadvantages of in-house billing,
partially outsourced billing, and fully outsourced billing to choose the option that makes the most
sense for them.
The focus of this paper is on the operational decision-making involved with addressing whether
to outsource the billing function for LHDs and related organizations. In particular, the paper
focuses specifically on billing related to the provision of HIV services for these organizations.
HIV Third-Party Billing
Human immunodeficiency virus (HIV) weakens a person’s immune system by destroying
important cells that fight disease and infection.1 HIV can be controlled with proper medical care,
but no effective cure exists. Some groups of people are disproportionately likely to contract
HIV, spurring movement towards greater accessibility of routine HIV screening and HIV
prevention services. LHDs, CBOs, and HCPs may provide one or more of the following
HIV/AIDS services:2
Screening/evaluation: Clients may complete a questionnaire on demographic and risk
information prior to testing
Testing: Sites may offer serum HIV antigen/antibody testing, Fingerstick HIV
antibody/antigen testing, or both.
Diagnosis: Early diagnosis is important for receiving the greatest benefit from drug
therapy.
Counseling: Regardless of their diagnosis, clients who are tested for HIV may also
receive counseling to reduce their risk of acquiring or transmitting the virus Counseling
may also be provided to partners of clients.3
Referral: With diagnosis, providers often offer the client information about medical,
mental health, and social support services, as well as partner referral services
1 CDC. 2018. “HIV Basics.” Last modified July 23, 2018. https://www.cdc.gov/hiv/basics/ 2 Mookencherry, Shefali. 2017. “Credentialing, Contracting, Coding and Billing for Public Health HIV Services.” December 15, 2017. https://ipha.com/content/uploads/HIV%20cred-contr-cod-blg%20Webinar%2012-15-17.pdf 3 Wisconsin Department of Health Services. 2018. “HIV Counseling, Testing, and Referral Program.” Last modified September 28, 2018. https://www.dhs.wisconsin.gov/aids-hiv/ctr.htm
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Treatment: There is no cure for HIV, but anti-retroviral therapy can slow the progress and
complications of the disease, and prevent secondary infections. Some organizations also
provide preventive HIV drugs to reduce the risk of HIV infection.
Medical tests for most conditions are primarily conducted in a clinical setting that bills insurance
companies for the services they provide on a regular basis. HIV testing and other services are
unique in that they can often take place at Local Health Departments (LHD), Community-Based
Organizations (CBO), and other Healthcare Providers (HCP) unequipped to bill public or private
payers and health plans.4 The range of settings providing HIV testing and other HIV services
makes it possible to reach a broader set of people who are at risk, but these services are
unsustainable without a dependable funding source. In addition to supporting existing services,
there is still progress to be made in terms of expanding routine HIV screening and HIV
prevention services to fill service gaps in high incidence geographic areas. These areas
experience late diagnoses, unsuppressed viral loads, and higher rates of HIV transmission.
Expanding services to address these issues will not be possible without local providers
developing the capacity for consistent funding.5
One revenue source that many LHDs, CBOs, and HCPs have yet to take advantage of is third-
party billing, including the provision of services related to HIV. Third-party billing refers to
billing Medicare, Medicaid, and private insurance for medical services provided, as opposed to
first-party billing which refers to charging patients. The National Alliance of State and Territorial
AIDS Directors stated in its 2016 HIV Testing and Billing Report that less than half of LHDs
who deliver HIV testing services have capabilities for third-party billing. Even less reported that
they require health department-supported providers to bill third party payers. The HIV Testing
and Billing Report also discovered that different venues have different rates of billing capacity.
While community health centers and HIV/ID physicians were billing 72% and 63% respectively,
only 53% of LDH clinics and 24% of CBOs are billing.6 This means that many of these
organizations are eligible for reimbursements from Medicare, Medicaid, and private insurance
companies, but lack the staff, resources, or knowledge to obtain them.
Some HIV service providers may be hesitant about billing for their services because part of their
mission is to increase the availability and utilization of important HIV services by providing
them to their clients free-of-cost. The Patient Protection and Affordable Care Act (PPACA)
requires most new health insurance plans to cover HIV testing without additional cost-sharing,
such as copays or deductibles. HIV testing is covered once per year for all beneficiaries ages 15
through 65, and for those under 15 or over 65 if they are considered to be at increased risk.
4 Erdman, Jeffrey M. 2016. “Sustaining Your Organization Through Third-Party Billing.” Illinois HIV/STD Conference. October 2016. https://www.ipha.com/content/uploads/Events/2016%20HIV%20Conf/Sustaining%20Your%20Organization%20through%20Third-Party%20Billing.pdf 5 CSFA. N.d. “3rd Party HIV Billing Development Project.” Accessed October 25, 2018. https://govappsqa.illinois.gov/gata/csfa/Program.aspx?csfa=1614 6 Nakatsukasa-Ono, Wendy. 2014. “Building Sustainability through Billing and Reimbursement.” December 1, 2014. http://depts.washington.edu/hivtcg/presentations/uploads/7/building_sustainability_through_billing_and_reimbursement.pdf
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Pregnant women are covered for three tests.7 This means even if service providers bill third-party
payers, clients can usually still receive services free-of-cost.8 If a service is not covered by
insurance, or a client does not have insurance, sliding-scale fee schedules allow providers to
determine what the cost to those clients will be, if anything.
Equipping HIV service providers with third-party billing capabilities is especially important in
the context of the financial troubles many of them face. The National Association of County and
City Health Officials reported that 48 percent of U.S. public health departments reduced or
eliminated services and jobs in recent years, and there has been a reduction in HIV grant dollars
from federal partners. LHDs are experiencing shrinking local, state, and federal budgets, and the
cost of providing preventive and clinical services such as HIV testing has been growing.
Even with the expansion of insurance coverage, LHDs and health department-supported
organizations will need to develop a way to continue providing service for both insured and
uninsured patients, which likely means they will need to develop the capacity to bill third-party
payers. In fact, one major benefit of billing third-party payers is that the revenue coming in is not
dependent on grant or government funding. If service providers are able to recoup their costs by
billing their clients’ insurance, their programs will be much more stable and sustainable than
relying on other funding sources.
HIV service providers are often, for good reason, mainly focused on increasing public health and
making services available to high-risk populations. Even so, a healthy consideration to the
business-side of their operations will allow them to continue their mission in the long run. When
it comes to the establishment of third-party billing, LHDs, CBOs, and HCPs can take on the
complicated process on their own with the creation of an in-house medical billing department, or
they can consider outsourcing the process to a company that specializes in medical billing.
What is Medical Billing Outsourcing?
For healthcare providers offering critical services, optimization of the medical billing process is
extremely important for continued operations. Medical billing is commonly referred to as
revenue cycle management (RCM), which is an accurate designation as there is much more to
billing than just sending out a bill, and the process has gotten much more difficult in the past 15
years. Getting a bill to a payer is not enough to guarantee a payment. There are many
interdependent, critical tasks necessary for billing, and there are many more obstacles to getting
paid in an accurate and timely manner now than there used to be.9
While LHDs, CBOs, and some HCPs may differ from a typical medical practice in that they can
receive grant money to fund their services, developing third-party billing capacities should still
7 Florida Department of Health. 2016. “A Provider’s Guide to Reimbursement and Sustainability for HIV Testing in Florida Healthcare Facilities.” December 2016. http://www.floridahealth.gov/diseases-and-conditions/aids/prevention/_documents/Counseling_testing/hiv-testingsustainabilityguide-dec2016-revisions.pdf 8 HIV.gov. 2018. “The Affordable Care Act and HIV/AIDS.” Last modified October 24, 2018. https://www.hiv.gov/federal-response/policies-issues/the-affordable-care-act-and-hiv-aids 9 Roberts, Lucien W. 2012. “Is it Time To Outsource Your Practice Billing?” Physicians Practice. April 18, 2012. http://www.physicianspractice.com/pearls/it-time-outsource-your-practice-billing
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be a priority in order to have a more stable, dependable revenue stream. There are many
challenging components of medical billing that may be deterring organizations from prioritizing
it. These include the complex collections process, continual declines in reimbursements, and
having to satisfy Health Insurance Portability and Accountability Act (HIPAA) requirements.10
With all of the complicated components of medical billing, some LHDs and health department-
supported organizations choose to contract with external companies for their third-party billing
services. This process is called medical billing outsourcing. These medical billing companies
receive service data from providers, and then conduct billing activities on their behalf. In an
environment where many organizations are receiving none of the revenue they could potentially
receive from third-party payers for the services they are already providing, outsourcing may offer
an option for them to bill those payers without having to go through the process of setting up an
in-house medical billing department from scratch. For those that have some capacity for third-
party billing already, outsourcing could still help fill in the gaps, so they can bring in more
revenue overall.
Medical billing outsourcing has been on the rise, and the market is projected to exceed $16
billion by 2024. In-house billing may be preferred by some providers, but outsourcing is growing
in popularity.11 A 2015 study reported that the majority of independent physicians now believe
outsourcing is the best choice for billing, and outsourcing is expected to grow between 8 and 9
percent within the next decade.12 The major driving factors of the market include constantly
changing healthcare regulations and efforts to decrease in-house processing rates and increase
revenue growth. The major factors restraining growth of the outsourcing market are high rates of
technology adaptation, making the billing process more accessible, and the reluctance of some
providers to make patient records available to a third-party source.
In-House vs Outsourced Process
Figure 1 – In-House Medical Billing Process
10 Invensis. N.d. “Medical Billing Services”. Accessed October 25, 2018. https://www.invensis.net/healthcare-bpo/outsource-medical-billing-services 11 Bay, John. 2018. “Medical Billing Outsourcing Market is Determined to Cross US $16 Billion By 2024.” Herald Keeper. May 21, 2018. http://heraldkeeper.com/market/medical-billing-outsourcing-market-determined-cross-us-16-billion-2024-64641.html 12 Apex EDI. 2018. “How the Medical Billing Outsourcing Market is Going to Expand.” July 14, 2018. https://www.apexedi.com/how-the-medical-billing-outsourcing-market-is-going-to-expand/
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Figure 2 – Outsourced Medical Billing Process
In-house and outsourced medical billing processes are similar, but differ because of who is
completing the work. Figures 1 and 2 above depict the steps involved in in-house and outsourced
medical billing from the perspective of a provider. The three major parties involved in the in-
house process are the provider, the clearinghouse, and the payer.
Provider: An organization that provides medical services. A provider could be a hospital
or a private medical practice, but the providers most relevant to the issue of HIV services
and the lack of third-party billing are LHDs, CBOs, and some other HCPs.
Clearinghouse: A company that forwards claims information from healthcare providers
to insurance payers. The clearinghouse also performs claims scrubbing, in which they
check the claim for errors and confirm its compatibility with the payer software.13
Payer: The entity paying for the medical services, such as Medicare, Medicaid, or private
insurance.
When conducted by an in-house billing department, the process begins with employees
collecting and verifying patient insurance information, and then generating a superbill for the
patient’s visit. The superbill contains codes for the diagnosis and treatments that occurred during
the patient’s visit, along with other information, and is used by insurance companies to determine
if a claim is legitimate. If the provider has an Electronic Health Records (EHR) system and/or
medical billing software, they can enter the information from the superbill into the software and
electronically submit claims to a medical billing clearinghouse. If not, they will submit a paper
claim. The clearinghouse verifies the claim, scrubs it of errors, and sends it on to the payer. After
review, the payer will notify the clearinghouse if the claim is accepted or rejected, which will
then notify the payer. When claims are rejected, the provider’s staff will gather the necessary
13 Dummies. N.d. “What is the Function of the Clearinghouse in Medical Billing?” Accessed October 25, 2018. https://www.dummies.com/careers/medical-careers/medical-billing-coding/what-is-the-function-of-the-clearinghouse-in-medical-billing/
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additional information and resubmit them. The clearinghouse charges the provider for each
submission, even if it is a correction. While this is the basic process for billing, before the
provider reaches this stage, it has to set up a medical billing department.
There are many components to creating an effective medical billing department. LHDs, CBOs,
and HCPs should consider all of the steps involved and, based on a critical consideration of their
own capabilities, decide if completing each step in-house is a realistic, and manageable,
possibility. Some aspects may seem daunting, in which case providers should strongly consider
outsourcing as a means to attain billing capacity. Even if in-house billing is a manageable
possibility, it is still important to weigh whether outsourcing could offer benefits in terms of
ease, increased revenue, or any other of the provider’s priorities.
There are several investments a health service provider should consider making when developing
an in-house billing department. It can be helpful to have at least one staff member specifically
dedicated to billing. For some HIV service providers, hiring a medical billing expert could be
challenging under their current budget, but if they do not, the burden of billing tasks will fall on
other staff members who are already busy with their own operations, and might not have the full
training and understanding of billing and coding.14
Once billing staff are established, providers need to create an optimal fee schedule, which sets
the price for the services provided and allows the provider to work with private and public
insurance to determine reimbursement levels. There are three steps to establishing a fee
schedule.15
1. Determining the cost of performing each service, considering supplies, staff payments,
and other costs associated with the service. This analysis must also take into account
other funding sources that may cover some of the costs, such as tax dollars, grants, and
volunteers. In addition, providers of public health services should attempt to settle on a
fee that is as low as possible while still covering the cost of the service, and also not too
high as to become a barrier for clients.16
2. Determining the standard fee for each service in the region of the provider. The Centers
for Medicare and Medicaid Services (CMS) are typically a good benchmark. Providers
may find it easiest to use those fees, especially if the majority of their clients have
Medicare or Medicaid. If, however, a provider determines that their costs are not covered
by the CMS rate, it can be advantageous to still set their own fees because private
insurance companies will often reimburse at higher rates.
14 Parkinson, Alexander. 2014. “How to Build the Perfect Public Health Billing Department.” September 24, 2014. https://www.smarthealthclaims.com/blog_post/how_build_perfect_public_health_billing_department 15 Ramkissoon, Nar. 2013. “The First Step to Sustainable Revenue is Setting Your Fee Schedule.” August 13, 2014. https://www.smarthealthclaims.com/blog_post/first_step_sustainable_revenue_setting_your_fee_schedule 16 Smith, Denise, Athina Kinsley, Christella Leyvas, and Ann Walker. 2011. “California’s Innovative Immunization Billing Project Plan.” Kearn County Public Health Services. December 31, 2011.
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3. Setting the fees and creating a list of all provided services and their specific fees.
Fee schedules can be very comprehensive, listing every service and corresponding fee, or a more
simplified set of guidelines. While providers offering only a small number of services, such as a
community-based organization providing only HIV testing and preventive services, setting an
individual fee for each service may make the most sense, but for other venues offering many
services, such as many LHDs, it may be more efficient to simply follow other set guidelines. For
example, in lieu of determining a specific fee for every service, Merced County Health
Department stated the following as their fee schedule:
All clinical fees will be set at the published Medicare Fee Schedule. For those
services where no Medicare rate is established, fees will be at the greater of
Family PACT or Medi-Cal rates. In those cases where there are no published
rates in any of these programs, fee will be established at costs plus a fifteen (15)
percent administrative fee.
After the fees have been established, many LHDs and supported organizations may want to set
up a sliding scale fee schedule, allowing the fees for mandated services to be reduced or waived
if a client is unable to pay. While HIV testing should be covered by insurance, for clients without
insurance, a sliding scale fee schedule will make it possible to waive fees so those clients can
still access important HIV services.
Next, the provider will begin the contracting and credentialing process, working with payers in
their area to secure reimbursement rates. This process can be long and complicated, meaning it is
important to have an experienced and skilled expert who can negotiate the best rates. Enrollment,
the combined process of credentialing and contracting, encompasses the entire process of
becoming eligible to receive reimbursement from a third-party payer. For some payers,
credentialing can include a contract, a letter of intent, a memorandum of understanding, and final
enrollment. Credentialing is required by private insurance, Medicare, and Medicaid. The process
of credentialing includes the payer’s review, validation, and eventual approval of demographic,
educational, professional licensure, and other pertinent information about the provider. Once
credentialed, the payer grants approval and permission for the provider to then contract with
them.
Contracting is the process of establishing an agreement between a health plan and a health care
provider. A contract will include details about the services that will be provided, payment rates,
filing timelines, and any other obligations. Contracts are not guaranteed and the negotiation of a
contract can take two to four months, but they are very important, and can have a great impact on
revenue. When a provider builds a relationship with a private insurer, and becomes an in-
network provider, members become more likely to use that provider for services. The increase in
customers, along with the trend of private plans reimbursing at higher rates than Medicaid, is
likely to increase revenue, especially for LHDs or CBOs who may currently have few patients
with private insurance.17
17 Jefferson County Public Health. “Costs.” Local Health Jurisdiction Immunization Billing Resource Guide. page 11-12.
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With contracts established, the provider should focus on developing overall standard operating
procedures, encompassing patient intake and claims processes. Patient intake requires the
development of procedures for appointment scheduling/check-in, collecting required information
for billing, registration forms, encounter forms or superbills, insurance verification, and a
formalized check-out process. The claims process will involve claims submission, posting
payments, follow-up of claims, and management of denied claims.18 The in-house process will
typically include registration with a clearinghouse,19 which will charge a fee per claim, with a
minimum charge.20 Before claims can actually be submitted, the provider will need to build
capacity for coding.
Medical coding is the process of transforming the descriptions of diseases, injuries, and
procedures into numeric or alphanumeric designations, also known as code numbers. Accurately
coding data is very important for claims reimbursement. There are several coding nomenclatures
used in the healthcare industry, including the Current Procedural Terminology (CPT) codes
assigned to every service, and the Healthcare Common Procedural Coding System (HCPCS)
codes which are monitored by the Centers for Medicare and Medicaid Services (CMS), and
either identical to the CPT codes or specific to medical suppliers other than physicians such as
ambulance services and durable medical equipment vendors.
In addition to the codes for services performed, there is also the International Classification of
Diseases (ICD) to code diagnoses and classify diseases and a wide variety of signs, symptoms,
abnormal findings, complaints, social circumstances, and external causes of injury or disease.
The industry is currently using the tenth version, ICD-10, but will start reporting using ICD-11 in
January 2022.21 In order to provide supplemental information or adjust the description and
details of a procedure or service, CPT Modifiers and HCPCS Modifiers are used.16 Complying
with these codes, and keeping up with changes, can be challenging, but for some providers who
offer only very few, specific services, the process may be more manageable. For example, if HIV
screening is the only medical service provided by an organization, the billing staff will only have
to master the relevant codes for that service. Figure 3 below lists some of the relevant ICD-10,
HCPCS, and CPT codes, though it is not a comprehensive list.17
18 NACCHO. 2014. “Billing for Clinical Services.” 2014. https://www.naccho.org/programs/community-health/other/billing-for-clinical-services 19 Alpers, Adam. 2010. “In-House vs. Outsourced Billing Operations: Which Is Best?” Physicians Practice. October 19, 2010. http://www.physicianspractice.com/house-vs-outsourced-billing-operations-which-best 20 STDTAC. N. d. “In-House or Outsourced Billing.” Billing Toolkit. Accessed October 25, 2018. http://stdtac.org/wp-content/uploads/2016/05/In-House-Or-Outsource_STDTAC.pdf 21 World Health Organization. 2018 “Classification of Diseases (ICD).” Last modified June 18, 2018. http://www.who.int/classifications/icd/en/
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Figure 3 – ICD-10-CM and HCPCS Codes and CPT Coding Modifiers Relevant to HIV
Services
Consider a hypothetical coding scenario for an HIV-service provider. A 66-year-old gay man
visits his LHD requesting an HIV test. He indicates sexual risk behaviors, and is covered by
Medicare. The staff of the LHD advise him on how to decrease risk for HIV transmission, and
order either a conventional HIV test or a rapid HIV test.
The ICD-10-CM Diagnosis Codes for the patient’s visit are Z11.59 with Z72.89 and
Z71.7. The diagnosis codes are important because without the code indicating “problems
related to lifestyle”, the test would not be covered by Medicare due to the patient’s age.
The HCPCS code for the test could be G0432, G0433, or G0435 depending on which test
is ordered.
ICD-10-CM Diagnosis Codes
Z00.00 Encounter for general adult medical examination with abnormal findings
Z11.3Encounter for screening for infections with a predominantly sexual mode of
transmission
Z11.4 Encounter for screening for human immunodeficiency virus (HIV)
Z11.59 Encounter for screening for other viral diseases
Z72.89 Other problems related to lifestyle
Z71.7 Human immunodeficiency virus (HIV) counseling
Z21 Asymptomatic human immunodeficiency virus (HIV) infection status
R75 Inconclusive laboratory evidence of human immunodeficiency virus (HIV)
B20 Human immunodeficiency virus (HIV) disease
B97.35Human immunodeficiency virus, type 2(HIV 2) as the cause of diseases
classified elsewhere
Z09Encounter for follow-up examination after completed treatment for
conditions other than malignant neoplasm
Z72.51 High risk heterosexual behavior
HCPCS Codes for Billing Medicare
G0432Infectious agent antibody detection by enzyme immunoassay (EIA)
technique, HIV-1 and/or HIV-2, screening
G0433Infectious agent antibody detection by enzyme-linked immunosorbent
assay (ELISA) technique, HIV-1 and/or HIV-2, screening
G0435Infectious agent antibody detection by rapid antibody test, HIV-1 and/or
HIV-2, screening
CPT Coding Modifiers
92
Used when laboratory testing is being performed using a kit or
transportable instrument that wholly or in part consists of a single use,
disposable analytical chamber
33
Used to indicate a preventive service for which a patient's co-pay,
deductibe or co-insurance is waived. Apply modifier 33 for private payers
only.
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For clients with private insurance other than Medicare, provider staff will also need to be
familiar with the additional CPT codes for test products, test administration, office service, and
counseling.7
It is also important to develop a coding quality assurance system for any in-house medical billing
department. Coding errors and omitted information can delay payments to providers. An
uncertainty can cause a claim to be moved out of the automated system and denied or sent into
manual processing, which is more costly and time consuming. Coding errors vary, but invalid
diagnosis codes, invalid member identification numbers, incomplete claims, and inaccurate
information such as location of services and misspelling of name, date of birth, address, and
insurance policy ID are common.
One of the most common reasons for claim denial is duplication. Providers need to be patient
and wait for a response before filing a secondary claim, as returning unearned reimbursement
due to duplicate payment may result in a higher administrative cost than the payment total itself.
In addition, some healthcare services are bundled into a single package—such as lab profiles
with HIV and additional tests—and will not always qualify for separate reimbursements.
Timeliness is also very important, as insurers will reject claims not submitted within the
permitted timeframe, and it is best to be well ahead of the deadline in case errors need to be
addressed. When denial inevitably occurs, it can be worthwhile to identify the error and resubmit
because there is still a good chance of receiving payment.22
Public health service providers should also consider filing claims electronically and signing up
for Electronic Funds Transfer, which can expedite the payment of claims. While paper claims
have not yet completely diminished, providers should be prepared to eventually abandon paper
claims. Electronic Health Records (EHR) software makes in-house billing easier, and, paired
with integrated practice management systems, could be one factor that keeps billing in-house.
When it comes to LHDs, EHR systems are not pervasive. A 2015 study indicated that 42% were
using an EHR, meaning 58% were still dealing with paper records.23 Quality billing software
increases the ease of billing processes by providing helpful features for:
Claim processing. Crucial for the immediate reporting of insurance claims and fast
receipt of reimbursement.
Eligibility verification. Determining whether a patient has health insurance should
happen before procedures take place, but many customers do not realize they have lost
coverage until after the fact, making verification abilities very useful.
Electronic superbills. Good software will automatically create an electronic superbill with
each new appointment, which documents all charges pertaining to the visit from the
22 Brown, Julia. 2015. “Five Ways To Ensure Clean Claims.” Behavioral Healthcare Executive. March 5, 2015. https://www.behavioral.net/article/5-ways-ensure-clean-claims 23 Shah, Gulzar H., and Karmen S. Williams. “Electronic Health Records and Meaningful Use in Local Health Departments: Updates From the 2015 NACCHO Informative Assessment Survey.” Journal of Public Health Management and Practice. September 30, 2016. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5050007/
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patient’s initial appointment to checkout. 24 These make it much easier to track and
understand open claims.
Electronic remittances. Allowing direct interfacing with insurance companies to track
data effortlessly and accurately by explaining the reimbursement decision of the payer.25
Payment reminders. Electronic bill collection notices replace the collection letter,
allowing for more regular reminders about open bills.
If a provider chooses to turn to outsourcing for billing, either fully or partially, they will follow a
different process, which is more straightforward for the staff of the provider. When outsourcing,
providers still have to establish fee schedules and clinic policies, although some medical billing
companies will also help with, or review, fee schedules. After that, the RCM partner can take
care of the credentialing and contracting process, and then get started billing. Superbills are
simply sent to the medical billing service, and they take care of data entry, coding, and claim
submission, as well as interactions with the clearinghouse and insurance companies. The billing
service will follow up on rejected claims, pursue delinquent accounts, and send invoices directly
to patients, when necessary.
If the provider is using EHR software, the process becomes even easier, as information from the
patient’s superbill is stored in the EHR and is electronically transmitted to the billing company,
removing the need for the provider to send paper records. It also eliminates an extra round of
data entry, leading to greater accuracy. Despite the advantages, there can be issues with
integration between the EHR software and the billing service. For integration to work
effectively, the type of data being exchanged has to match or be converted to a compatible
format. Some billing services even include access to an electronic health records system or
practice management software, which can be especially helpful for providers who do not already
have EHR software, and by using the software provided by their billing partner, avoid issues of
interoperability.26
Outsourcing removes the burden of many billing tasks, but does necessitate the process of
selecting and contracting with a medical billing service provider. In the process of selecting a
billing partner, providers should consider the costs of the service, but also what exactly the
billing partner offers and if that aligns with their specific needs. Costs vary based on the size and
focus of the medical provider, but most billing companies charge a percentage of monthly
revenue as payment, ranging from 4-12% of net collection,27 with the industry average at 7%.28
LHDs, CBOs, and HCPs should find out what specific services are included in the monthly
24 TIMS. N.d. “Patient Billing… with Workflow”. Accessed October 25, 2018. https://www.cu.net/audiology/features/electronic-superbill 25 EDI Support Services. “Benefits of Electronic Remittance Advice.” Accessed October 25, 2018. http://www.edissweb.com/cgp/registration/era-benefits.html 26 Uzialko, Adam C. 2018. “Choosing a Medical Billing Service: A Buyer’s Guide.” Business News Daily. August 9, 2018. https://www.businessnewsdaily.com/10982-choosing-medical-billing-service.html 27 MedPro Services. N.d. “Pricing.” Accessed October 25, 2018. http://medproservices.net/pricing/ 28 Thorman, Chris. N.d. “Should Your Practice Outsource Medical Billing?” Physician News Digest. Accessed October 25, 2018. https://physiciansnews.com/2010/06/17/should-your-practice-outsource-medical-billing/
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percentage, and whether clearinghouse fees are included in the percentage or are an additional
charge.
Most companies scrub claims for errors before processing them, and many follow up with
insurance companies to confirm claims are accepted, but different companies offer differing
levels of services. Because of this variation, providers need to consider what services will benefit
them the most, as well as if they trust the company to perform those services well. For example,
if a CBO that offers HIV testing decides coding is too complicated for their staff to handle in
addition to their current responsibilities, and decides to look for a billing company to perform
coding for them, they need to find out if the billing service has certified coders on staff and if it
is up to date with the most current coding system. It is also important to make sure the billing
partner is communicative, responsive, and helpful. Providers may want to make sure that they
can access information about their revenue cycle at any time, what they can expect from the
service when a mistake is made, and if the service will provide them with copies of any
documents it receives from payers.26
Advantages and Disadvantages of Outsourcing Medical Billing
There are both advantages and disadvantages to outsourcing medical billing. Medical billing can
be a demanding and challenging task for small medical providers. For practices that already have
in-house medical billing systems in place and working efficiently, the cut taken by an
outsourcing company may not be worth it. In the case of trying to increase third-party billing for
HIV service providers with no current billing capacity, however, this is typically not a factor.
Implementing third-party billing can be overwhelming, which is likely why so many providers
have yet to do it. For those who are currently missing out on 100% of the reimbursements
available to them, offering up a small percentage of the revenue for medical billing capacity
could be a worthy exchange. Apart from the simple factor of outsourcing making medical billing
possible for some providers who may not otherwise be able to manage it, there are also many
other benefits of outsourcing in comparison to in-house medical billing:
1. Reduced Errors. Because professional medical billing companies deal with billing
procedures every day, they experience less denied and rejected claims. Even for
experienced in-house medical billing departments, avoiding errors is difficult, and for
those with no billing experience, like many HIV service providers, errors are likely to be
common.
2. Increased Revenue. Even for the LHDs, CBOs, and HCPs that have in-house medical
billing, the operation requires expenses of staff salaries and benefits, supplies, furniture,
billing software, and computer equipment. Depending on the attributes of the provider
and the efficiency of their in-house billing operations, outsourcing can often actually save
money, even when accounting for the cut taken by the outsourcing company, because the
company is able to take advantage of economies of scale that single providers cannot.
3. More focus on patient care and improved patient satisfaction. This effect is
specifically advantageous for smaller groups because with limited staff, the reduced
burden from not having to take care of billing can increase productivity, efficiency, and
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employee morale.29 For an HIV service provider trying to implement third-party billing,
the staff-burden of creating a billing department could distract from patient care and work
against the mission of the organization.
4. Improved Cash Flow. When a professional company is taking care of billing, there are
no interruptions to the process, resulting in a more steady flow of claims going out and
cash coming in. This more predictable cycle can make budgeting easier for providers. In
addition, operations and cash flow can be majorly stalled even when just one employee
takes a sick day, goes on vacation, or quits; a problem that doesn’t affect larger billing
companies.
5. Ensured billing compliance. Medical billing is an ever-changing industry, and the
constant changes can be difficult to keep up with for HIV service providers who want to
be primarily focused on patient care.30 Medical billing companies, however, prioritize
staying up-to-date with industry changes.
6. Liability Avoidance. In-house medical billing departments can be at risk for
embezzlement or employee neglect, especially if overseen by someone who does not
fully understand the billing process, as the departments of HIV service providers with no
current billing capacity could be. Outsourcing companies, however, assume the liability
for their own employees, and have a full understanding of the process.
7. Increased transparency. Outsourcing companies should be able to provide
organizations with comprehensive performance reports. Receiving a periodic analysis of
accounts receivable along with recommendations on how to improve financial
performance can be extremely helpful for LHDs, CBOs, and HCPs that may not have
previously given much consideration to optimizing business performance.31
8. Enhanced consistency. Not only is it easier for outsourcing companies to maintain
consistency and avoid mistakes, they are contractually obligated to perform certain
services with a certain degree of success.
9. Established relationships. A biller at a medical provider interacts with all payers and is
essentially anonymous to all of them, especially if new to medical billing. A biller at a
service, however, deals with payers consistently and may have personal relationships
with them, or at least experience dealing with them. This can make the entire process
more efficient, and expedite problem resolution.32
29 Hicks, Joy. 2018. “Pros and Cons of Outsourcing Your Medical Billing.” Verywell Health. September, 16, 2018. https://www.verywellhealth.com/advantages-of-outsourcing-medical-billing-2317424 30 Flatworld Solutions N.d. “10 Reasons to Outsource Medical Billing.” Accessed October 25, 2018. https://www.flatworldsolutions.com/healthcare/articles/reasons-to-outsource-medical-billing.php 31 Care Cloud. “In-House vs. Outsourced Medical Billing: Pros and Cons.” Accessed October 25, 2018. https://www.carecloud.com/continuum/in-house-vs-outsourced-medical-billing-pros-and-cons/ 32 Stryker, Carol. 2015. “10 Reasons to Outsource Medical Billing.” Physician Practice. June 24, 2015. http://www.physicianspractice.com/managers-administrators/10-reasons-outsource-medical-billing
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Apart from the strengths of outsourcing, there are also some disadvantages for providers to
consider, or at least be aware of:
1. Little Control. When outsourcing, providers do not have control over the employees
performing their billing activities. Some offices may not want to lose direct supervision
over the work that is so vital to their business. This factor is especially impactful for
offices that currently have trusted long-term employees conducting medical billing, but is
likely less important for small HIV service providers who currently have no billing
operations.
2. Risk to patient satisfaction. Though outsourcing can help practices maintain focus on
patient care, leading to improved patient satisfaction, patients tend to like being able to
pay in the doctor’s office and build relationships. They may be less satisfied when they
are only able to discuss important matters over the phone. For HIV services, such as HIV
testing which typically requires no payment on the part of the patient, this may be
relevant only rarely.
3. HIPAA privacy and security breaches. Though still rare, with more people accessing
confidential information, there is a greater risk for a breach.
4. Possible hidden costs. Outsourcing still requires time spent in preparation and
coordination, and the cost of legal feels and potentially hiring a liaison. Additionally,
providers should read contracts carefully to be sure they know exactly what they will be
expected to pay.
5. Return on investment. For providers who have already invested in training medical
billers and purchasing billing technology, switching to outsourcing would mean losing
the already expended time and money. This is not an issue for those who have not yet
invested in revenue cycle management.
6. Variable cost. Most medical billing companies charge a percentage of collections,
meaning the more that is brought in, the more that has to be paid out. This can make
budgeting difficult, but could also be positive. With in-house billing, costs can only be so
low, regardless of how much business occurs, whereas with outsourcing, if the provider
does not do much business, they do not have to pay much for billing. This is especially
important for some organizations who may provide only a few HIV-related services.
Additionally, the percentage system means that the billing service and the provider’s
interests are aligned—incentivizing the billing company to have high collections.
Business Considerations
Different attributes of organizations will result in different outcomes. The following hypothetical
cost analysis demonstrates the factors at play in determining if outsourcing is cost-effective in
comparison to in-house billing. The hypothetical LHD in this scenario has ten employees on staff
and hires two medical billing specialists for its in-house medical billing department. This LHD
offers many service in addition to HIV testing, such as immunization shots, treatments for acute
and chronic illnesses, blood pressure screening, pap smears, family planning services,
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tuberculosis treatment, nutrition services, and child health services.33 They file 60 insurance
claims per day (~15,000 per year), with $80 billed per claim on average (~$1,200,000 per year),
and have a 60% collections rate.
The billing department costs for in-house are based on the median salary of two medical billing
employees ($80,000) and their healthcare costs ($9,000), federal and state taxes ($12,000), and
training costs to keep up to date with the latest industry developments ($2,000). It also includes
$10,000 to account for the costs of statement paper, office space, office hardware, and other
miscellaneous costs. The outsourced billing department costs include four hours of time per
week for managing billing tasks at approximately $15/hour adding up to around $3,000 per year
in administrative costs due to follow-up required even with the best of medical billing services.
The in-house software and hardware costs reflect an annual cost of approximately $7,000 for
practice management software, and $500 for computer hardware costs. It is worth noting that this
does not include the upfront cost of a software system, just the annual costs. The $500
outsourced cost is for a computer and printer which the practice would need for interaction with
the billing service and printing documents.
The direct claims processing costs for in-house account for the fees the LHD would pay for
submitting 15,000 claims per year at approximately $0.18 per claim add up to $2,700 annually.
The outsourced cost is, of course, what the provider pays to the outsourcing company, based on
the industry average of 7% of total collections.
The percentage of revenue that a provider collects varies widely, but for this hypothetical
situation, the provider is collecting 60% of what it bills, which is in the range of an average in-
house billing department according to industry experts.28 When switching to outsourcing,
providers can typically expect a 5-15% increase in collections. With 10% in the middle of those
estimates, the hypothetical collections rate for the provider in this scenario is 70%.
33 Tennessee Department of Health. N.d. “Services Offered by Local Health Departments.” Accessed November 5, 2018. https://www.tn.gov/health/health-program-areas/localdepartments/lrhd/local-services.html
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Figure 4 – LHD Cost Analysis
As Figure 4 shows, in this example, outsourcing results in lower billing department costs, lower
software and hardware costs, and higher percentage of billings collected. On the other hand, it
also results in higher direct claim processing costs. In this scenario, in-house billing is not as
cost- effective as outsourcing, even though the provider has to pay their billing partner a portion
of their collections. If this example were representative of a real HIV service provider that is
currently billing no third-party payers, it would likely make financial sense for that provider to
outsource from the start. By doing so, they would not only be able to avoid the process of
creating an in-house billing department, they would also be receiving more revenue overall.
Though the cost of the in-house department is substantial, with the high volume and value of
claims in this scenario, the real factor making outsourcing more cost-effective is the increase in
billings collected. If this LHD had reason to believe that they could reach 70% in-house, the
advantage of outsourcing would be greatly diminished.
For smaller providers, outsourcing could be even more financially advantageous due to the
avoidance of staff and technology investments. Figure 5 shows another cost analysis for a
hypothetical CBO. The only medical service this CBO offers is HIV testing. They administer
about 20 claims per day (~5,000 per year), $50 billed per claim on average (~$250,000 per year),
and have a 60% collections rate. They hire only one medical billing employee, and with the
smaller volume and variety of claims, they have half the billing department costs for both in-
house and outsourced. The software and hardware costs are fixed despite having fewer billing
activities. The direct claims processing costs for in-house are $900 per year at $0.18 per claim
and the outsourced cost of 7% of collections adds up to $12,250.
Costs In-House Outsourced
Billing department costs 113,000.00$ 3,000.00$
Software and hardware costs 7,500.00$ 500.00$
Direct claim processing costs 2,700.00$ 58,800.00$
Collections costs 123,200.00$ 62,300.00$
Collections
Claims filed 1,200,000.00$ 1,200,000.00$
% of billings collected 60% 70%
Collections 720,000.00$ 840,000.00$
Collections, net of costs 596,800.00$ 777,700.00$
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Figure 5 – CBO Cost Analysis
In this case, collections, net of cost, with outsourcing are almost twice as much as those of the in-
house department. Even if the in-house and outsourced departments reached the same level of
collections, outsourcing still offers a large advantage. Due to the small size of the provider,
investing in billing staff and equipment takes a large cut out of collections. An outsourcing
company on the other hand, is able to take advantage of economies of scale and therefore charge
much less for their service than an in-house department would have to pay to perform it
themselves.
These are just examples of the considerations involved, however, and how the distribution of
costs can affect a provider’s collections net of cost. Providers should conduct their own cost
analyses based on their organization to find out which revenue cycle management strategy is
most cost-effective for them, as some may discover in-house to have the financial advantage. It
is also important, however, to keep in mind that for a provider who currently lacks any third-
party billing capabilities, and therefore has $0 collections net of cost, outsourcing still represents
a significant increase in revenue even if cost analysis were to show that in-house billing would
represent a larger increase. In addition, the relative ease compared with in-house processes could
make outsourcing preferable for some providers, despite the outcome of cost analysis.
Conclusion
With both advantages and disadvantages to outsourcing medical billing, LHDs, CBOs, and HCPs
need to also consider their organization’s unique characteristics to determine which option is
right for them. Whether a practice should outsource medical billing or keep the process in-house
varies based on more than just cost analysis. There are also several provider-specific factors that
should be taken into consideration when deciding whether to outsource medical billing:
1. Is the current billing process efficient? Many HIV service-providers have no current
medical billing process, making outsourcing an easier way for them to begin billing. For
those that do have some in-house billing, however, it is important to consider if that
process is efficient, or if it might be improved by partial or total outsourcing.
Costs In-House Outsourced
Billing department costs 56,500.00$ 1,500.00$
Software and hardware costs 7,500.00$ 500.00$
Direct claim processing costs 900.00$ 12,250.00$
Collections costs 64,900.00$ 14,250.00$
Collections
Claims filed 250,000.00$ 250,000.00$
% of billings collected 60% 70%
Collections 150,000.00$ 175,000.00$
Collections, net of costs 85,100.00$ 160,750.00$
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2. Is there high staff turnover? Turnover in a billing department is very common, and
results in very damaging slowdowns.
3. Is the provider large or small? The larger the provider is, the more it benefits from
economies of scale itself. Investments in software become more worthwhile, and the
larger a billing department becomes, the less staff turnover impedes operations. Most
HIV service providers that have not already developed billing capacity are not very large,
meaning outsourcing is more likely to be a good option for them. Those on the larger
side, however, that may simply not have maximum revenue cycle management, may
want to consider fully investing in their billing department, or else hiring an outsourcing
company to help them increase capacity.
4. Is the provider tech savvy? In-house billing demands an investment in practice
management software and training for staff, and there will be occasional software updates
and technical issues. If these will be great obstacles, it may be better to outsource.
Considering less than half of LHDs even have electronic health records systems, trying to
take on all the new technological requirements of in-house billing might be too much.
5. Is the provider new? New providers have plenty to learn and focus on without adding
the complications of revenue cycle management to their list. Outsourcing billing right off
the bat can give them relief from the stress of launching a new service. If the provider is
not new, and has already invested in technology and staff for billing, switching to
outsourcing could mean losing out on that investment. These providers may want to
consider remaining in-house or determining some aspects they would like to keep in-
house to maximize their investment, while still allowing a billing partner to take over in
areas they are lacking.34
6. What are the main priorities of the provider? Many individuals at LHDs, CBOs, and
HCPs are passionate about public health and serving their clients, but may not be strong
on the business side of operations. Outsourcing can free them from spending time on
administrative/clerical work, allowing them to focus on their strengths.
7. Can an outside company add value that cannot be produced in-house? This could be
experience, continuity, or results. For example, maybe in-house or outsourcing
procedures would cost the same for a practice, but they appreciate the greater consistency
of revenue with outsourcing, or they appreciate not having to worry about hiring billing
staff, or the reports (analyses) provided by the outsourcing company make the choice
worthwhile to them.
Outsourcing has moved away from being an “all or nothing” affair due to technology that has
become available in the last few years allowing organizations to take a hybrid approach to
revenue cycle outsourcing. The best outsourced medical billing firms design their offerings with
an understanding that medical providers face unique constraints depending on the services they
34 Gibson, Harold. 2015. “Can Outsourcing Medical Billing Process Maximize Your Revenues?” June 30, 2015. https://www.m-scribe.com/blog/is-your-medical-billing-process-maximizing-revenues
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offer. RCM partners should be approachable, empathetic, and available to help firms resolve
their unique challenges. While some providers may want their billing company to handle every
aspect of revenue cycle management, others may just want the company to fill in the gaps or add
value to their own billing approach. Aspects of the process performed successfully in-house can
remain in-house, while aspects lacking resources, knowledge, or efficiency can be outsourced to
the benefit of everyone involved.35
While there are still some medical billing companies with take-it-or-leave-it propositions, there
are now also many companies that will allow the provider to decide which functions to outsource
and which to keep in house.9 With the revenue that HIV providers stand to gain from billing
third-party payers, they should be seriously considering implementing billing operations,
weighing the pros and cons of outsourcing as a tool that could make their transition easier.
Providers can evaluate the processes for in-house billing compared with outsourced billing and
determine the extent to which they would like to partner with an RCM partner in their
implementation of third-party billing.
35 Allzone MS. 2018. “The Changing Role of Revenue Cycle Outsourcing.” February 7, 2018. http://allzonems.com/the-changing-role-of-revenue-cycle-outsourcing/