Overcoming Common Billing Challenges in Small Practices

The healthcare sector in the United States is growing fast. And why not, because it is also among the most profitable business domains. That’s why many individual physicians and families are now trying to get in the business and start their own practices. However, these small practices don’t have many resources and face a lot of issues, especially when it comes to medical billing.

Every billing error or even a delayed payment is not independent. They create a whole set of problems that you continue to deal with for months to come. Every aspect of your practice, including staff management, patient satisfaction, and materials supply, is affected by it. That is not the whole problem. Denied claims are one of the biggest sources of revenue leaks and can cause a loss of millions of dollars if left unchecked.

The good news is that these billing challenges can be dealt with easily if you know how the way. That’s what this blog is all about. With the help of this guide, we will tell you how to handle the billing problems in your small practice. So, let’s start.

The Scale of the Problem

Before we jump to the solutions, let’s first discuss just how severe the problem really is.

To be honest, the stats and the market data paint a very concerning picture. You might not believe it, but data suggests that 80% of all medical claims have errors, and 20% of them are denied on the first try.

These are not just denied claims; this is money leaving your pocket. The denials create a cascading effect through the revenue cycle.

And what’s worse is that when a denial occurs, providers become stuck between the decision of whether to resubmit the claim or not. Why?  Because reworking a single denied claim can cost as much as $118.

For small practices operating on thin margins, these additional costs can quickly erode profitability and threaten long-term viability.

Top Billing Challenges

Now that we know how severe the billing issues can be for small practices, it is time to discuss the issues themselves. The following are the top 3 billing hurdles faced by practices:

High Claim Denial Rates

Claim denials represent one of the most significant threats to practice revenue. Current data shows that 32% of denials stem from coding issues, while 86% of all denials are potentially avoidable with proper procedures and attention to detail.

The root causes of claim denials often include:

• Incorrect or incomplete patient demographic information
• Missing or invalid authorization numbers
• Coding errors and mismatched procedures
• Insufficient documentation to support services rendered
• Timing issues with claim submission deadlines

Staffing Shortages and Turnover

Another big problem in healthcare billing is the shortage of staff and trained billers. During our research, we found that studies indicate a 40% turnover rate for front office support staff, while 78% of physicians cite staff shortages as current challenges affecting their practices. This is a very dangerous situation, especially for small practices, whose resources are already very limited.

High turnover rates in billing positions create several problems:

• Constant retraining costs and learning curves for new employees.
• Knowledge gaps that lead to increased errors during transition periods.
• Reduced productivity as experienced staff members leave.
• Difficulty maintaining consistency in billing procedures and quality standards.

Practical Solution

Yes, the challenges are many and also difficult to overcome if you don’t know the right way. You might not like the answer, but the easiest and also the most revenue-friendly way of dealing with denial issues is to get help from RCM companies.

These companies have a lot of experience in dealing with all kinds of claim denials. Also, they have very strong billing and coding teams, who are experts in all medical specialties.

However, even though it is a good solution, it does not mean that it will suit all kinds of practices.

When to Consider Outsourcing

Medical billing services for small practices are beneficial when they meet a specific threshold. You should consider outsourcing when:

• Internal billing costs exceed 8% of collections
• Denial rates consistently exceed 10%
• Accounts receivable days exceed 40
• Staff turnover creates ongoing training challenges
• Technology upgrades require significant capital investment

Wrapping Up

We have tried to simplify things as much as possible. The truth is evident. Medical billing challenges are huge and can significantly harm your practice’s revenue cycle. Without proper strategies, you are sure to sustain huge losses.

Often time the best strategy and solution to deal with claim denials is to outsource the billing and administrative operations to specialized third-party billing companies. This way, you will save not only money but also a lot of work and headaches.