What business are you in? The answer may seem obvious to an ambulance service manager: “I’m in the emergency medical transport game.” But if you’re also doing the billing for those transports, you’re in fact in two businesses, because emergency transport and medical transport billing are completely different enterprises. It’s a critical distinction with lots of bottom line implications says, Mark Schiowitz, president and CEO of Digitech, who discussed the issue with JEMS during EMS Today 2017 in Salt Lake City.
Agencies that see billing merely as the paperwork portion of transportation can run into costly challenges related to everything from personnel to hardware. Never mind collecting data, how about processing it? “They have to deal with a whole IT infrastructure, which would include security and firewalls, and they need IT people to manage all these servers that they have,” Schiowitz said. “Once they get through that, they have to deal with application software that they need to maintain and keep updated; they need training. And then once they get all that stuff down, they need a whole billing department.”
Agencies that choose to handle their own billing will, of course, need to hire people with highly specialized skills. Good luck finding them. “This is a pretty niche industry; you can’t just find someone who does medical billing and expect them to do ambulance billing,” Schiowitz said. “You need to find some very special people.”
That’s in part because those people have to be fluent in the languages of legal considerations, frequent Medicare updates, medical transport protocols, HIPAA laws, and other security issues. “You have to make sure that your people are trained in compliance. There’s a lot of work, time, and money that goes into setting up a billing department,” Schiowitz said.
Seeking Outside Help
At a minimum some EMS agencies will consider outsourcing to avoid dealing with the increasing IT and hardware requirements. “Most billing companies, at least the good ones, will host the application. Some will even provide a dispatch system,” Schiowitz said. “So you’ve really simplified your infrastructure and, in doing that, you’ve released a certain amount of corporate energy to do the things that your company does best.”
But slimming the infrastructure is just the beginning of how outsourcing billing may help ambulance agencies thrive. How about fattening the revenues and lowering costs? “You have a real possibility that the billing service is going to increase revenue,” Schiowitz said. “You could also reduce your payroll, which creates a much leaner company that is better able to deal with the other issues of your business.”
Schiowitz says that it’s important to keep in mind that outsourcing is a variable cost, one that is linked to revenues as opposed to a monthly subscription that has to be paid whatever the volume. This helps make billing a manageable expense rather than a potentially costly exposure.
Still, many agencies remain resistant to the idea of third-party outsourcing. Sometimes it’s a friend or family member who’s doing the billing or, as is frequently the case, the agency genuinely believes it can do as good a job as a specialty billing service. The risk for the agency is that it’s extremely difficult to be good at both. The ambulance agency’s prime focus has to be on providing quality patient care and meeting response times. That raises the likelihood that it won’t be as good at disciplines such as compliance. Billing companies are solely focused on billing and all the regulations that come with it. “We have to be, because our whole company is at risk,” Schiowitz said. “If we run [afoul of] a compliance issue, clients will leave us, so we are extremely focused on compliance.”
Pitfalls
As with any investment, you have to conduct due diligence before outsourcing your agency’s billing. “You really need to be sure you’re picking an entity that can increase collections, has the compliance record, and has the track record to achieve the results that you want,” Schiowitz said. “And the second thing you need to do is you need to be committed to the project. Some companies will try to keep two or three of their billers on staff to manage the billing company. That’s a little bit like telling a doctor how to cure you. You really need to commit to the billing company and accept the fact that they probably know how to do this better and let them take the lead.”
EMS and ambulance agencies should be cautious of investing in a billing software system rather than a full-service billing solution. “A company that’s selling software is not incentivized to maximize collections or maximize efficiency,” Schiowitz said. “You’ll have companies that are selling by the seat, for instance. The more seats they sell, the more money they make and the more support fees they get, so they’re not inclined to reduce the numbers of seats they sell. There’s no incentive for a third-party vendor to try to help an ambulance company maximize revenue.”
In contrast, a full-service billing company is specifically designed to maximize revenue and efficiency. “The difference is that theirs [the software company] might be a Cadillac. It’s comfortable, easy to use, anybody can drive it,” Schiowitz said. “But what you really need is speed – something closer to a Formula One.” Never mind the air conditioning, the music system, or other accessories, says Schiowitz. “Focus on performance. Forget about the five-passenger comfort and just have a system that is specifically designed to achieve superlative results, which includes maximizing revenue, maintaining compliance, and delivering deep and transparent reporting.”
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