COST ANALYSIS BASED ON 2004 PUBLISHED FIGURES
Cost is a deciding factor in deciding whether to perform billing and collection functions in-house or outsource them. For purposes of clarity, here is a side-by-side comparison of the cost associated with each.
As this comparison clearly shows, the savings using PRS vs. in-house billing are significant with total savings per year of $62,115.20.
|
PRS |
Financial Impact PRS |
In-House Billing |
Financial Impact In-House Billing |
Staffing |
Practice does not require |
0 |
Minimum 1 1/2 trained and experienced billing staff is required, whose sole responsibility is billing and collections |
Experienced and trained billing staff is on low |
Computer System |
Optional |
0 |
Standard system for electronic |
Hardware requirements for 3 stations, server, printer, modem extra cabling are approx. $9,500. Software such as Medical Manager with appropriate set up valued at $15,000, plus yearly contract, clearinghouse fees, maintenance |
Supplies |
Superbills and daily reconciliation of deposits |
For a practice seeing 30 patients per day the printer cost would be about $1,200 ($150 for 1,000 Superbills). For copies the total yearly cost is only $24. Total Cost = $1,224 |
Statements, secondary and occasionally primary claims, patient communication, multiple statements |
Assuming a total cost for each mailing of $0.52and an average of 2 statements per patient, plus secondary claims, total mailing related cost is $6,489.60. |
Telecommunication |
Calls to PRS may be necessary to inquire about particular |
Experience shows an average of 3 calls per week, making the yearly cost a total of $10.40 |
Collection work to insurances on the phone is absolutely necessary. |
For appropriate collection activity the phone cost would be about $200/month or $2,400/year. In addition, cost for high speed internet connection or upload times for claims easily add |
Other Charges |
PRS charges as a % of actual revenue, making billing expenses a flexible cost rather than fix, thereby helping the |
Assuming an average |
Hidden charges are the loss of income from space taken up by billing related activities rather than revenue |
Not calculating income that could be generated
|
Total Cost |
|
$40,834.40 |
|
$102,949.60 |