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Risks of Offering Direct Billing for Your Clients

Direct billing is an arrangement between a health insurance provider and a medical facility where bills for services are sent directly to your health insurance company. Although this can be a huge risk for healthcare professionals, many feel pressured to offer this option as a way of differentiating their practices, improving customer experiences and encouraging customer loyalty.

Below are a few of the things health care providers should consider before choosing to offer direct billing to their clients.

1. By Submitting The Claim You Are Responsible

Offering direct billing to clients means you are not only taking responsibility for payment to the insurance company but that you are also liable if there are any issues with the claim. This means proving to the insurance company that the treatment was carried out and submitting all the treatment notes, so organization is key if you don’t want to be out of pocket.

To avoid these risks, train your clients how to submit their own insurance receipts so you don’t have to take on the added stress. It can be as simple as creating a space on your website with a step-by-step guide to show clients how easy it is to submit the receipt and receive the payment.

2. Increases Cash Flow Risk Without Increasing Value

Although many healthcare providers want to offer direct billing to clients as a marketing feature, they are not actually adding any extra value to their business by doing so. Instead, they end up adding lots of cash flow risks to their business.

Learning how to effectively submit claims by trial and error can result in some costly mistakes, for example, if your claim is rejected and as a result, you lose out on payment for a service. To avoid this happening, familiarize yourself with the types of questions to ask insurance providers so that you don’t file a claim wrong and lose out on payment as a result.

3. Unpaid Claims Cause Admin Headaches

If there are any issues with the insurance claim, the insurance company will talk to you about them rather than with your client. You then need to pass on that information to your client, which creates a frustrating line of communication that can be avoided if clients submit claims themselves.

Since insurance companies are often changing their policies, keeping up to date with changing requirements can also be stressful. Offering direct billing to clients at no extra cost and without adding anything to your bottom line can mean a lot of extra hours of research and administration leaving you frustrated and over-worked.

4. You Can Be Audited

When submitting the claim yourself, the insurance company can choose to audit you, which is not only time-consuming but can actually be costly for your business if any mistakes are made. Mistakes can be as minor as including one wrong date on paperwork and often result in the insurance company requiring you to pay that treatment if they have already cleared the claim.

If you encourage your clients to submit their own receipts themselves, they are liable for any insurance discrepancies and will be contacted directly.

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