The medical billing industry has been steadily growing over the last five years. According to IBIS World, the industry has seen an average of 3.1% growth to $4.3 billion from 2015-2020. While many sources have said that the industry took a minor hit in 2020 due to the Covid-19 pandemic, the industry is expected to rebound quickly. As a result, the market is projected to hit $12.44 billion by 2023 at an annualized growth rate of 13.93%. Let’s see the Medical Billing Industry Growth.
We are expecting the outsourced medical billing market to keep growing. Some influencing factors include new technological solutions offered by providers, increasing government requirements and updates, and a rising percentage of denied claims. These numbers are promising and present a good opportunity for outsourced medical billing companies over the next several years.
When it comes to outsourced medical billing, hospitals make up the largest source of revenue as of 2019. This is because they typically have the most significant volume of claims. Additionally, hospitals usually face the most extensive variety and complexity of claim types, leading them to outsourcing solutions. The chart below shows the market share as of 2019. However, due to the patient volume in hospitals due to Covid-19 this year, this trend is likely to remain.
The second-largest source of revenue in the medical billing industry is physicians offices. According to Grandview Research, physician offices are likely to expand faster over the next several years. This is partly due to the rising number of services they provide and billing and coding updates.
Need to Simplify Claims Process
Every year, more and more medical practices are looking for ways to simplify their claims process, reduce billing errors, and maximize their revenue. According to MarketWatch,
“Unless an office or a medical practice is using services of an experienced billing provider who has been trained to look at holes in paperwork, there’s a good chance that their revenue is not as high as it could be.”
There is a growing focus on risk management in the medical industry. More practices are seeing the value that outsourced medical billing providers bring to the table – in terms of efficiency, accuracy, and cost-time benefits.
Digital Record-Keeping and Automation
Medical practices today are almost entirely digital in terms of record-keeping and practice management. As of 1996, practices have to keep digital records (EMR) of their patient’s health charts. In addition, there is other cloud-based software that practices have adopted to keep more secure records and efficiently manage their practice. Due to the number of cloud-based platforms practices must now manage, many see the value in working with an outsourced billing provider. Outsourced providers often offer an all-in-one, streamlined software options that practices can easily navigate on the back-end.
High technology costs
Medical billing software and in-house administration are becoming more expensive every year. When medical practices do not use an outsourced medical billing provider, they incur several overhead costs. These costs include software, EMR databases, administrative salaries and benefits, and much more. Using an outsourced medical biller typically saves money on software, billing, and administrative costs, leading more practices to switch to outsourcing year over year.
Although the industry has grown steadily this year, Covid-19 has undoubtedly impacted the medical billing industry in specific ways.
Lower Health Insurance Coverage
Unfortunately, since Covid-19 hit the U.S., there has been a sharp increase in unemployment across the country. As a result, fewer people across the country can obtain health insurance coverage this year. This has impacted the medical billing industry by preventing many Americans from visiting healthcare centers without private insurance. However, as the economy rebounds and more Americans return to work, this trend is likely to taper off.
New Tracking and Coding Updates
The government has released new codes that billing and coding professionals must use to diagnose and treat Covid-19. There are various codes for different Covid-related procedures, such as testing, diagnoses, patient exposure, etc. what is more, the CDC continues to update these codes as they learn new information about Covid-19. These complications may lead to more medical practices outsourcing their billing needs to focus on operations.
Need to Reduce Denied Claims
Due to the struggling economy and lower patient volume, many healthcare practices are finding new incentives to lower denied claims rates. However, each denied claim costs practices money to correct. So to maximize their revenue, many practices seek help from third-party medical billers to keep denied claim rates down.
Patient Volume and Telehealth
Some healthcare facilities, such as hospitals, are seeing a rise in patient volume due to Covid-19. Others still are switching over to telehealth or remote care options. These factors alone are causing such types of medical practices to opt for outsourced medical billing solutions to either free up time for patient care or facilitate remote operations.
North America Market
North America has held the highest market share when it comes to outsourced medical billing. One reason for this is that U.S. healthcare providers are looking for tech-savvy, end-to-end solutions for managing their practice’s revenue. In addition, many practices need a solution for efficiently managing the high volume of Medicare and Medicaid claims. There is also an increased awareness in the U.S. regarding the solutions and benefits offered by third-party, outsourced medical billing providers. Additionally, ICD-10 codes in the U.S. are among the most complicated worldwide, leading many practices to opt for the simplicity of revenue cycle management services (RCM).
Small medical billing providers can offer streamlined medical billing solutions and focus on their costs to remain competitive.