{"id":15117,"date":"2022-02-17T14:28:00","date_gmt":"2022-02-17T14:28:00","guid":{"rendered":"https:\/\/www.medicalbillersandcoders.com\/blog\/?p=15117"},"modified":"2025-10-30T11:27:54","modified_gmt":"2025-10-30T11:27:54","slug":"evaluating-regulatory-risks-while-outsourcing","status":"publish","type":"post","link":"https:\/\/www.medicalbillersandcoders.com\/blog\/evaluating-regulatory-risks-while-outsourcing\/","title":{"rendered":"Evaluating Regulatory Risks while Outsourcing"},"content":{"rendered":"

It\u2019s quite common for healthcare providers to outsource their billing activities to a medical billing company. Billing and coding for various medical specialties are challenging tasks due to billing guidelines, payer reimbursement policies, updated ICD-10 codes, and accurate use of procedure codes & modifiers. <\/span><\/p>\n

An orthopedic surgeon recently remarked that he was thinking about outsourcing his billing services to a medical billing company to avoid learning ICD-10 and make ICD-10 \u2018the billing company\u2019s problem.\u2019 But hastily outsourcing billing and coding services without careful evaluation can lead to regulatory issues. <\/span><\/p>\n

Choosing the wrong billing company or outsourcing for the wrong reason can quickly become a nightmare of risk and lost revenue. Performing due diligence before signing the contract can mitigate risk and performance issues before they become acute. <\/span><\/p>\n

Evaluating Regulatory risks<\/em>\u00a0refers to the\u00a0risk<\/em>\u00a0that a change to the laws or\u00a0regulations<\/em>\u00a0will hurt a business or investment by affecting that business, sector, or market.<\/span><\/p>\n

Evaluating Regulatory Risks<\/span><\/h2>\n

Most providers\/ surgeons tend to choose medical billing companies based on low rates without considering the risks. Such medical billing companies can process a claim but are unaware of the regulatory environment. They have no privacy, security, or document destruction policies, and may not even know what a Business Associate Agreement (BAA) is, let alone supply one to the practice. <\/span><\/p>\n

The requirements for business associates handling billing recently underwent a major overhaul when the Health Insurance Privacy and Accountability Act (HIPAA) Omnibus Rule took effect on Sept. 23, 2013. All business associates are now required to have rigorous privacy, security, and breach procedures, just as medical practices do.<\/span><\/p>\n

The BAA with a billing service must contain a security policy, a privacy policy, and have a breach notification procedure in place and ready in case a breach occurs. The billing company becomes a legal agent for the practice and the practice may be completely liable for the service\u2019s actions on its behalf. <\/span><\/p>\n

If the billing company doesn\u2019t destroy accounts receivable reports or paper Explanation of Benefits (EOB\/ERA), and these fall into the wrong hands, the practice may still get fined. The billing company\u2019s security policy should cover the details of protecting both digital and paper personal health information (PHI). <\/span><\/p>\n

A medical billing company should answer questions such as:<\/span><\/h3>\n