Is Outsourced Medicaid Billing the Key to Your Agency's Success?

The first thing to know about Medicaid is that it’s different in every state. To make matters more confusing, some states have multiple payers, programs, and waivers, each with its own unique set of rules. This creates a lot for billers and agency owners to keep up with. The complexity only increases when states require specific software and billing processes that differ from what you use for other clients.

Even if you feel confident in your Medicaid billing, there are still compelling reasons to consider outsourcing. While your scheduling software might handle a lot, there are critical aspects of Medicaid billing that require specialized expertise—areas where outsourcing can make a significant difference.

Here’s why we think you should consider outsourcing your Medicaid billing:

The Bus Factor

The "Bus Factor" is a concept used in project management to assess risk. It asks: What would happen if a key team member suddenly couldn't work? While the name is a bit dramatic, the concern is real, especially for home care agencies.

Many agencies rely on a single person for their billing. This specialist often becomes the linchpin of the agency's financial operations. They're the only one who knows the ins and outs of the billing process, from insurance claims to client invoices.

But this setup can be risky. If that person is unexpectedly absent - due to illness, family emergency, or any other reason - the agency might struggle to:

• Submit claims on time
• Process payments
• Maintain cash flow
• Keep up with changing regulations

These challenges can quickly snowball, affecting the agency's ability to pay staff, cover operational costs, and grow. To mitigate this risk, a smart approach is to consider outsourcing their billing. This approach can provide:

• A team of billing specialists rather than relying on one person
• Consistent service, even during holidays or unexpected absences
• Up-to-date knowledge of industry regulations and best practices

By addressing the "Bus Factor," agencies can focus on their core mission: providing quality care to their clients, while ensuring their financial operations remain stable and efficient.

Billing Fee’s Might Be Less Than What You're Writing Off

At Paradigm, we believe in transparency and informed decision-making. When we speak with home care agency owners and billers, we don't push our services. Instead, we aim to uncover whether there's a genuine need for external billing support. If an agency has mastered their billing process, we're the first to congratulate them—it's a rare achievement in this complex field.

One crucial question we often ask is: "How much did you write off last year?" The responses typically fall into two categories:

1. Uncertainty: Many agency owners simply can't answer this question. This lack of clarity can be a red flag, potentially indicating missed opportunities or unnoticed losses.
2. Eye-Opening Realizations: Those who do know their write-off amounts often come to a surprising conclusion—the cost of professional billing services could be less than their annual write-offs.

Let's consider a real-world example:

We recently spoke with a home care agency billing approximately $1 million in Medicaid annually. The owner was confident in their in-house billing process, believing everything was running smoothly. However, during our conversation, it came to light that in 2023, they had written off about $50,000 in receivables due to various reasons.

To put this into perspective:

• Annual Medicaid Billing: $1,000,000
• Write-offs: $50,000
• Potential fee for professional billing services (at 3%): $30,000

In this scenario, even if the agency had paid for full-service billing at a 3% rate (which at least in Paradigm’s case, is higher than we charge), they would have saved $20,000 compared to their write-offs.

Scaling this example, consider an agency billing $10 million annually. A 5% write-off in this case would amount to $500,000—a significant sum that could substantially impact an agency's financial health.

These figures highlight the importance of understanding your billing process thoroughly. While in-house billing might seem cost-effective, hidden inefficiencies can lead to substantial losses over time.

Staying on top of regulations

Medicaid billing is a complex, ever-changing landscape. New regulations, updated programs, and evolving systems create an environment that's constantly in flux. Even agencies with a solid grasp on Medicaid billing find it challenging to stay current. This isn't just difficult—it often leads to billing errors, delayed payments, and compliance issues.

Here's where Paradigm stands out. Unlike most billing services, Paradigm has cracked the code on this perpetual challenge. Our billing specialists don't just keep up with Medicaid updates—they stay ahead of them. We've developed a unique system to:

1. Track every Medicaid billing update in real-time
2. Maintain extensive knowledge of all relevant software and systems
3. Implement changes quickly and accurately

This means when you work with Paradigm, you're not just getting a billing service. You're getting a team that ensures your billing is always aligned with the latest Medicaid requirements. No more worrying about missed updates or outdated processes.

Payment Reconciliation

Payment reconciliation is an often overlooked but critical part of Medicaid billing. It’s not just about matching payments to services—it's about ensuring every dollar aligns with the care provided, from verifying EVV data against claims to catching discrepancies like recoupments or withholdings. Many agencies struggle with this complex process, leading to errors and delayed payments. By outsourcing this, you get more than just a billing service—you get peace of mind.

Staying on top of client eligibility

Client eligibility is a crucial factor in Medicaid billing—if a client isn't authorized or eligible, your agency won't get paid. Unfortunately, client status can change unexpectedly, often without notice, leaving agencies to bill for services unaware that coverage has lapsed. This leads to uncompensated care and financial losses. Paradigm steps in to prevent these issues by rigorously verifying client eligibility and maintaining authorizations, ensuring your services are always covered and your payments secure.

Take Control of Your Medicaid Billing

Billing isn’t just another task—it’s the backbone of your agency’s financial stability. The complexities involved, from compliance to payment reconciliation, can easily overwhelm even the most diligent in-house team. When these challenges go unaddressed, they can chip away at your agency’s revenue and hinder your ability to provide top-notch care.

Outsourcing Medicaid billing isn’t just about offloading work—it’s about taking control. It’s about ensuring that your billing is handled with the expertise and precision it demands, reducing errors, and protecting your bottom line. By choosing a specialized partner, you ensure your agency operates smoothly, even in the face of Medicaid’s constant changes.

If you’re serious about maintaining financial health and focusing your energy on growth and care, it’s time to consider full-service Medicaid billing. Paradigm can help you navigate the complexities and safeguard your agency’s future.

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About the Author: As a Medicaid and VA expert at Paradigm, Jacob has consulted with hundreds of home care providers across the country and is widely considered a subject matter expert when it comes to 3rd Party Payers in home care. He thrives on building impactful relationships with agency owners that want to achieve sustainable growth through increasing their VA, Medicaid, or Medicare Advantage censuses. Although a far cry from his time spent as a professional tuba player, Jacob now enjoys reading, throwing pottery, and tending to his plants.