Most healthcare organizations would rather talk about patients than administration any day of the week. Unfortunately, those seemingly small and insignificant back office tasks need to be discussed now and then, to make sure your practice continues to run smoothly. Thanks to software solutions, many of these tasks are easier than ever to manage. However, the question that many find themselves asking is: does my practice actually need certain types of software? For example, do you really need medical accounting software?
What is Medical Accounting Software?
First of all, let’s quickly define what exactly medical accounting software is. Also known as medical billing software, it’s a system that manages all of the finances that flow through your practice. These include patient accounts, collections and copays. Additionally, it handles accounts payable, accounts receivable and general ledger features. Medical accounting software also helps manage the often complex process of handling claims with insurance providers and Medicare/Medicaid.
The system also manages and tracks your patient information. Unlike EHR software and EMR software, however, it doesn’t track their medical histories, but rather their billing information. This gives you a complete record for each patient. You can use that record to identify patients that have been slow to pay up, or just check to see if you sent them the bill for a certain appointment or service.
How to Assess Whether You Need Medical Accounting Software
If you use money to run your practice, you need medical accounting software. Ok, it may not be that black and white, but the majority of medical practices can benefit from some form of medical accounting software. That said, there are, of course, some exceptions. Here are some questions to ask yourself in order to assess whether or not your practice needs medical accounting software:
Do You Use Medical Practice Management Software?
Medical practice management software (sometimes shortened to practice management, MPM or PM software) is a versatile back office solution for healthcare organizations. Among other capabilities, it offers appointment scheduling software, document management, information management, revenue cycle management and a patient portal. Oh, and one other important feature: billing and coding.
If practice management software already plays a critical role in your medical office, then medical accounting software is probably unnecessary. The most important features of a medical accounting software are included in the billing and coding features of practice management, specifically the management of insurance claims and monitoring cash flow. So if your practice already deploys practice management, you don’t have to double up with medical accounting software.
How Big is Your Practice?
Large healthcare organizations pretty much have to use either medical accounting software or medical billing services (we’ll leave the discussion of which of those two is best to another article). The sheer volume of patients that walk through their doors make simple Excel spreadsheets unmanageable.
Small practices, on the other hand, might find an alternative is the best option. Depending on how your practice manages the back office, you might find that medical billing services or hiring a staff member to handle billing is more cost effective than medical accounting software. That said, the problem with using medical billing services is that they’re not always willing to work with small practices, since they don’t generate as much revenue as larger ones. This aside, however, a smaller volume of patients naturally makes billing management much easier, so manually doing so is much more feasible for small practices.
Does or Will Your Practice Operate in a Direct Primary Care Model?
A new trend has been popping up in several practices around the country: discarding the relationship with insurance providers altogether. These practices, known as direct primary care practices, collect monthly or annual fees from their patients instead of dealing with insurance claims. This trend popped up as a result of wanting to improve patient care, since many practices felt like they worked for the insurance companies instead of their patients.
If your practice operates under this model, if you’re currently transitioning to this model or if the above paragraph has convinced you to adopt this model, then you may not have much of a need for medical accounting software. One of the biggest advantages of this software is that it helps manage the complicated insurance claim process. However, managing what amounts to a subscription service for the direct primary care model is much easier.
Of course, automated patient billing is easier than doing so manually, so direct primary care practices can still benefit from using medical accounting software. But without the plethora of insurance hurdles to deal with, it’s not nearly as much of a necessity.
The Bottom Line
At the end of the day, every practice, large or small, can benefit from using medical accounting software. The benefits of automation and reduced errors are invaluable to the practices that use them. However, based on how your particular practice operates, it may find that other options are better. You may find that other methods are more cost effective, or you may already have these functions covered. No matter what the case may be, just make sure to choose the options that’s best for your practice based on your operational needs.