How time-based medical billing impacts physician reimbursements and revenue

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How time-based medical billing impacts physician reimbursements and revenue

Medical Billing on a time-based system is associated with a stronger physician reimbursement for evaluation and management visits which go on for a longer time. Billing which is based on medical decision-making results in higher reimbursements for a shorter evaluation visit. This information is found in a study that was published in JAMA Network Open. 

With a healthcare facility that follows a fee-for-service system, doctors and physicians are reimbursed following the amount and complexity of diagnosis made during the visit. This is known as the medical decision-making method. However, physicians oftentimes end up spending time on tasks that are not listed in MDM-based billing. This includes but is not limited to reviewing the medical records, maintaining coordination of care, and completing documentation. This can easily lead to up to two hours of work that remains unaccounted for. 

Time-based Billing

This is an alternative method of billing which allows reimbursements on the basis of the length of a patient’s visit. Traditionally, time-based billing only calculated the time that was spent face-to-face with the patient. However, the 2021 Evaluation and Management (E/M) guidelines state that Physician Medical Billing and doctors can bill patients for tasks related to the visit on the day of the appointment.  

Time-based VS Medical-decision Making

In a research conducted in 2018 by the National Ambulatory Medical Care Survey, MDM-based billing generates the highest reimbursements for short patient visits. As the length of the visit increased, the reimbursement decreased under the MDM billing system. 

With time-based billing in place, longer visits have higher reimbursements for the physician. The revenue generated for E/M services also provided stability. The time-based system leads to a decent number of reimbursements for shorter visits, with the numbers growing with the length of the visit. 

In a nutshell, for a short visit, the MDM billing system proved to be more rewarding, and for longer appointments, time-based billing took the lead. 

The impact of the volume of Patients

Researchers found that time-based billing, it’s likely to be less beneficial for a high volume of patients. Whereas, physicians with a less volume of patients and longer visits will benefit from this model. 

Other advantages of Time-Based Billing

With a time-based billing model, the practice is provided with flexibility in the schedule. This could assist in addressing preventive medicine in a better way. Another benefit it offers to the physician is that they would have more time on hand to cater to other tasks. With a reduced volume of patients per hour, doctors may focus on documentation, paperwork, and reviewing which is required for every visit. 

Conclusion

Depending on the medical provider and the nature of the practice, a billing system should be set in place. Time-based billing has immense advantages for a private practitioner who would have longer patient visits. As a healthcare provider, you must weigh all the pros and cons of the two billing systems before making a choice. Since this is one of the most important aspects of your practice, it’s best to consider possibilities and logistics before you put your foot down