Outsourcing third-party billing for a Skilled Nursing Facility (SNF) can be a strategic decision with significant financial, operational, and compliance implications. When managed effectively, it can improve revenue cycle performance, reduce claim denials, and ensure adherence to complex Medicare, Medicaid, and payer-specific regulations. However, success depends on selecting a knowledgeable partner, maintaining strong oversight, and aligning processes with the SNF’s clinical documentation and financial goals.
Here are some important considerations that can help you decide if outsourcing third-party billing is the right choice for your SNF:
1. Expertise and Compliance
2. Improved Cash Flow
Professional billing companies typically file claims more promptly and follow up consistently. Higher accuracy means fewer billing errors that can hold up payment. Regular follow-ups on outstanding claims can help SNFs maintain a steady revenue cycle and healthier cash flow.3. Cost Savings
Outsourcing reduces payroll and overhead, and SNFs save on salaries, benefits, and training costs for in-house billing staff. Outsourcing is typically scalable, meaning you only pay for the level of service you need without the fixed costs of a full department.4. Focus on Patient Care and Other Critical Business Office Roles
Outsourcing administrative functions allows your internal staff to spend more time on resident care, family communication, and operational improvements rather than claim submissions. However, pending Medicaid applications often need significant attention and may be more effective being completed by in-house business office staff.5. Communication Challenges
Your outsourcing vendor must commit to a robust Accounts Receivable monthly review with all the right people participating to avoid collection issues. Communication regarding collection matters requires clear, consistent and timely communication between the parties. It's important to be clear on the roles and responsibilities while maintaining internal controls (i.e. the vendor does not have authority to write off accounts). Other challenges can be the time for issue resolution, as external billing staff may not be as integrated into your facility’s workflow, which can cause delays in resolving documentation or coding discrepancies. Any outsourcing agreement requires clear processes for exchanging information between nursing, MDS coordinators, and the billing partner.6. Vendor Performance Variability
Not all billing companies deliver the same quality. Poor performance can lead to delayed payments, increased denials, or compliance risks.
It is important to check references and outline KPIs such as clean claim rates and average days in A/R. Maintain oversight by holding regularly scheduled meetings to track performance and ensure transparency, and always negotiate flexible vendor contract terms avoiding long-term agreements that cannot be easily terminated if there are performance issues.
Affinity Health Services can provide guidance on whether outsourcing third-party billing makes sense for your SNF. Our billing team has a combined 150 years of experience in third-party billing in the senior care industry. To learn more, download our Third-Party Billing Case Study, or call or visit our website today.