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Our Position Regarding Offshore Outsourcing

The AMBA has always been a strong advocate of privacy and security of medical information. We believe that members must be vigilant in protecting patient privacy and confidentiality of sensitive medical information. We support privacy and security compliance under Federal and State privacy laws and provide extensive support and information for meeting compliance standards and recommendations.

Our association does not support or encourage billing work to be sent offshore for processing in another country. In the event of a breach of protected health information (or even a contract issue), US authorities and courts would more than likely not be able to hold a foreign contractor or business associate accountable. It is for this reason that we believe offshore outsourcing is huge risk for the medical billing industry.

For medical billing purposes, there are two usual scenarios that involve offshore outsourcing:

  • The healthcare provider or doctor contracts directly with an offshore processor
  • The healthcare provider or doctor contracts directly with a billing company that sub-contracts the billing function out to an offshore processor

Usually, under both circumstances, the doctor's patients are unaware their health information is being processed offshore and they are therefore, unable to opt out of having their protected health information processed by an offshore processor. However, in some cases, even the doctor him/herself is unaware their billing is being contracted out to an offshore processor because the billing company either has an offshore location or they are contracted with an offshore processor. If a doctor is uninformed about the business associates his/her billing company is utilizing, they also cannot opt out of offshore outsourcing should they choose to.

It is incumbent upon healthcare providers and doctors to use due-diligence to know where their billing work is being processed as they are responsible for any breaches or wrongful/improper disclosures of their patient's protected health information. They are also responsible for their contracted biller's improper disclosures as well as the business associates billers may contract with.

The main attraction for contracting with an offshore processor is the reduced fees typically charged.  However, we have noted that often practices end up bringing their billing back in-house due to communication issues or as a result of large increases in outstanding accounts receivables and turn-around time. Additionally, offshore workers typically do not possess the skill level necessary at all knowledge levels to get claims paid and appealed properly, creating unnecessary and costly errors. Time zone barriers also present constraints on basic communications between the practice and the offshore processor. And finally, an offshore worker simply cannot be expected to have a personal responsibility or stake in spending the extra time or effort that is often required to get a claim paid properly.

Billers must also be aware of where medical information is stored when they contract with billing software or record storage companies that operate in the cloud. You may contract with a company that has an American address, but that company contracts with a company located in another country to store your data. Again, due diligence is required before committing to this type of service.

The savings from relying on offshore companies could well become much more costly, time-consuming and penalty-laden than planned.

We understand the myriad of reasons and rationale used for offshore outsourcing. We are concerned that some of our members have lost their jobs as a result of this practice. We would prefer that billing jobs stay in the US with American billers who are qualified to perform billing services. Only a trained and knowledgeable US biller can ensure practices a successful outcome by providing quality billing services while complying with enforceable rules and regulations.

Outsourced Billing and Coding Compliance Risks – Warning to Billers, Coders and AMBA Members on Offshore Outsourcing

Recently, HIPAA Compliance Risks of conducting business offshore outsourcing companies has made its way back into the spotlight. One expert feels that due to a recent Supreme Court case, it's doubtful that HIPAA compliance could be directly enforced by U.S. regulators for offshore business associates.

Under the new HIPAA Omnibus Rule, (effective 9/23/13) business associates are now directly liable for HIPAA compliance – meaning not only are the doctors you do business with responsible for your compliance, but YOU ARE DIRECTLY RESPONSIBLE as a business associate for improper disclosures and breaches and you are responsible for business associates that you contract with, including software vendors as well as offshore processors. The American Medical Billing Association’s Outside General Compliance Counsel, Liles Parker, points out that doing business with offshore processors is a risk that members may want to steer clear of and simply conduct business within the United States because US law provides protections and relative ease with which to resolve conflicts that more than make up for any savings by conducting business offshore.

Below are additional resources you may want to review regarding the compliance risks of doing business offshore:

Outsourced Billing and Coding – Compliance Risks

HIPAA Omnibus and Offshore Vendors

Offshore Vendors: Enforcing Compliance

Do HIPAA penalties apply to offshore business associates?

32,000 patient records exposed on contractor's unsecured website (by offshore processor)

Offshore outsourcing was an issue raised by then Representative Ed Markey (D-MA) with the Secretary of HHS as a privacy concern. This is his letter to HHS and the HHS reply all from 2004.

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