Medical Accounting Software Buyers Guide
This detailed guide will help you find and buy the right medical accounting software for you and your business.
Last Updated on November 09, 2023Medical accounting software can streamline accounting processes and cut back on errors associated with manual data entry. Accounting software for healthcare or social services industries will include a number of features that support the management of day-to-day accounting and business practices, including:
Automating billing and invoicing
Managing payroll
Assisting with patient scheduling
Supporting billing with insurance companies
Maintaining HIPPA compliance
We’ve created this guide to help medical professionals as they evaluate accounting software. We’ll highlight the critical capabilities to be on the lookout for and outline several considerations buyers should keep in mind as they compare solutions.
Here's what we'll cover:
What is medical accounting software?
Healthcare and social services organizations have specialized needs when it comes to accounting. Not only do they need to keep accurate financial records, but they have rigorous compliance standards to maintain to be in keeping with the numerous laws regarding the safety and privacy of patient data.
The core accounting functions needed to balance a medical organization’s books include:
General ledger (GL): Used to prepare financial statements and reports, the GL is the record of the entirety of a healthcare organization’s financial transactions. It includes statements on revenue and expenses, assets and liabilities.
Accounts receivable (AR): Commonly called “assets,” AR refers to the money owed to the medical organization, but not yet paid, for services rendered.
Accounts payable (AP): Commonly called “liabilities,” AP refers to the money owed by the medical organization to its suppliers and creditors.
Medical accounting software also support billing to insurance companies, as well as Medicare and Medicaid. Specific budgeting tools for the financing structure in those industries are typically included, and integrate with electronic medical records software for meaningful use.
What are common features of medical accounting software?
In addition to the core features listed above, look for the following healthcare-specific features:
Medical materials management | Manage the purchasing and disbursement of supplies, especially any pharmaceuticals or lab materials with a shelf life. This prevents lost inventory and/or charges. |
Patient/insurance/CMS billing | Between copays, reconciling EOB forms and the Centers for Medicare & Medicaid Services, the bureaucracy associated with healthcare accounting adds several layers of complexity most industries don’t have to deal with. These systems typically includes ICD-9 and CPT coding information, claim scrubbing and electronic claims submission. |
Integration with electronic medical records | Electronic medical records (EMRs) track patient notes, demographics, family medical histories and medications. They also typically include features like e-prescribing, lab and medical device testing integration and voice recognition notes software. In the move for all providers to adopt EMR technology, integrating with that data is critical for most buyers. |
HIPAA compliance | If your system contains any patient data, you’ll need a solution that not only performs the necessary accounting functions, but also complies with HIPAA’s privacy regulations. |
Integration with patient portals | Provides patients with 24-hour access to services including access to medical records, appointment setting, prescription refills and online bill pay. The latter allows patients to view bills and make payments via credit card. |
Financial reporting | Capture business transactions, analyze revenue and expenses and gain insight into performance trends. Filter data by department, employee, medical supply, etc. to view reports on every aspect of your business. |
What type of buyer are you?
There are hundreds of medical accounting products on the market place designed to suit a variety of needs. The most critical factor to consider in selecting your healthcare/social services accounting software is your size and type of organization. A hospital provides a large number of disparate services, whereas a private practice may have only a handful of physicians within a single specialty.
For example, ophthalmologists will need to monitor retail sales, while a cardiologist does not. Social services, palliative/hospice care and rehab all have their own unique needs, too. Therefore, it’s essential to ensure your software solution is designed to handle the accounting functions that meet your facility’s unique needs.
We find that the majority of medical organizations we speak with fall into one of the following categories:
Inpatient facilities
Outpatient facilities
Specialists
Small practices
Midsize and large practices
These organizations can purchase accounting software in both on-premise and cloud-based solutions. On-premise accounting software will be hosted internally, on the healthcare organization’s servers. Typically, on-premise software is sold via perpetual license, meaning the medical organization pays a one-time fee to own the software and use it indefinitely. They are responsible for maintaining the software on their own and can purchase upgrades from the vendor as needed.
Conversely, cloud-based accounting software is hosted remotely on the vendor’s servers. Healthcare organizations pay a recurring monthly or annual subscription fee which allows them to use the software for that amount of time. The fee includes the cost for support, maintenance and upgrades supplied by the vendor.
An additional consideration is whether to purchase medical accounting software as best-of-breed or in suite, as part of a larger medical practice management system. Practice management platforms will handle the majority of the healthcare organization’s business functions, from reporting to accounting to patient scheduling. Visit our medical practice management buyer’s guide for more information about these systems.
Healthcare organizations may choose to supplement their existing medical billing software with a more robust accounting platform if the billing system lacks core accounting features. Buyers purchasing best-of-breed or standalone software should first ensure the product integrates with the existing software in place at the organization.
What should you consider while evaluating healthcare and social services accounting software?
The most critical factor to consider in selecting your healthcare/social services accounting software is your size and type of organization. A hospital provides a large number of disparate services, whereas a private practice may have only a handful of physicians within a single specialty. Inpatient facilities track patients differently than outpatient facilities. For example, phthalmologists will need to monitor retail sales, while a cardiologist does not. Social services, palliative/hospice care and rehab all have their own unique needs, too. Therefore, it’s essential to ensure your software solution is designed to handle the accounting functions that meet your facility’s unique needs.
When evaluating these systems, buyers should consider the following:
Do you bill primarily to insurance companies, Medicare/Medicaid, patients or a combination?
Will you also need electronic medical records (a.k.a. electronic health records) software, or do you already have software that will need to be compatible with your new accounting system?
Will you be storing any patient-sensitive information in your accounting software?
Do the features fit the size and type of facility (for example, hospital vs. private practice; outpatient vs. inpatient; medical vs. social services etc.)?
Can it generate the appropriate reporting documents for auditors?
Does it scrub medical claims and reconcile insurance billing with explanation of benefits forms?