Medical accounting software manages and tracks financial operations within healthcare facilities, streamlining billing, payroll, and budgeting processes. We used our review methodology to review and rank our favorites.
- Sage Intacct: Best Overall
- NetSuite: Best for Hospitals and Large Medical Practices
- FreshBooks: Best for Private Practices
1 Sage Intacct - Best Overall
Why We Chose It: We chose Sage Intacct as our top pick due to its industry-specific features for growing healthcare facilities. Unlike many other accounting software options, Intacct includes security, access controls, and audit trails that comply with HIPAA standards. This way, healthcare professionals can manage their reports and financial data while ensuring they follow the requirements around PHI. This software also includes financial statements and healthcare-specific reports that obey IRS standards.
We gave Intacct a score of 8.7 for its simple interface and real-time, multi-dimensional reporting capabilities. This software can integrate data from payroll, electronic medical records, and CRMs like Salesforce. However, Sage doesn’t include pricing on their website, though it’s comparable to costs for other enterprise-level general ledger software like NetSuite.
2 NetSuite - Best for Hospitals and Large Medical Practices
Why We Chose It: Although NetSuite isn’t marketed as healthcare accounting software, there are many reasons why we found it suitable for large medical practices and hospitals. We gave the platform a score of 8.3 for its financial management and accounting tools integrated with other functions like billing, compliance management, and inventory. This streamlines clinical, financial, and operational processes for healthcare professionals on a single platform.
NetSuite also complies with accounting standards like GAAP and can help companies meet their requirements with audit trails and real-time compliance monitoring. It can also benefit a company with other international locations by offering global account management, multi-currency support, and language interfaces. However, our research shows many reviewers found the software expensive and required multiple add-ons, which increased the overall price.
3 FreshBooks - Best for Private Practices
Why We Chose It: After using a free trial and testing FreshBooks for ourselves, we found this software a top choice for private practices or independent clinics. We gave FreshBooks a score of 8.5 because it can manage various bookkeeping needs, such as time and expense tracking, invoicing, and cash-flow management. With these features, we recommend this software for mental health practices and consultation-based specialties, especially if they charge by the hour or session.
We also like that FreshBooks features seamless integration options that allow practices to manage payroll and appointment scheduling through the accounting software. Some standard services and apps FreshBooks integrates with include PayPal, Gusto, Salesforce, and Microsoft Office 365. FreshBooks allows practices to create customizable invoices with their branding and logos. Businesses can then send recurring invoices to ongoing patients, accept online payments, and have recurring billing through templates.
However, FreshBooks may not be the software for you if you have more than one or two people on your accounting team as it limits the number of users in all plans. This software also doesn’t offer HIPAA compliance.
4 QuickBooks Desktop Enterprise
Why We Chose It: Due to its scalability, integration, and strong accounting capabilities, QuickBooks Desktop Enterprise is a good choice for small—to medium-sized healthcare organizations with ten to 50 employees. We especially like that it features customizable reporting capabilities to personalize accounts for medical expenses, insurance payors, and procedures.
We also like that QuickBooks offers tools like accounts payable/receivable, invoicing, and inventory management. This software supports up to 40 users simultaneously and can track multiple locations, which can be especially beneficial if a business has multiple providers or facilities.
One drawback of QuickBooks is that it is not HIPAA-compliant; therefore, organizations can’t create or store any protected health information unless the software is used via a third-party hosting service that supports HIPAA compliance. Another downfall is that once a company expands, QuickBooks Desktop begins to show its limitations by restricting the number of users, chart of accounts, and locations.
5 Zoho Books
Why We Chose It: After testing Zoho Books’ features, we found it suitable for smaller medical practices or solo practitioners with basic accounting needs. It provides capabilities like invoicing, financial reporting, and expense tracking. This software meets the basic bookkeeping requirements at a very affordable price, with free plans for start-up practices or solo practitioners and paid plans starting at only $15 per month.
For small practices without an accounting team, Zoho Books is a great option. It’s very user-friendly, and its mobile app makes it easy to manage an account on the go. Zoho Books also features integration options that could potentially link to medical billing software.
While Zoho Books could be a good option for small practices and start-ups, it lacks specialized features like medical billing or compliance with healthcare regulations like HIPAA.
What is Medical Accounting Software?
Medical accounting software helps healthcare providers manage their financial operations, and accounting needs specific to their industry. This specialized accounting software is designed specifically for healthcare providers, medical practices, hospitals, and other healthcare-related organizations.
The best medical accounting software will feature a variety of traditional and medical-based features including streamlined medical billing processing, support for multi-location accounting, and compliance with healthcare regulations.
Key Features
- General Ledger (GL): Records all financial transactions like assets, capital, revenue, expenses, and liabilities.
- Accounts Receivable (AR): Manages all debt (asset) collection from patients, insurance, and vendors.
- Accounts Payable (AP): Manages all money owed (liabilities) by your hospital to creditors.
- Payroll: Distributes employee paychecks through direct deposit or check printing. Automates wage calculation based on pay rates and correctly tracks employee tax withholdings.
- Medical Billing: Generates invoices for distribution to patients and insurance companies. Also organizes billing for organizations like Medicare and Medicaid.
- Inventory Management: Tracks all assets like medical consumables, office supplies, and cafeteria food.
- Bank Reconciliation: Matches bank records with your hospital’s general ledger accounts.
Benefits
Here are the best benefits of hospital accounting software:
Streamlined Communication with Insurance Companies
Healthcare organizations regularly deal with insurance companies when collecting payment for services. Medical billing software generates the claim based on the medical codes provided by your hospital. It is up to your staff to start the billing cycle by updating patient files with the correct procedure codes. Once you have a claim, it can be sent directly to the patient or their insurer. Then you just have to wait for payment.
Unfortunately, insurance companies are notorious for dragging their feet when paying out a claim. And that’s only if the insurance company accepts the claim in the first place without denying coverage. Delayed payments can add up in your accounts receivable and make it hard for you to accurately update your hospital budget. Revenue Cycle Management (RCM) applications streamline the claims process by automating payment processing. When those payments finally do come in, you can rest easy knowing your general ledger is up-to-date.
Track Nonprofit Accounts and Charitable Donations
Many nonprofit hospitals depend on donations to operate at the highest possible standard of care. It’s up to you to keep track of how the money is used by your institution. Hospital accounting software makes it easy to record incoming donations to generate receipts for current donors.
For-profit and nonprofit healthcare institutions usually host fundraisers to raise money for specific departments or causes within the hospital. With accurate donation records, your hospital will know when to plan future fundraising efforts.
Easy Accounting Access from Mobile Devices
Cloud-based accounting software lets you double-check your financial data from smartphones and tablets. You could be in the middle of a boardroom meeting and pull up accurate, real-time information from the general ledger.
How Much Does Medical Software Cost?
The typical starting cost for a single user on a basic plan is between $15 and $100 monthly for the service, not including setup or other fees. However, the price depends on several factors, such as the number of providers and users, the practice size, the features and functionality, and the integration needs with other medical software. Depending on which software best suits your practice, prices could quickly increase to the thousands.
What Software Does My Hospital Need?
The type of software your hospital requires will depend on several factors like size, funding, frequency of inpatient vs. outpatient services, and whether you are a for-profit or nonprofit organization.
- General hospitals offer any healthcare institution’s widest range of services. As such, their accounting software needs to be just as comprehensive. Your hospital has to be able to accurately bill all your services, like emergency room visits, labor & delivery, and medical imaging. It also needs inventory management of consumables like gowns, gloves, and other single-use materials. You’ll want an ERP-style software suite which offers as many applications as possible.
- Specialty hospitals always have a specialized function, like serving as a trauma center or only serving pediatric patients. Get specialized accounting software to cover your medical billing. In particular, medical billing and invoicing modules help specialty hospitals stay on top of invoices to patients and insurance companies.
- Teaching hospitals are a great way for medical students to learn about how the healthcare industry operates. If your teaching hospital is affiliated with a university, your funds may be distributed by the school.
- Government hospitals, as tax-funded entities, need to be totally transparent with their finances. Use a detailed general ledger application to record all accounts for accurate reporting when it’s time to review your annual budget.
HIPAA Compliant Software for Hospitals
Hospitals have to work with a lot of third-party medical businesses. When handling any sensitive patient information, it’s up to your hospital to protect their privacy and electronic health records (EHR), per the Health Insurance Portability and Accountability Act (HIPAA). HIPAA compliant accounting software allows for the safe transfer of medical billing documents, even if they contain electronic protected health information (ePHI).
Regular accounting software solutions that are not designed for healthcare may not meet HIPAA compliance. To prevent fraud and patient privacy violations, you cannot expose patient records to any person or organization not qualified. Medical billing software is designed to transfer electronic medical records (EMR), EHR, and ePHI in a compliant manner by using secure codes.
Painful Accounting Mistakes
Small mistakes with your accounting can lead to expensive problems for your hospital management. Avoid these common errors:
Missed Medical Billing Mistakes
Medical billing errors are common at hospitals simply because of the daily patient volume. All it takes is one number being entered wrong on a patient chart to lead to an incorrect bill. Patients and insurance companies may fight charges that are incorrect. Make sure all your claims are as accurate as possible to prevent payment delays.
Another issue comes from upcoding, when the medical code entered on a claim does not match the treatment given. In particular, it usually results in a significantly higher bill. Insurance companies will use any evidence of upcoding to try to dismiss an entire claim, so use the right medical billing solution to avoid these costly mistakes.
Denied or Rejected Claims Not Being Collected
Once an insurance company denies or rejects a claim, it’s back on your hospital to handle collections. You need to carefully manage patient communications to ensure you don’t lose money for services rendered.
Denied claims may be appealed, but only if there is a reason for reconsideration. For example, if a procedure isn’t covered by the insurance company in the first place, the claim will always be denied. However, if it turns out the procedure is covered but the wrong code was used, that may have resulted in an accidental denial.
Rejected claims contain some sort of error, such as the aforementioned upcoding or a simple clerical mistake. When an insurance company rejects a claim, your hospital will have to act fast to resubmit a corrected claim.
