Stay Informed When New Articles Come out!

written by: medvertex | October 10, 2017 | 0 Comments

Is Medical Billing Outsourcing Right for You?


The choice to outsource the medical billing for your practice can be a difficult decision. There are a variety of reasons for choosing to keep your medical billing in-house or to outsource your medical billing. The decision can be emotional and usually differs from practice to practice. Practice size, how long you have been in business, along with the practice’s financial health should be considered when making a decision.

There are pros and cons for keeping your billing in-house. On the other hand, there are pros and cons for outsourcing your medical billing. The decision is not easy and other intangibles like an improved work-life balance and the potential negative impact on a dedicated and loyal staff make the decision extremely difficult. The pros and the cons are all spelled out below which can help you make an informed decision.

Your Toughest Decision

Current Biller or Billers  –  Your decision can become extremely difficult especially when taking your existing biller or billers into account. Outsourcing medical billing may be the right decision from a business standpoint but your billing staff has been dedicated and loyal to you and your practice for many years and for some practices, the decision could affect a family member who works at the practice. What is a practice leader to do? The good news is that there are several positive options to consider.

  • Liaison – For some practices, the outsourcing company will need a point person who is knowledgeable about the practice and can help with questions as they arise.
  • Outsourcing medical billing employee –Many of the existing billing staff have gained valuable knowledge and experience over the years. Knowledge and experience which can be very useful to the medical billing company. As more and more medical billing outsourcing becomes prevalent, the need for experienced billers will expand and your staff will be needed.
  • Different employment options – Computer technology has and will continue to play a huge role in where staffs work. In fact, many people work remotely from home which may be a convenient option for your experienced billers. Working for the outsourced medical billing company but physically staying at your practice may be an option and lastly, your experienced biller or billers may choose to work for the outsourced company to take advantage of better benefits and improved education and training.

The bottom line is that there are many options for you and your staff and if outsourcing makes good business sense then considerations can be made. It might mean a better future for your staff and their families.

In-house Billing Pros

  • Retain Control – When trusted, long term employees perform the billing duties, providing more control over staff and billing processes.
  • Return on Investment – Once the staff is hired and trained to properly process claims, outsourcing will mean losing money and time resulting in a negative return on investment. 
  • Convenient Availability –This is an important reason to keep medical billing in-house because of the convenience to put out fires and make corrections as they occur.

In-house Billing Cons

  • Increased Costs – Expenses of in-house billing staff including salary, benefits, and the cost of education is high. Also, the cost of upgrading software to meet the ever changing regulations is costly.
  • Liability – In-house medical billing departments can be an area where claims fall through the cracks, denied claims are not corrected and resubmitted, and the potential for embezzlement is high.
  • Coverage Issues –An interruption of cash flow can occur when the one or two billers are away on vacation or out sick. There is no back-up creating a delay in processing claims.

Outsourcing Billing Cons

  • Relinquishing Control – Changing to outsourcing can be difficult for those leaders who prefer a more hands-on approach.
  • Variable Costs – Medical billing companies typically charge based on a percentage of collections so when volumes increase charges for outsourcing medical billing increases as well.
  • Hidden Fees –There are times when the small print can result in hidden fees and unexpected costs. For example, start-up fees, statement and report generation fees, and cancelation fees.

Outsourcing Billing Pros

  • Less Expensive – Starting a new business or transitioning because of staff resignation is costly. Running a business is getting more and more difficult with the costs of in-house billing consisting of 30 – 40% of revenues.
  • Better Revenues – Fewer adjustments for erroneous claims can result in higher profits. In addition, fee schedule analysis will ensure that you are charging insurance companies accurately. Additional benefits include faster reimbursement, improved cash flow, and lower accounts receivable days. Finally, a good billing service works hard to improve collections because if you make more, they make more money. However, this is not the case with an in-house billing staff who gets paid regadless.
  • Saving on Capital –Owning your own billing system can be very expensive. Upgrades to the hardware and software in addition to the initial outlay of the system are dauntingly expensive. Partnering with a qualified vendor saves on these expenses.
  • Tangible and Measurable Results –Outsourced billing companies generate reports detailing monthly and year-to-date data which is easily analyzed and can be used to hold the company accountable. Practice leadership will have the advantage of tracking the company’s progress through these reports.
  • Gain Control – Many practice leaders believe that outsourcing medical billing means giving up control to someone else. However, this couldn’t be further from the truth. In fact, monthly, quarterly, and yearly reports provide transparency and an ability to control issues before they spiral out of control. Additionally, today’s technology allows convenient remote monitoring.
  • Qualified Staff – Recruiting and training newly hired staff can be extremely time consuming and expensive. Believe it or not, practice leadership can enjoy the results of a skilled and dedicated staff without the hassle associated with hiring and managing the staff. Practice leadership will experience less stress by tapping into a vast knowledge base which will keep the practice safe and financially viable.
  • Keeping Track of Changing Regulations–In the current ever changing health care environment keeping up with changing regulations is a difficult task. For example, understanding the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-based Incentive Payment System (MIPS), and the Advanced Alternative Payment Models (APMs) will be critical to the financial viability of your practice.
  • Time and Satisfaction – Most of all, transitioning to an outsourced medical billing company allows for more time spent with patients. Patients are satisfied as well because they can enjoy an uninterrupted visit with their physician.


You are now armed with all of the information to make an informed decision. The ultimate goal for any business is to maximize profits by increasing revenue and reducing expenses. Considering all of the pros and the cons, is medical billing outsourcing right for you?

Let us know what you think! Just drop us a note in the blog comments below — we’re always interested in your perspective.

Leave a Reply