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Outsourcing Medical Billing vs Keeping It In-House: The Pros and Cons
For Providers

Outsourcing Medical Billing vs Keeping It In-House: The Pros and Cons

Is it time to outsource your medical billing?

A dedicated in-house medical biller is often a key contributor to any practice’s success. Unfortunately, in-house medical billers can be hard to find or afford. And even if you do find a skilled one, it may still be difficult for them to keep up with the rapidly growing responsibilities of medical coding on their own. 

Keeping up with the changes in the healthcare industry is crucial for your practice’s financial health. In today’s landscape of ever-expanding medical debt, it is hardly a surprise to see so many doctors looking for outsourced medical billers. Third party medical billing companies are taking on a larger role in the market than ever before. 

If your practice is thinking about outsourcing billing services to a third party, this guide may be able to help with your decision. We’ll compare in-house billing vs outsourcing, sort out the pros and cons of outsourcing, and provide you with criteria to evaluate medical billing outsourcing companies. 

Why are providers outsourcing medical billing to third parties?

Many medical practices have in-house staff who handle their billing. While keeping billing services close to home may inspire a sense of comfort, it comes with all the risks inherent in the billing process. These include coding errors, organization issues, delayed payments and reimbursements, workload stress, liability, and more. If an in-house medical biller is facing all of these obstacles on their own, they can easily become overwhelmed.

Outsourcing these responsibilities to third party medical billing companies can remove that burden, taking pressure off your staff and alleviating stress. A large portion of the healthcare industry is already doing this. According to a study by Grand View Research, the global outsourced medical billing market size is projected to reach $19.7 billion by 2026, expanding at an annual growth rate of 11.8%. The experts who conducted the study attribute the growth to “new technological solutions, bad debts and bills, and expanding and changing regulatory requirements.”

If the industry shift is as monumental as the data suggests, you are probably faced with a difficult question for your practice: outsource medical billing to a company that specializes in the changing technology, or train a revolving group of in-house staffers every two to three years. Let’s dive into the advantages and disadvantages of medical billing outsourcing.

In-house billing vs outsourcing

Besides the obvious difference in billing location, there are quite a few differences to consider when thinking about outsourcing medical billing. In general, outsourcing sacrifices some control for better accuracy and a much smaller workload. But let’s dive into the details. We’ll explain each point in the section below the table.

Table: In-house vs outsourcing pros and cons for medical billing

Benefits of outsourcing medical billing

Industry-specific expertise

When outsourcing medical billing to specialists who only handle medical bills, you ensure claims are handled with a greater degree of expertise. Even if your in-house medical biller has a long and impressive resumé, they may not be able to compete with the knowledge a team of full-time experts can amass. An in-house staffer is bound to have more responsibilities around the office than just billing, whereas a third-party billing team can spend their non-billing time researching new billing technologies and regulations and fully dedicate themselves to the craft. 

Reduced risk of errors

Everyone makes mistakes—but mistakes in medical billing can be costly. One authorization error, incorrect patient detail, duplicate billing, or botched NPI number can significantly delay your medical payments.

Outsourcing medical billing usually provides you with a much larger safety net for errors. Billing experts have quality control measures in place to avoid errors, and many medical billing outsourcing companies also have a support team dedicated to fixing any errors that may occur.

Less work for your staff

The recent growth of medical debt means workloads are increasing in medical offices everywhere. Taking the burden off your in-house staff goes a long way toward your practice’s overall efficiency. You can either save money by running your practice with fewer employees, or assign your in-house team to other administrative tasks that need to be done. 

Lower costs

Working with in-house medical billers often entails a great deal of hidden costs. From overhead expenses like benefits and payroll to software and training costs, there are a lot of ways outsourcing billing service duties can save you money.

When you add this to the amount you save by reducing errors and optimizing your billing efficiency, it is hard to imagine a more cost-effective maneuver.  

Faster reimbursements

Many outsourced billing companies handle payments and file claims as soon as possible. With larger teams of medical billers, they generally do not face as many bottlenecks as a small in-house team might. Meaning the money gets back to you and your patients faster. Also, the reduced rate of errors cuts back on delays you might encounter with a mishandled claim. 

Greater transparency

People often think outsourcing medical billing means relinquishing control. But in reality, most third party billers have metrics in place to incentivize high-quality performance and communication. Because medical billing services have high competition, they may be more motivated to keep you updated on delays or changes to your payments than an in-house staff would.  

Additionally, outsourced medical billing companies must be HIPAA-compliant in order to exist. Their staff routinely handles sensitive personal health information, so they cannot afford to make mistakes with HIPAA. Leaving HIPAA-compliance up to an in-house staff adds another potential error risk as well as another burden to your staff’s workload.

Easy EHR integration

Managing electronic health record (EHR) systems is one of the most frustrating and time-consuming jobs for medical billers, especially if your practice uses multiple systems. Major third party billing companies typically have software that integrates with many EHR systems. Make sure to confirm their software works with your particular EHR(s) before signing up. 

Questions to ask when considering outsourcing medical billing:

Do you have a dedicated medical biller in house?

If there is someone on your staff solely dedicated to medical billing, what is their workload like? Do you think they would be more efficient or effective if they could spend more of their time handling other administrative tasks? 

If you do not have a dedicated medical biller in-house, how is the billing workload divided? Might your practice benefit from streamlining a job split between multiple employees?

Is your team stressed with the billing workload?

This is the single biggest change that comes with outsourcing medical billing: less stress. If your billing team seems stressed by their workload, you have one surefire way to change that.

How to choose between medical billing outsourcing companies

The benefits of outsourcing medical billing are clear, but that does not necessarily make it easy to choose the company that’s right for your practice. Here are a few considerations to help with your decision.

What medical billing services do they offer?

Not all medical billing services are the same. When vetting a company, ask them how much of the billing process they handle themselves. Some medical billing companies ask you to code and upload medical bills in-house, while others create, code, file, and track claims themselves. Many fall somewhere in between. 

How much transparency can you expect?

Because trust is such an important aspect of outsourcing medical billing, it never hurts to assess how much communication a third party biller will provide. Some share all of their payment and claims-tracking information with you as soon as they get it, whereas others work mostly behind the scenes. 

How quickly will they get to work on your claims?

If the company you are vetting already has the right software to integrate with your EHR, they can ideally get started processing your claims right away. But if you or they have to change software, or if they seem especially backed up at the moment, you might have to wait a couple of months. 

It pays to be thorough. Ask medical billing companies how soon they can start and how much volume they can handle before you make a decision.

How much do their services cost?

This is probably the most obvious point, but there are vast differences in the costs of outsourced medical billing companies. Taking some time to find the right company at the fairest price point is important.

Where does SuperDial come in?

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About the Author

Harry Gatlin

Harry is passionate about the power of language to make complex systems like health insurance simpler and fairer. He received his BA in English from Williams College and his MFA in Creative Writing from The University of Alabama. In his spare time, he is writing a book of short stories called You Must Relax.