Last Updated: February 07, 2023

Compare Pros and Cons of Outsourcing Medical Billing

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When medical billing becomes difficult, inefficient or burdensome, many doctors choose to outsource the task. Medical billing can be outsourced to a professional medical billing firm, an at-home specialist or a practice management company.

As with any decision, there are pros and cons to outsourcing medical billing. Ultimately, the decision should be made with careful consideration of many factors, including your staffing resources, experience with billing and personal comfort.

Cost of Outsourcing Medical Billing

Most medical billing firms charge 3 percent to 10 percent of revenues, depending on the services they provide, the volume of business you send them and the amount of your average bill.

Outsourcing Medical Billing Pros

  • Saves time - Medical billing is an extremely complicated and time consuming task. Outsourcing the task frees up time for you to focus on your patients.
  • Reduces errors - Hiring a medical billing firm will greatly reduce errors due to improper coding, slow claims processing and inadequate follow-up. You will reduce the number of rejected claims, which is good for your bottom line.
  • Saves resources - Outsourcing means your staff won’t be bogged down with the difficult task of billing. You won’t have to ask staff members to divide their time between billing and other tasks.
  • Faster collection - Medical staffing firms are focused exclusively on handling billing; they’re not distracted by other tasks. This translates to claims that are submitted faster and money that is collected sooner.
  • Better negotiations - Medical billing firms are skilled in negotiating with insurance carriers. Chances are, your employees do not have the same negotiating experience.

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Outsourcing Medical Billing Cons

  • Fees - Medical billing firms usually charge between 3 percent and 10 percent of revenues. However, keep in mind that if they collect a greater percentage of the money due than your in-house staff, you could recoup those costs.
  • Loss of direct control - When you outsource, you lose direct control of who is billed and when. That can be a hard pill to swallow for some doctors, especially those that like to be hands-on in all aspects of the practice.
  • Hidden fees - Some medical billing firms charge for things like setup, printing statements or canceling your contract. Make sure you read the fine print before hiring a firm to avoid paying hidden fees.
  • Patient relationships - Some doctors believe that they maintain better relationships with their patients when the billing is handled in-house. When you outsource, there’s no way to be sure that communication with patients is being handled as you would prefer.

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