Pros and Cons of Outsourcing Medical Billing


Outsource your medical billing or keep the procedure in-house? This is the dilemma facing doctors and healthcare providers everywhere. The correct solution varies from practice to practice based on many different variables including: business age, size of the local labor market, and the state of the practice finances. Other than practicing medicine, billing and revenue cycle management are the most vital processes of your business.

Your income depends on them and deciding how to perform these functions is crucial. Ideally, you should do a thorough investigation of your practice’s cost, staffing, and volume to ascertain which choice is best. When considering your options, you will need to examine what many providers view as the major advantages and disadvantages presented by each billing alternative.

In-House Medical Billing


  • Taking Control: Often times trusted staff is performing medical coding and billing tasks, however, many doctors and administrators prefer having the supervision and control of financial operations that in-house billing allows.
  • ROI: When a practice has invested time and money on billing technology and training, outsourcing the process means losing countless resources spent that can never be recovered. If an effective system is in place it may be preferable to refine existing procedures to earn the most from your investment.
  • Location: Having access to your medical billing is extremely beneficial in the event any issues arise, the close proximity allows providers to oversee the billing process and address any problems as they occur.


  • Greater Expenses: The cost of billing technology, software, employee salaries, and benefits can be expensive. These expenses can amount to more than the price of outsourcing a practice’s billing service to a third party.
  • Risks: Billing department security can jeopardize a practice if ignored. Embezzlement and general employee neglect including: forgotten encounter forms, discarded superbills, and unappealed claim denials can often go overlooked unless financial operations are monitored closely and regularly.
  • Staffing Issues: If your billing department consists of only two or three employees or worse yet if you have a single biller, your business – and your income – can come to a halt if a member of the staff gets sick, takes vacation time, or leaves the practice.

Outsourced Medical Billing


  • Cost Effective: If you’re opening a new practice or struggling with your financial situation after an employee’s resignation outsourcing your billing is the least expensive solution. Check out this sample cost analysis on this topic from Physicians News Digest. – ATTACH COST ANALYSIS**
  • Practice Visibility: An effective medical billing company should have the ability to generate various comprehensive reports at any given time. This convenience grants providers an in-depth view into their financial situation without requiring the micromanagement of any employees.
  • Consistent Results: When outsourcing your billing the company you hire is obligated to perform the agreed-upon services with a certain rate of success. An added bonus is never having to hire staff as support is included in most contracts.


  • Giving Up Control: Although outsourcing the stress and labor involved with billing to another company may feel like a relief for many, it can be difficult for some to hand over those procedures and responsibilities to someone else.
  • Fluctuating Prices: Most billing companies charge a percentage of the revenue they collect – the more your practice makes, the more you’ll spend. This poses difficulties when it comes to budgeting billing costs – especially with the vast differences between slow and busy months.
  • Fine Print: When outsourcing your billing read all contracts extremely carefully. Very often there will be hidden fees for printing statements, generating reports, and other additional startup charges. Cancellation fees can also cause you to incur unnecessarily high expenses. Be certain that the money you save by hiring a billing company isn’t outweighed by the charges hidden amongst the fine print.

An article about Outsourced IT Services.

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