A Continuing Conundrum: Inhouse Vs Outsource Medical Billing

Digital Transformation is charging through the healthcare and medical services industry. The COVID-19 pandemic has shown how medical practices and streamlined their operations are thriving in this demand wave. One key aspect of effective and efficient healthcare practice is effective billing and revenue cycle management. Since medical billing is a highly resource-intensive and challenging aspect of running a practice, there is much discussion over the pros and cons of in-house billing versus outsourced medical billing. In-house billing has its share of advantages, but in recent years, an increasing number of medical practices, and healthcare providers have switched to outsourced medical billing.

The U.S. medical billing outsourcing market size is predicted to reach USD 7.8 billion by 2026. Factors like a growing burden on revenues and profits, declining Medicare payments, and escalating billing volumes have led to the need to decrease in-house processing expenditures. However, before we take a comparative analysis of the pros/cons of both, it is essential to complete a cost-benefit analysis, the cost of billing in house versus the cost of contracting the service outside. Consider resources, training, technology, infrastructure, and other resources when calculating your in-house expenditure on billing.

In-house billing versus Outsourced Billing: What should you opt for?

The success of any healthcare practice depends heavily on optimal billing. Is the healthcare facility competent enough to handle diverse functions? Hospitals are already facing a decline in revenues due to shrinking margins, reduced reimbursements, and staffing problems.

Outsourcing RCM and billing is increasingly becoming the smarter choice for doctors. Even the smallest of practices can benefit immensely with improved patient care, dedicated focus on patient cycles, and improved ROI. According to the Medical Group Management Association (MGMA), nearly 50-65 percent of denials are unaddressed. It doesn’t just mean loss of revenue; it also has a long-term impact on your practice. With outsourced billing, you can streamline your practice and make it more patient-centric. Here’s a detailed look at the pros and cons of in-house versus outsourced billing.

In-house Billing Pros


  • More control

Many doctors, healthcare practices like to retain control over the financial operations by keeping them in-house and find it easier to trust their trained resources carrying out the billing. Easier access Having instant access to your in-house billing department is often considered a significant benefit of keeping things in the house. All it takes is a walk across the floor to address the query or problem at hand.

  • Confidentiality

One primary concern is over data protection and confidentiality. Some medical specialties find it safer to keep the billings in-house due to sensitive nature and patient-doctor confidentiality.

In-house Billing Cons


  • Expenses

In-house billing startups and smaller practices mean many upfront expenses such as labor, technology, hardware, billing software, and training. Besides, it means ongoing overheads for maintaining the system and hiring resources. Also, consider the office and rental space for employees, workstations and filing cabinets, etc.

  • Employee benefits

Further, medical practices incur many expenses on benefits rendered, such as vacation pay, insurance, workers’ compensation, etc.

  • Competence

You need to hire and train the right kind of billing personnel. If the personnel is not up to date, it can harm your billing cycle, including rates of denials, un-appealed claims, and lower reimbursement rates.

  • Staff dependency

If you are short of staff due to absenteeism or attrition, it impacts billing productivity and cash flow. Hiring staff and ongoing training are also an additional responsibility.

Outsourced Billing Pros


  • Better focus on practice and patient care

By outsourcing medical practice, you can focus on your core activity of medical practice. Since medical billing needs a lot of time, effort, and resources, it becomes an additional headache for the practitioner to manage.

  • Revenue cycle management

With updated RCM technology and analytics, you have improved patient care, dedicated focus on the patient cycle, and increased cash flow with better optimization prospects.

  • Regulatory compliance

Healthcare compliance has legal, ethical, and reputational elements to it that require expertise. The regulations cover several billing and reimbursement issues, processes, policies, HIPAA laws, and other rules as applicable. An outsourcing partner with a team of experts is better equipped to meet these regulations better.

  • Cost-effective

Outsourcing billing is cost-effective but more so if you are starting up or have a smaller practice. Keeping billing personnel and software up to date with the latest rules and regulations is time-consuming and quite challenging.

  • Transparency and visibility

The right billing company and software can generate comprehensive reports and insights. It provides doctors with insights and better visibility of the status without having to micromanage employees.

  • Expertise

Outsourced billing companies are experts and experienced in this domain. Therefore, they can identify denial trends, other anomalies, and challenges better than in-house staff.

Outsourced Billing Cons


  • Lesser control

Many medical practitioners are concerned about the loss of control and privacy when sharing critical patient information.

  • Compliance concerns

HIPAA security and privacy concerns are another valid concern when outsourcing the billing as any breach in compliance can adversely impact the practice. However, many solutions like Omni MD’s medical billing service are fully compliant and improve your operational efficiency with an integrated MU, ONC-ATCB, MACRA-enabled EHR system with an exceptional billing tool outstanding service solution.

  • Fine print

Not all outsourced companies are equal. There is a great deal of research involved in selecting the right provider. You also need to read all contracts extremely carefully. Ensure there are no hidden charges and also find out if there are any cancellation charges.

  • Final word

While many practitioners prefer to carry on with in-house billing, the outsourced billing advantages are far too obvious. Your time and expertise are better spent on patient care and improving your practice, rather than the nitty-gritty of paperwork and administration. But above all, the cost factor is too hard to ignore. By outsourcing the billing services, practitioners can save anywhere between a few thousand to a quarter-million dollars. Just for a 3-Physician practice, the savings can range up to $200,00. It is easy to find out the potential savings for your practice by using this savings calculator. To find out how effective our system is and how much you could save, please leave a message, and our representatives will be in touch with you. A cost analysis will certainly help you to make a prudent choice.

Why not schedule a free consultation so we can better understand you revenue cycle needs and show you how outsourcing medical billing can get you paid quickly, efficiently, and affordably?

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