What is medical billing outsourcing?

If you’re a physician, doctor, or practice manager, you know how important medical billing is for medical practice success. The hardest and the most financially impactful decision that a practitioner has to make is choosing between outsourcing medical billing operations or keeping an in-house billing staff. As medical billing is very demanding and incorporates heavy tasks, many medical offices decide to outsource.

What is medical billing outsourcing?

Medical billing outsourcing implies that a practice decides to hire a medical billing company to carry their billing process. By medical billing outsourcing, practices can save on training, software, salaries, and benefit costs. They can also save money by eliminating the need for office supplies, furniture, and hardware purchase. Many practitioners choose outsourcing medical billing to get high-quality service at lower costs.

When should your practice outsource its billing services?

Suppose you are wondering when to opt for outsourcing medical billing services. In that case, it is best to outsource medical billing services when your medical practice has the following circumstances.

  • Outdated patient accounting system
  • Prevailing credentialing issues 
  • Unstable and erratic reimbursement models.
  • Low net revenues
  • Unexpected cash recoveries 

How to select a suitable outsourcing medical billing company?

If your medical practices decide to outsource, here are a few tips for selecting the right medical billing company.

Proven expertise

Ensure that the medical billing company you choose has a good reputation. They should also have an understanding of your practice’s needs.

Solid references

Another thing that should be considered while choosing a medical billing company is the recommendations from other practices. This way you’ll have a better idea regarding the kind of model that will suit your needs.


Medical billing outsourcing companies must give clear information. They should be upfront about the terms of the agreement, implementation plans, and fee structure. In addition, there should be no hidden costs.

Current technology

It is important for a medical practice to ensure that medical billing vendors use the latest technology to get the work done.

It is important to outsource from the medical billing company that does for you what really needs to be done. If they deliver what you need, then you are good to go!

PROs of outsourcing medical billing

It turns out to be less costly!

Medical billing outsourcing is less expensive. It is ideal to outsource when you are starting a new medical practice or transitioning because a staff member resigns.

It has more transparency!

Outsourcing from a third-party medical billing company will give you the performance reports automatically. So in this way you will have a clear look into your billing operations and procedures without micromanaging.

It provides improved consistency!

Medical billing outsourcing will provide you with an enhanced consistency level in terms of financial performance. A third-party medical billing company indulges in performing financial tasks like appealing denials for your success. The outsourced medical company supports all your financial needs and meets your goals, so your practice runs smoothly.

It provides helpful analytics!

Medical billing outsourcing from a vendor offers helpful analytics for your practice. These analytics provides a clear picture of:

  1. How are accounts receivable aging?
  2. How do patients react to a change in reimbursements?

It provides software solutions!

Some medical billing companies also provide solutions to

  • Billing Services
  • EMR software
  • Practice Management software

They may also provide administrative capabilities like eligibility verification and patient follow-up with an additional fee. These medical billing services further help streamline workflows.

CONs of outsourcing medical billing

Loss of direct control

It is believed that by medical billing outsourcing, you may lose direct control of who is billed and when. You may not be able to supervise directly. This might put your medical practice in a vulnerable position.

Variable cost

Many medical billing companies charge a percentage of total collections. This implies that while outsourcing, the more you earn, the more you’ll pay. It may make it harder to budget your practice’s billing expenses because costs may differ between slow and busy months.

Risk to patient satisfaction

Most patients like to walk into their doctors’ room to make their payments or discuss the subtleties of their bills. They may not be satisfied by discussing important matters regarding their bills over the phone.

Possible hidden costs

Hidden costs are associated with preparing for your medical office, switching from in-house billing to outsourcing. It is a possibility that more money is required for legal fees.


Medical billing outsourcing may come with some limitations. The medical billing services they provide might be limited. The reason behind it may be:

  1. Lack of access to information
  2. Lack of communication 

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