What are the Pros and Cons of In-House vs. Outsourcing?

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To Outsource or Keep In-House

As the insurance industry gets increasingly complex, more and more medical practices are choosing to outsource their medical billing. In many cases, it’s the best financial option. But, not always. Here are some factors you should consider before choosing to outsource your medical billing:

  • Age of your business
  • Size of your workforce
  • Volume metrics
  • State of your practice’s finances
frustrated person billing

Keeping that information in mind, scan the list below for the pros and cons of both options.

In-House Medical Billing

Pros:

  • Control – When medical billing is in-house, YOU have control over your finances. Confidentiality and security issues are less of a concern.
  • Investment – If you’ve spent a lot of money and time on medical billing software and training your staff, it may not be worth the money to make the switch.
  • Proximity – If you have a medical billing question, you can just walk down the hall and ask your staff. No long hold times over the phone or trying to get ahold of the right person in a huge medical billing company.

Cons:

  • Cost – The cost to pay in staff’s salary, benefits, software and training often exceed the cost to outsource. Take a look at the numbers. The size of your business is usually the biggest factor.
  • Liability – Your staff isn’t perfect and often times, they are overwhelmed and underpaid. You may find they have been ignoring encounter forms, discarding superbills, or failing to appeal claim denials due to a lack of time or knowledge.
  • Support Issues – When one of your staff gets sick, goes on vacation, takes leave, or quits, your operations, and cash flow can be stalled.

medical invoice

Outsourcing Medical Billing

Pros:

  • Increase Cash – Medical billers work on your behalf to maximize your revenue. They go to bat with the insurance companies to make sure you get the best rate for the services you provide.
  • Expertise – Medical billers are experts in the insurance field. They have been trained on the ins and outs of the industry and know how to aggressively negotiate, appeal and make collections on your behalf.
  • Highly Incentivized – Because they are paid a percentage of your total revenue (usually 7-9%), medical billers are highly motivated to make you more money. If you don’t get paid, they don’t get paid. It’s a win-win for both parties.

Cons:

  • Less Control – When a third party takes over your medical billing, you are going to have less control and sometimes, less knowledge of how insurance claims are being handled. Some doctors prefer to ‘pass the headache’ to someone else, but others may not.
  • Variable Cost – Because medical billers get paid a percentage of your practice’s total revenue, it can be difficult to budget your monthly expenses. During slow months, you will obviously pay less to the medical biller, but in busy months, you will pay a lot more.
  • Hidden Fees – Take a careful look at the fine print of a medical billing company’s contract. Ask directly about additional fees. Often times, there is a $250 initiation fee, a printing fee, and other extra charges that aren’t included in the monthly contract.

Learn More

Read our Medical Billing Buyer’s Guide for more details on medical billing.

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