Should You Outsource Medical Billing?

The decision to outsource medical billing typically comes down to two primary issues: Price and Efficiency. Some practices prefer to outsource operational tasks so they can focus on patient care and other important issues. Others do medical billing in-house because they think the cost is lower than outsourcing.

One of the best articles we have come across that addresses this issue (from an unbiased third party) is an article by Software Advice. The full unedited article can be accessed directly at Software Advice article.

The article features a chart with a side-by-side comparison of the true cost of outsourcing medical billing versus doing medical billing in-house. This chart is below and includes an additional column to show the actual costs from Clinic Service using the same criteria.

Annual Cost Comparison

	In-House	Outsourced
Billing department costs	$118,000	$4,000	$4,000
Software and hardware costs	$7,500	$500	$500
Direct claim processing costs	$3,600	$122,500	$157,500
% of billings collected	60%	70%	99.7%
Collections	$1,370,900	$1,623,000	$2,250,000
Collections costs	$129,100	$127,000	$162,000
Collections, net of costs	$1,241,800	$1,496,000	$2,088,000

This example illustrates that using the basis of cost alone, outsourcing is the better choice because it produces a higher net income.

In addition to costs, what additional criteria should you use to determine if you should outsource medical billing? Here are some of the most common factors that make outsourcing an attractive option.

Outsource Criteria	Definition
Efficiency	The reason medical billing companies exist is because they can do it more efficiently than medical practices. It’s their core competency.	Clinic Service processes claims in an average of 22 days.
Get Paid Faster	Since medical billing is an outsourcers core competency, they generally have far fewer rejected claims.	Every claim is triple verified and tracked daily.
Technology	Forget the investment in practice management software and leave the software upgrades to someone else.	Clinic Service has developed and continuously improved their own software for over 16 years. Now the medical billing software is integrated into the Clinic Service C-Suite EMR software solution.
No Hassle, Less Overhead	Medical practices don’t want the added hassle and expense of employee training, managing employee turnover, keeping up with changing regulations, and employee fixed overhead costs.	We hire, train employees and monitor healthcare and legal regulations weekly. Our employees receive at least 40 hours of training per year. We will even train your staff at no charge.
Priorities	Physicians get a medical degree to help patients. Medical billing professionals get business degrees to improve profitability and let doctors be doctors.	Our only priority is to maximize the profitability of private practices. Period.
Establishing a New Medical Practice	New practices have enough to worry about when establishing a new practice. Focus on treating patients, not business administration.	Start your business off right. Clinic Service has more than 37 years of experience and a track record that surpasses industry best practices.
Need Additional Business Consulting Services	Beyond claims processing and medical billing, you need a trusted advisor who can coach you on how to pinpoint areas for improvement to maximize profitability.	Receive monthly reports and coaching to know exactly where you stand. Forget added costs—this is our standard operating procedure.

Why Medical Practices Choose to Outsource Medical Billing

To learn if outsourcing your medical billing is for you and your practice, we encourage you to read the article from Software Advice. It is reprinted in its entirety here.