In-House vs. Outsourced Physician Billing: Which is Better for You?

Physician billing and coding processes were never easy, and as the days pass by the complexities are not showing any sign of halt.

The industry is growing rapidly with immense job opportunities and changing administrative protocols. However, at the same time, providers are facing challenges to meet the billing and coding requirements.

Consistent labor shortage, increasing wages and competitive market are pushing practices to adapt a new approach towards billing and coding practices.

Usually, physicians handle their practice management to have a better control. But as your practice grows with time, it is essential for you to choose between in-house and outsourced medical billing staff.

In this blog, we have discussed the advantages and disadvantages of both to help you in informed decision-making.

Pros and Cons of In-house Physician Billing Services

Pros

1) Retaining control:

Entrusted, long-term employees are always an asset for your practice. They have been executing your physician billing and revenue cycle management for a long time and have a clear idea about the organizational goals. Thus, you will have complete control over the RCM.

2) Flexibility:

With an in-house billing team, it is easier for you to track and observe every step in your billing process. Thus, it becomes easier for you to identify the loopholes in the process, and you can implement strategies in your own way.

3) Accessibility:

The accessibility of your in-house staff is substantial when any issue arises. With an instant collaborative approach, you can resolve all the issues within the administrative process.

Cons

1) Higher Costs:

It’s widely recognized that managing an in-house billing team often comes with significant expenses. Between paying salaries, providing employee benefits, and investing in the necessary technology and systems, the overall cost tends to be higher than outsourcing to a third-party billing service.

2) Support Challenges:

Running an in-house billing department with just a small team—say, two or three people—can create major disruptions if one person is unavailable. Whether it’s due to illness, vacation, a leave of absence, or sudden departure, these gaps can seriously slow down your operations and cash flow.

3) Increased Errors:

While your in-house team may be well-meaning, they often lack the specialized tools and performance tracking systems used by dedicated revenue cycle management companies. As a result, billing errors are more likely to occur, potentially leading to missed payments and delayed reimbursements.

Pros and Cons of Outsourced Physician Billing

Pros

1) Cost effective:

Outsourced physician billing services from a revenue cycle management organization are less expensive compared to an in-house billing staff. You don’t have to invest your time and resources in hiring, training or retaining employees. Also, no investments are required for software systems or infrastructure. Instead of that, physician billing companies might charge you a minimal portion of your revenue.

2) Better cashflow:

Improved accuracy and compliance are the two critical factors contributing to reduced claim denials and accurate reimbursements. Furthermore, they work on aged accounts of your practice, handle denials with expertise and experience. This ensures enhanced cashflow in your facility.

3) Enhanced productivity:

Outsourced physician billing companies have a huge talent pool of expert medical billers and coders, who work as an extended operational arm for your practice. While maintaining an in-house team means you are relying on two to three employees, an outsourced company provides you with a team of dedicated RCM experts working on your practice.

4) More time for patient care:

When you have a team of professional billers and coders handling your physician billing tasks, you have more time to focus on your core competencies. As a result, you have better patient health outcomes and enhanced reputation.

Cons

1) Hidden costs:

There might be some companies who can surprise you with hidden costs of service. To avoid this issue, you need to understand the contract and review it carefully.

To Conclude

Choosing between an in-house and outsourced billing is a tough but critical decision as it can make or break your practice. Using specialized physician billing services can greatly improve your practice’s performance in the long run.

Outsourcing billing can save time and resources, allowing your staff to focus on patient care and other important tasks. Additionally, specialized billing services often have access to the latest technology and industry knowledge, leading to more accurate and efficient billing processes.