The Pros and Cons of Outsourcing Medical Billing

Posted on May 9, 2014

If you are a doctor or a practice manager, then you would have definitely faced this question: To outsource or not? The question of whether a healthcare practice should outsource medical billing operations to India is a tough question to answer. The right answer to this question varies from practice to practice and is based on a several factors, such as, the size of the local labor market, the state of the practice’s finances and the age of the business to name a few.

Whether it is billing, clinical services or revenue cycle management, your cash flow depends on them and hence the decision on outsourcing should not be taken lightly. Before you think about outsourcing, you must carry out a thorough assessment of your staffing, costs and volume metrics. This will help you determine what is right for you.

Read on to find out the pros and cons of outsourcing medical billing services:

The Pros

  • Outsourcing is less expensive: If you are starting up a new healthcare clinic or if you are transitioning because of a staff member’s resignation, outsourcing is best financial decision that you can take. By outsourcing, you need not invest on hiring billing experts. You can also save on the cost of investing on expensive billing software, technology or infrastructure.
  • Benefit from transparency: Your medical billing service provider will provide you with regular performance reports, either automatically or upon your request. This way of working will provide you with unparalleled visibility into your medical billing operations without you having to manage or oversee any of your staffers.
  • Better consistency: By outsourcing, your service provider will be contractually obliged to carry out certain services for you, like appealing denials. You will also never have to worry about staffing, since it will be the job of your service provider to support your requirements all through the year.

Now, for the cons.

The Cons

  • Lack of control: Though several consider it an advantage that outsourcing makes the management of medical billing someone else’s responsibility, it may prove to be hard for your hands-on managers to relinquish the total control of the billing process to another entity.
  • The problem of variable cost: Most medical billing service providers of today, charge for a percentage of collections. This means, that the more you bring in, the more you will have to pay out. This system can make it hard for you to budget the expected billing expenses of your practice, since the costs will widely differ between busy and slow months.
  • Hidden fees: Before signing on the dotted line, do take time off to read the outsourcing contract carefully. Is there any start-up charges mentioned? Is there a fee for sending reports or printing out statements? What would be the fee for cancelling your membership? You must ensure that the money you save by outsourcing is not eaten away by a host of fine-print charges.

Now that you have read about the pros and cons of outsourcing medical billing, what decision would you take?

Have you outsourced medical billing or coding before? If yes, how did you choose whether to outsource or not? Let us know by leaving a comment in the box below. We, at Flatworld Solutions love to hear from you!

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1 thought on “The Pros and Cons of Outsourcing Medical Billing

  1. John Michael Seda

    Good article. Each type of billing service have its advantages and disadvantages. It’s up to you to be smart enough what you think would be best suited for your business. One that can help you improve the quality of your business and improve patient satisfaction.


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