In House or Outsourced Medical Billing - Which Model Is Right For Your Practice?

Dec 14


Albano Fidel Cafe

Albano Fidel Cafe

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Choosing between in-house billing or outsourced medical billing staff is one of the most financially influential decisions a medical practice has to make. Honestly speaking, there are no hard-and-fast rules in it. Every medical organization has its unique business dynamics, vision, and professional objectives. Therefore, one-size-fits-all does not work here.


However, In House or Outsourced Medical Billing - Which Model Is Right For Your Practice? Articles if you are a medical practice and not sure which system will work best for you, this article will help you understand both of them in-depth and make an informed decision.

In House Medical Billing


More Oversight of Day-to-Day Operations

Having an in-house billing department provides you with direct control and oversight over the financial operations and processes. You can physically reach your staff at any time and get quick feedback on any queries. Plus, in-house staff will also implement any instructions you pass on right away. Strict in-person oversight of your finances will lead to greater transparency in your operations.

In-house billing is a suitable option for if you are reluctant to relinquish control of your billing processes to a third party.  


When you have a dedicated in-house billing team, you can make your own rules. Contrarily, when you outsource a third-party billing company, you will be locked by rules in line with the contract you will sign off with them.

High ROI

Since you manage every little billing process of your practice on your own, it would be easy for you to keep your cost under check. Needless to say, greater cost control will maximize your return on investment (ROI). 


Higher Costs 

The costs for in-house medical billing is certainly too high than outsourced billing because you will have to spend money on recruitment, infrastructure and software etc. 


Liabilities are likely to increase when you have an in-house team to manage your business processes, particularly your billers aren’t aware of the repercussions of HIPPA privacy and PHI security violations. You will have to ensure that your billers are not discarding any superbills or ignoring encounter forms to minimize the possibility of claim rejection.

When your billing operations are outsourced, liabilities on your side will be lesser.

Support Issues

Another key issue for having an in-house medical billing team is supporting. If you operate a small practice, you have to rely on one or two billers to manage your billing operations. As your practice grows, you will need more resources to manage a bigger client base.

Additionally, when even one of your billers gets sick, goes on vacation, or quits the job, the cash flow of your practice can be stalled, which will seriously affect your profitability.

Outsourced billers, on the other hand, are contractually obliged to ensure consistency in the billing operations all year round. 

Outsourced Medical Billing



Most of the medical billing service providers have extensive experience and experts who receive constant training to stay on top of current medical coding requirements and advancements within the industry. 

They handle hundreds of claims on a regular basis and know exactly what it takes to get the payment done seamlessly.

On the other hand, when you decide to go with in-house billing team, the first challenge will be to find and recruit qualified individuals. 

Another flipside of in-house billing is that if the size of the team is small, the likelihood of errors will be high.

Since outsourced billing providers have a bigger team, they can handle a wide variety of medical claims and ensure an optimum level of accuracy. 


Medical practice practitioners are busy in taking care of their patients; they don’t have time to recruit, train, and manage an in-house staff and monitor track their billing operations. 

Outsourcing your billing to a third-party frees up time and resources for you and enables you to spend more time with your patients and work towards achieving your professional goals.

Reduced Office Management Costs

Outsourcing billing operations to a third-party helps medical practices save the expenses of in-house start-up costs, staff salaries and benefits, software and equipment. 

The standard billing rates of outsourced billing companies are much more affordable than the in-house setup. Most of the medical companies offer a flexible pricing structure and usually charge only a very small percentage (usually between 5-10 per cent) of the total revenue of your practice.

Since medical billing companies know that they will get paid when you get paid, they work with extreme dedication and diligence to ensure that you earn maximum reimbursements. 

Faster Claim Submission  

The extensive experience and expertise of outsourced companies allow them to submit claims more quickly and reliably than in-house billers. Accurate claim processing, AR follow up, and payment collection helps the practice to maintain a steady cash flow.

Plus, outsourced billers can also mend any rejected claims quickly and efficiently to help the practices get their money as soon as possible. 

In-house medical billing, on the other hand, poses a risk of low claim success rates, which can be seriously threatening to your cash flow and the overall health of your business. 


Less Oversight

When you hire a third-party billing service provider, you will have less direct control over the management of your billing processes. For example, if you have any questions about insurance claims or have any instructions to pass on, you will have to schedule a phone call with your provider. 

Additionally, by outsourcing your medical billing processes off-premises, you won’t get enough knowledge about how claims are handled. 

Communication to Patients

Another issue with outsourcing your medical billing operations is that you do not have access to the billing records of your patients. Therefore, if a patient has a question related to insurance or billing, you will need to communicate with the billing service provider. 

Setting up a communication protocol with your service provider is an effective way to prevent any frustration.

Variable Costs

Another disadvantage of outsourcing your billing processes is that the costs may fluctuate widely between slow and busy months, which makes it different for the medical practices to budget their monthly expenses. 

Possibility of Shut Down

If the medical billing company shuts down its operations due to less number of projects or any other reason, your billing processes and cash flow will be hindered until you find an alternative immediately. 

Hidden Fees

Most of medical billing services providers look for avenues to make more money. In a bid to increase their revenue, they may try to add some type of hidden fees. To prevent such a situation, it is advisable for you to read any contract carefully before you sign it off.  

Final Words

Both in-house medical billing and outsourced medical billing have their sets of pros and cons. You will need to take into account several factors like age and size of your business, and state of the finances of your practice and choose the best way to go. 

Since handling billing, in-house can be complex, expensive and overwhelming, more and more healthcare providers today prefer to outsource their billing to bring simplicity and ease to the everyday life of their practice. 

The flipsides of outsourced billing are minimal when you choose the right medical billing company.

If you decide to go outsource your billing operations off-premises, make sure that the company you choose is experienced, knowledgeable, upfront about its prices and has a strong client base. 

Medical Billing Experts, You Can Trust

Precision7 Inc. USA is a full-service revenue cycle management company serving a multitude of healthcare providers throughout the United States for over a decade now.  

We provide medical practices with greater control of their billing through support for each phase of their revenue cycle management, allowing them to focus on their core job of taking care of and maximize their revenue stream.