Outsourcing Medical Billing

Medical billing is a complex process involved for the healthcare providers to get reimbursed for services they provided to patients. Healthcare providers usually ponder whether to keep their medical billing process in-house or to outsource it to a third party medical billing company. The process of making this decision not only involves looking at facts and stats but also a psychological. Many providers want to stay in control on every process; to let it go requires compelling reasons.


To keep the medical billing process in-house it requires


  • Office space
  • Medical coders
  • Medical billers
  • Medical billing software
  • Electronic health records
  • Clearing house
  • Training cost
  • Printers
  • Scanners and more


It is quite expensive to recruit, manage medical coders and billers. Staffs need to be continuously trained to stay up with all the latest changes in policies and procedures in the industry. It is just not the hourly rates but also worker's compensation, employee health insurance, employer tax, vacation/sick time and more. The upfront cost required to own enterprise medical billing software is very high. Repairs and maintenance expenses are also usually expensive. Overall administrative expenses involved in having a in-house medical billing is expensive. It also requires lot of personal time and involvement in managing the resources.


Outsourcing medical billing process eliminates huge initial investments. Medical billing companies offer two different types of pricing models.


  • Percentage on Collections: In this model the billing company gets paid if the providers get paid. They usually charge a percentage (this differs based on specialty) of the total collections made per month. There is no additional or hidden cost to this. This is a simple and straight forward model. Providers are billed once a month.


  • Pay per claim - In this model the billing company charges per claim and follow-up. They provide a fixed pricing per claim. Total number of claims billed per month are calculated and invoiced every month.


Outsourcing medical billing is cost effective and provides better results for the healthcare providers.


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