Pros and Cons of In-House and Outsourced Medical Billing

To efficiently run a medical practice, medical billing is the most important factor. There are two options to manage medical billing –  either outsource to a medical billing company or do it In-House. And also, it’s a very crucial question for every medical practice, whether to outsource their medical billing or not.  With so many layers and challenges in medical billing which includes procedures, multiple codes for diagnosis, rules & regulations, hence it has become very arduous to deliver proper results.

The decision of how to handle these services should not be taken lightly since the business’s cash flow depends upon it being done correctly. A thorough assessment of the practice’s staffing, volume, training, technology and cost metrics should be done in order to analyze which of the two options between outsourcing and In-house medical billing is better for a practice. Let’s look at a few advantages and disadvantages of each option.


In-house Pros:

  • The biller is Accessible anytime – Billing issues can be more easily resolved when billing is done In-house. Because if there is any issue, all it takes is to observe the billing process and discuss billing issues with the staff by taking a closer look at the claim immediately. In-house Medical billing is more time saving if done correctly and easier to resolve billing issues.
  • Patient Confidentiality-– In- house billing gives control over patient records as it’s a crucial issue to maintain a patient’s confidentiality. If the confidentiality of the information is not protected, the patient might not be comfortable in sharing further information and the bonding between patient and physician would be diminished.

In-house Cons:

  • Suspension of Billing operations – If one of the staff is out of the office, the billing department can see an acute downturn in productivity as those left behind at work must work more as the staff is limited. In such a case cash flow to the office could seriously decrease.
  • Higher Costs– Software cost, training cost of staff of any technology, regulation, salary and benefits for the employees, computers and any hardware and other extras in office equipment.
  • Development & Training- The staff must be given training time to time to keep them updated about any regulation changes, change in technologies, software upgrades etc.


Outsourced Pros:

  • Let you focus on Patients- Medical billing requires lots of time, effort, knowledge and sometimes it becomes more complicated when the claims aren’t getting paid due to many reasons. Outsourcing your billing practice lets you focus on patients rather than scratching your head.
  • Consistency– Bills and claims should be sent regularly, on time & AR needs to be kept minimal as much as possible so that there is no affect on cash flow. A medical billing company does this, as it is hired only to focus on one thing that is billing & collecting money.
  • Lesser cost– While starting up a new business or with a small number of annual claims, outsourcing billing is less expensive. This would reduce the cost of salaries and benefits for employees, cost included in office equipment, Hardware and technology. Also, no extra cost for software, training and any development.
  • Experience – Medical billing companies have a lot of experience & expertise in dealing with RCM and processing claims, therefore they are inclined to identify denial trends, any sudden challenges and other issues faster than in-house billing would do.

Outsourced Cons:

  • Less authority over patient’s records– There are billing companies that own the patient & billing data and clinics have very limited authority or access to such data. This can lead to misuse of data.  However, a company like iTech does not own any data and clients/clinics have complete control over their data.
  • Hidden costs– There can be additional fees which may include startup charges, printing fee, charges for sending reports or canceling membership.
  • Less focus on Denials and A/R: Some outsourced billing companies use one or more software, hence less expertise in software being used. This can lead to less focus on Denial management and A/R delays.
  • Variable cost– Generally billing service fees from outsourced companies are based on a percentage of collection amid passive months medical billers will get paid less and during active months the pay will be higher, this makes managing the monthly expenses difficult for the practice.