Who can Benefit from Medical Billing Process Outsourcing?

medical billing process outsourcing

All segments of the healthcare sector can benefit from medical billing process outsourcing. These include medical institutions that provide patient diagnosis, care, and support. Although outsourcing is not a magic bullet for every practice, it can be the right solution for many healthcare professionals, specialist groups, small private practices, hospitals, and large medical enterprises.

Physicians and Healthcare Professionals

Physicians, specialist doctors, dentists, physical therapists, OB-GYNs, and other healthcare professionals who run their own practice can greatly benefit from a partnership with the right medical billing process outsourcing provider.

A competent vendor can give the physician access to billing experts that tend to be expensive to hire in-house. It can also reduce the time doctors spend on tedious but necessary admin work. 

Billing and collections are labor-intensive tasks that can take precious time away from what healthcare professionals do best: patient care. By offloading part or all billing functions to a third party, doctors can spend more time with their patients while ensuring that revenue targets are met.

Although the medical billing process outsourcing company may offer a complete billing solution, such as end-to-end revenue cycle management, it can also offer discrete services. They are as follows:

  • Electronic and paper claims processing
  • Medical billing software and integration
  • Patient registration
  • Call center services
  • Electronic scheduling
  • Pre-collection and collection
  • Billing performance analysis
  • Financial reporting
  • IT support

In addition, billing companies can help with operations management such as practice administration and data analysis. They can also provide financial services, as are: reporting, benchmarking and payer negotiations. Finally, medical BPOs can help with risk mitigation services, such as ICD-11 preparation, coding education and compliance monitoring.

Medical billing process outsourcing is recommended for practice owners that do not want or are unable to manage an admin team. To maximize the cost benefits of outsourcing, many practice owners negotiate a lower collection percentage as the volume of collections increases.

Medical Groups

A medical group is a network of primary care providers that work under an administrative team.

Billing services for a medical group can be performed in-house or by a third party. Some physician groups prefer to work with a medical billing company to leverage economies of scale. Because the provider distributes expenses across multiple clients, they can provide lower rates. Medical billing providers hire the best medical billing and coding professionals who can optimize revenue flow for the group practice. The client ends up paying less for the high-quality service than if it were to build its own team of expert billers and coders.

Another benefit of hiring a dedicated medical billing process outsourcing provider is the ICD-11 expertise. The ICD-11 rollout in February 2022 was one of the biggest changes in the healthcare industry in years. Physician groups could insulate themselves from the negative impacts of the transition by working with a third party billing specialist. Medical billing companies were one of the first in the industry to prepare for ICD-11, and due to their expertise, they were able to ensure a smooth transition.

Diagnostic Laboratories

Some medical billing companies specialize in providing services to diagnostic and testing laboratories, imaging centers, urgent care centers, and outpatient surgery centers. Niche billing firms manage accounts receivables effectively, improve billing compliance, and increase revenues while lowering overall billing costs. Their services include: claims processing, revenue cycle management services, and software solutions.

Many medical billing specialists have decades of experience in particular healthcare segments, keeping them agile and responsive to ever-changing healthcare regulations. They use best-in-class technologies and processes and can give you access to the latest RCM systems and technology. They also employ certified medical billing staff that have in-depth knowledge about this segment.


Hospitals and large healthcare organizations typically have more complicated billing systems than private practices.

Hospitals have their own unique challenges, such as shrinking profit margins, new regulations that can increase audit risk and negatively impact collections. They can also have internal billing errors that can lead to 25 to 30 percent revenue losses. Even a slight billing error rate of 5 percent can drastically increase the total cost of the billing function. Hospital administrators and CFOs work with third party billing companies to address these issues and allow medical professionals to focus on patient care.

Medical billing companies also provide consultancy services and short- and long-term solutions to resolve accounts receivables issues.

Their consultancy services include:

Coding and audit

Audit services help hospitals improve coding accuracy, reduce risk and improve revenues.

Billing process evaluation

Third parties identify gaps in internal billing and collections systems and provide resources to correct the issues.

Operations support

Billing companies can provide the services of executive-level managers as well as support personnel to develop a plan to reduce hospital operational costs.

Growth management

Medical billing companies provide support and resources for expanding hospitals and healthcare organizations. Consultants identify expansion options and the best growth strategy tailored to the organization’s goals.

Sourcefit Philippines Outsourcing Blog: Medical Billing Process Outsourcing

Other Healthcare Organizations

For large healthcare organizations that struggle with financial underperformance issues, a medical billing specialist can uncover neglected cash flow opportunities through revenue cycle management. These specific areas can be difficult to identify, but an objective third party can detect opportunities for improvement. Medical billing providers use custom solutions to maximize revenue from collections and address challenges. These can be: missed charge capture, Medicare secondary billing, and digital transformation.

Medicare secondary billing is a labor-intensive process for low-value claims. A company specializing in this area can help hospitals increase collections by providing a dedicated team of Medicare billing specialists. Billing companies can increase self-pay receivables by executing self-pay processes that encourage patients to pay their outstanding balances. Medical billing companies can also ease a company’s transition from legacy systems to new billing and accounting systems.

Rise of Medical Billing Process Outsourcing

According to the Healthcare Billing and Management Association (HBMA), billing process outsourcing dates back to the 1950s. In the 1980s, outsourced medical billing became common in smaller private practices with less than five doctors. The decision to outsource depended mostly on the appetite for risk of the practice owner or manager and the willingness to entrust private information to an outside billing specialist.

Today, many healthcare organizations prefer outsourced medical billing over in-house billing. Some consider outsourcing to be the only way to provide quality patient care while controlling operating costs and meeting collection targets. For others, outsourced medical billing is a way to gain technological, staffing, and process expertise. Third party billing companies are up to date on trends and regulatory changes that deeply impact the industry, allowing them to transfer shared information to their clients.

Revenue Cycle and other Drivers

Revenue cycle management is one of the most popular functions for practices and hospitals to outsource, mainly because it is a complex activity that can be difficult to manage effectively in-house. Post-intervention activities like billing and coding, in particular, are labor-intensive and require specialized training. Ideally, they should be performed in a low-cost environment to be financially practical. Outsourced medical billing has thus become a very attractive strategy for healthcare companies.

Many firms outsource only a portion of their RCM to local or onshore third parties to manage outsourcing relationships more effectively and safeguard their reputation. However, the ICD-11 implementation raised staffing requirements considerably, forcing companies to work with offshore medical billing firms that could provide billing services and skilled billing professionals at very low rates.

Medical Billing outsourcing can also help you increase productivity and efficiency. Many large healthcare organizations are seeking comprehensive solutions for strategic reasons and not merely to reduce costs. These companies look for fully integrated solutions that include low, midlevel, and high-value services like consultancy and strategic planning.

To learn more about outsourcing, you can read our Top 8 Qualities of an Outsourcing Company in the Philippines article. We invite you to follow us on social media and to visit our website to learn more about our services.

banner-finalAbout Us: Sourcefit is a widely recognized US-managed business process outsourcing company based in Manila, Philippines. We proudly serve over 100 clients with a workforce of more than 1,300 employees. Our global centers can serve multiple markets, and our staff is highly proficient in English, Spanish, French, and Portuguese. Whether you need a few or many employees, we can help you achieve your business goals and build high-quality offshore teams.

Latest Awards

Sourcefit’s commitment to excellence has been recognized through numerous industry awards and certifications.

We recently received the Fortress Cyber Security Award from the Business Intelligence Group. Sourcefit was also honored with the prestigious recognition of Best Outsourcing Solutions Provider in the Philippines during the 2023 Business Excellence Awards.

Other awards include: FT ranking of 500 high-growth Asia-Pacific, The Marketing Excellence Awards, Inquirer Growth ChampionHR Asia Awards, among others.

Related Articles

Popular Posts

Not sure where to start? Connect with us and see how Sourcefit can help you grow your business.