Medical Billing: When to Outsource & How to Find the Right Service Provider

Some healthcare organizations gain immediate benefit from outsourced medical billing than others. Ideal candidates for outsourcing typically struggle with multiple issues at the same time, and currently do not have the resources to meet challenges and drive profitability. There’s much to be said for in-house billing, and it can be a more effective approach for some businesses. Sometimes, however, bringing in an outside expert is the best way to address issues. Is it time to outsource medical billing?

When to Outsource Medical Billing

Here are signs that your business will benefit the most from outsourced medical billing:

Collections are low, and revenues are stagnant or dropping.

There are many reasons private practices and healthcare organizations fail to meet their collection and revenue targets. It can be inefficient billing systems that lead to high volumes of write offs and denied claims, inadequate medical billing software, legacy systems, untrained or inexperienced billing staff, bureaucracy, and lack of resources. If your collections are dropping and your expenses and time to collect are rising, and you don’t know what’s wrong or how to solve the problem, it’s a great idea to work with a third party billing expert.

The right outsourcing firm will identify the issue and implement an immediate solution. The company may provide sophisticated medical billing tools that can be integrated with your practice management software to improve transparency, tracking, and productivity. It may provide experienced medical billers specializing in following-up and appealing rejected claims for specific insurance carriers. Or it may employ an end-to-end billing and practice management solution.

The practice is new or expanding.

New practices have their work cut out for them. Like any startup, they often need to learn and perform everything (including admin and billing) themselves. They also work with tight budgets. Add to the mix constantly changing regulations and complex insurance policies. For growing practices, common challenges are the need to find skilled staff quickly and handle high volumes of claims effectively.
Working with a medical billing service provider helps new and growing practices address issues cost-effectively and meet their financial goals.

The timing of medical billing outsourcing projects depends on other factors:

Business Model

The success of a practice or healthcare business depends on the business model. Besides day-to-day operations, the model includes allocation of resources and details of financing. To remain profitable and competitive, practices and health organizations must find ways to reduce costs while increasing collections. Outsourcing is one way to achieve this. If you have a traditional business model and you are experiencing issues with collections and revenues, letting a specialist handle the billing function is an option to consider. Quality medical billing companies are agile, with a focus on value, not volume. They have industry-specific knowledge and best-in-class revenue cycle management processes. They leverage data and analytics to help their clients become truly accountable care organizations. Data is the future, and data-driven medical billing models create smarter businesses. Working with a solid medical billing provider can transform your entire practice within a short time.

Availability of Talent

Even the most efficiently run practices face staffing and employee turnover issues. The lack of skilled talent is an issue in any industry, and it can be hard to find the people you need when you need them. According to the U.S. Bureau of Labor and Statistics, the healthcare industry needs about 38,000 health information technician jobs between 2010 and 2020. However, most available medical billers today lack on-the-job experience. Employee turnover, staffing issues and inexperienced billers can drastically slow down claims processing and lead to poor collections and profitability.

By working with a medical billing partner, your practice can access highly-skilled, certified and experienced medical billers at a fraction of the cost of hiring the top talent in-house. Experienced billers reduce processing errors, time to collect, and the number of denied claims. They know how to deal with specific insurance companies and get rejected claims approved. If outsourced medical billing professionals fall ill or go on leave/vacation, the outsourcing firm can immediately replace them with experienced billers. Outsourcing eliminates the financial and emotional cost associated with managing internal billing employees.

Required Expertise

Physicians and healthcare providers are excellent at patient care, but they may not be as strong on the business or financial side of things. Most doctors want to spend time with their patients, not with tedious but necessary paperwork. If the expertise required to perform admin tasks effectively and drive profitability can’t be found in-house, it makes sense to work with an outsourcing partner. An example is Medicare claims processing, which can be difficult to build internally, but is the exact skill that specialized medical billing firms excel at. Almost half of patients in a typical medical practice have government insurance coverage; working with a Medicare or Medicaid billing firm can increase collections significantly.

Ability to Cope with Market Disruptions

Regulatory changes are particularly disruptive to the healthcare industry. The financial impact of the ICD-10 transition in late 2015 is expected to be heavy for physician practices. Industry experts believe that moving to ICD-10 will require massive changes to current practice management systems, not to mention investments in staffing and training. Medical billing providers can help ease the transition, while improving collections (by 5 to 15 percent) and allowing medical professionals to focus on their patients.

And Now — Finding the Right Outsourced Medical Billing Service Provider

After you’ve made the decision to outsource part or all of your medical billing functions, the next step is to find the right medical billing service provider. The options available can be overwhelming if this is your first outsourcing project, but it is possible to find someone to which you can entrust patient records and other private medical information while meeting the financial needs of your business.

It’s important to have a set of criteria by which to evaluate a medical billing provider. If you’ve already done your research, these metrics will further help you separate the wheat from the chaff. At the very least, the following metrics should point you in the right direction: services performed, experience, quality of service, technological capability, pricing or delivery model, and scalability. In the end, your shortlist should include a few companies that are most likely to reduce time spent on admin tasks and increase time spent on patient care.

Services Offered

An outsourced medical billing company can be a specialist or a generalist. The firm may specialize in one area only, like appealing denied or rejected claims, or it may offer a wide range of medical billing and management services. Depending on your needs, one may be a better fit than the other. In general, however, many practices and healthcare organizations prefer a medical billing firm that can perform most medical billing activities, from charge entry to payment posting. If your goal is to offload most billing tasks, look for an outsourcing provider that performs these functions:

  • 1. Paper and electronic claims submission
  • 2. Charge entry/demographic entry
  • 3. Claims validation and scrubbing
  • 4. Claims follow-up
  • 5. Claims appeal
  • 6. Payment posting
  • 7. Patient invoicing
  • 8. Patient support
  • 9. Collection agency transfer services

Medical billing software services

Claims follow-up and appeals are services that third parties usually perform better than in-house billing departments; look for a company with extensive experience in this area if your goal is to boost collections. Some larger providers offer revenue cycle management BPO services, which may be useful for companies seeking to transfer responsibility for their entire billing process.


Industry experience does not refer only to the number of years of operation, but also experience with medical billing specialties. A newly-minted outsourcing firm is not necessarily inferior to a 30-year old medical billing provider. For example, the newer company may specialize in Medicare billing and employ billing professionals experienced in Medicare follow-ups and appeals. This is a huge advantage for any practice, as almost half of patients are typically covered by government insurance carriers. Other things to look for are certifications and association memberships.

Service Quality

The level of service provided by a medical billing company can be hard to evaluate at first glance, but it’s important to dig deeper. Look at testimonials and reviews from previous clients, and contact previous clients to ask about their experience. Don’t simply rely on case studies published on the company’s website, as these are often skewed to emphasize successes. Prepare a list of questions (about regulatory compliance, claim appeals process, etc.) and talk about your concerns during the consultation with the service provider.


A medical billing provider must use or be able to provide software that streamlines the billing process and improves staff productivity. Today it should be standard operating procedure for a service provider to measure results and performance based on actual data and sophisticated analytics. Also, ask about the company’s data security, HIPAA compliance, and backup and recovery procedures.

Pricing Model

Flexibility is important when working with a medical billing provider. You want to be able to access technology and expertise whenever you need them, and the pricing or delivery model must reflect that. Pricing models are typically percentage-based (the company takes a percentage of practice collections), fee-based (fixed rate per claim) or a combination of the two (percentage-based on some insurance firms and flat rate on others). Work with a company that customizes their solutions based on your changing needs.

Getting Started on Medical Billing Outsourcing in the Philippines

Learn more about outsourcing in the Philippinesoutsourced staff leasing and the Philippines as an outsourcing destination.






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