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

Healthcare organizations that are facing multiple challenges and struggling to achieve profitability may benefit greatly from outsourcing their medical billing. While some businesses find in-house billing to be effective, outsourcing can provide the advantage of bringing in an experienced expert to address complex issues. Ideal candidates for outsourcing typically lack the resources to tackle these challenges on their own. If your healthcare organization is struggling to meet the demands of medical billing, it may be time to consider outsourcing as a solution.

When to Outsource Medical Billing

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

1. Collections are Low, and Revenues are Stagnant or Dropping

Many private practices and healthcare organizations fail to reach their collection and revenue goals. This can be due to various reasons such as inefficient billing systems that lead to high volumes of denied claims and write-offs, inadequate medical billing software, outdated legacy systems, untrained or inexperienced billing staff, excessive bureaucracy, and limited resources. If you’re experiencing a decline in collections and an increase in expenses and time to collect, and are unsure of the root cause or solution, a third-party billing expert could help you sort out these issues. 

A competent outsourcing firm will quickly identify the issue and implement an effective solution. They may offer advanced medical billing tools that seamlessly integrate with your practice management software to improve transparency, tracking, and productivity. The company may also provide experienced medical billers who specialize in following up and appealing denied claims from specific insurance carriers. Alternatively, the firm may employ a comprehensive end-to-end billing and practice management solution.

2. The Practice is New or Expanding

Starting a new practice can be challenging. It requires entrepreneurs to manage every aspect of the business, including administration and billing while working within tight budget constraints. New practices must also be prepared to navigate changes in regulations and complexities of insurance policies. As practices grow, common obstacles include finding skilled staff quickly and handling high volumes of claims effectively. Working with a medical billing service provider helps new and growing practices address these issues cost-effectively therefore meeting their financial goals.

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

3. Business Model

The success of a healthcare business or practice relies heavily on its business model. Besides day-to-day operations, the model encompasses daily operations as well as resource allocation and financing details. To remain competitive and profitable, it’s essential to find ways to reduce costs while increasing collections. Outsourcing is one effective solution to achieve this. A specialist can help you with issues concerning collections and revenues.

Quality medical billing companies have extensive industry knowledge and efficient revenue cycle management processes. They leverage data and analytics to help their clients become accountable care organizations. Data is the future, and data-driven medical billing models create smarter businesses. Working with a reputable medical billing provider can quickly transform your entire practice.

4. Lack of Talent

Even the most efficient 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 capable medical billers. Doctors in the US lose approximately $125 Billion each year because of poor billing practices. Employee turnover, staffing issues, and inexperienced billers can drastically slow down claims processing and lead to poor collections and profitability.

By partnering with a medical billing company, your practice can take advantage of highly skilled, certified, and experienced medical billers at a much lower cost than hiring top talent in-house. Experienced billers can reduce processing errors, decrease the time to collect payments, and minimize the number of denied claims. They are knowledgeable in dealing with specific insurance companies and know how to get rejected claims approved. If the outsourced medical billing professionals are unavailable due to illness or vacation, the outsourcing firm can quickly provide experienced replacements. Outsourcing can also help eliminate the financial and emotional costs associated with managing internal billing staff.

5. Required Expertise

Physicians and healthcare providers excel in patient care but may not be as proficient in the business or financial aspects of the company. Many doctors prefer to spend their time with patients rather than on tedious administrative tasks. If the expertise required to perform admin tasks effectively and drive profitability can’t be found in-house, then it would be wise to outsource. An example is Medicare claims processing. This task can be difficult to build internally but is the exact skill that specialized medical billing firms excel at. In a typical medical practice, nearly half of the patients have government insurance coverage, and working with a Medicare or Medicaid billing company can increase collections significantly.

Finding the Right Outsourced Medical Billing Service Provider

Once you have decided to outsource some or all of your medical billing functions, the next step is to find the right medical billing service provider. The abundance of options available can be daunting for those who are new to outsourcing, but it is possible to find a trustworthy provider who can handle sensitive patient records and private medical information while meeting the financial needs of your business.

It’s important to establish a set of criteria to evaluate medical billing providers. If you have already done your research, these metrics can further assist you in outlining the top options. At the very least, the following metrics should guide you in the right direction: services offered, experience, quality of service, technological capabilities, pricing or delivery model, and scalability. Ultimately, your final list of potential providers should consist of companies that have the capability to minimize your time spent on administrative duties and provide you with ample time to focus on patient care.

Services Offered

Medical billing companies that provide outsourcing services can either be specialists or generalists. Some firms may only specialize in one area, such as appealing denied or rejected claims, while others may offer a wide range of medical billing and management services. The best fit for you will depend on your specific needs. However, many practices and healthcare organizations generally prefer a medical billing firm that can handle a wide range of medical billing activities, from charge entry to payment posting. If your goal is to outsource most billing tasks, look for a provider that offers the following 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 typically services that third-party providers perform better than in-house billing departments. If increasing collections is a priority for you, look for a company that has extensive experience in this area. Some larger providers also offer Business Process Outsourcing (BPO) services for revenue cycle management, which may be beneficial for organizations that wish to transfer responsibility for their entire billing process.


Industry experience refers to the overall level of knowledge and expertise that a person or organization has gained in a particular field or industry. In the context of medical billing, industry experience is not just about the number of years that a company has been in operation, but also their experience and familiarity with the different specialties within medical billing. This includes things like understanding the unique billing requirements, procedures, and regulations for different medical specialties, such as cardiology, oncology, or pediatrics.

A company that has been in business for many years but only specializes in a narrow range of medical billing services may not have the same level of industry experience as another company that has been in business for a shorter period of time but has expertise in a wider range of specialties. It’s important to consider both the number of years of operation and the breadth of experience with different medical billing specialties when evaluating the industry experience of a service provider.  

Service Quality

The quality of service provided by a medical billing company can be hard to evaluate at first glance. It’s crucial to conduct a deeper evaluation by reviewing testimonials and feedback from past clients, and reaching out to previous clients to ask about their experiences. Don’t solely depend on the case studies published on the company’s website, as these as these are often skewed to emphasize successes. To get a better understanding of the services offered, prepare a list of questions related to areas such as regulatory compliance, claim appeals process, and other relevant concerns. Be sure to discuss these issues during your consultation with the service provider.


A medical billing provider must use or be able to provide access to software that streamlines the billing process and improves staff productivity. A service provider should have a standard operating procedure in place to track results and performance based on actual data and sophisticated analytics. Additionally, it’s important to inquire about the company’s data security, HIPAA compliance, and backup and recovery protocols.

Pricing Model

Flexibility is a key factor to consider when selecting a medical billing provider. It’s important to have access to technology and expertise at all times, and the pricing or delivery model should reflect this. Different pricing models exist for medical billing services. One such model is the percentage-based model, in which the provider takes a percentage of the practice’s collections. Another option is the fee-based model, where a fixed rate is charged per claim. You can also opt for a combination of both models, where a percentage is charged for some insurance firms and a flat rate for others. Make sure you find a company that customizes its solutions based on your changing needs.

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.

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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.

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