Pros and Cons of Medical Billing Solutions

Outsourcing your medical billing is a smart move for many medical practices. Explore the thoughts of industry experts comparing in-house coding and billing to hiring a medical billing company.

Outsourcing medical billing can make some people nervous yet it is a common topic among small medical practices. This conversation generally weighs the pros and cons of utilizing EHR billing software or third-party medical billing services. The situation that drives this discussion is a need to find a cost-effective solution for better revenue cycle management. Specifically, this comes down to the key goals are timely and accurate billing, collecting money faster and improving your bottom line.

An Introductory Comparison

In-house medical billing requires employees to use medical coding and billing software to complete tasks for revenue cycle management.

Outsource medical billing means the doctor or practice business manager hires a third-party medical billing company for revenue cycle management.

EHR Billing Software vs. Outsourced Medical Billing

Starting Your Comparison Process

Where do you start in doing the analysis and comparisons? Finding the best medical billing solution for your practice begins with doing an honest assessment of your existing in-house structure, strengths and weaknesses. Think about what you have tried that has worked, and what has not worked. Determine which challenges are manageable and which are out of your control. Knowing what you have now in terms of staff, skills, space, time, and capital can make the evaluation process a bit easier. 1

4 Pros of Outsourcing Medical Billing

Cost Control: When you outsource coding and billing you know what the costs will be to get the work done. With in-house staff, you never really know what the true cost is because you don’t know how much time they are spending on this work. Outsourcing makes it easier to control your operating budget.

Error Reduction: Let’s face it, medical coding and insurance billing requirements change often.2 Errors in coding and billing practices result in denied claims and delayed payments. The only way to mitigate these issues is for your in-house staff remain current on these changes. How will you or your staff stay abreast of changes and train the people doing the work? A professional coding and billing company are experts at remaining at the top of their game.

Timeliness: A physician or office manager eliminates the need to micro-manage a billing staff. A third-party billing company is committed to only doing your billing right away. Your in-house billing staff can get behind on coding when they miss work or are pulled into other tasks in the practice. Having dedicated medical coders and billing specialists means you have a team that makes collecting money their top and only goal.

Responsiveness: A medical billing service has dedicated points of contact that can provide a variety of reports on-demand. Unlike waiting for an employee to “get to it when they can”, a billing service can respond promptly with the information you need. Again, you get people dedicated to supporting you with a full-time eye on your revenue.

4 Cons of Outsourcing Billing

Unexpected Fees: The potential for add-on monthly fees. This should not be a huge concern because you’re simply paying for the time required. If you required an in-house staff to do it you’re still paying them for their time to do the work. The best thing to do, before hiring a third-party vendor, is to learn all of the standard and potential costs. Consider how these costs apply to what your practice needs. Decide for yourself if the numbers work for you. Cost analysis yield varying results.3

Conflicting Styles: When you have in-house coders and billers they know exactly what you want, how you want it and when to do it. When you hire a medical billing service you need to be a bit flexible to fit into their system and processes. Generally, your outsource partner will go through the revenue cycle management steps nearly the same as your in-house team. In any situation, there will be some operational or procedural differences. Moving that aside, let’s look at what you can expect your vendor to do for you:

Privacy Concerns: Bringing in a billing service requires a lot of sensitive disclosure. Things like (even discretely) sharing your financial situation can be uncomfortable. With computer server hacking being relatively common, there is a possibility a large billing company would be the target of a hacker. Having any or all of this information compromised could bring about very bad consequences.

Exit Strategy: What happens if you stop outsourcing, and decide to bring your billing back in-house or hire another service? It may not be particularly easy to get your information in a format that makes it easy to put into a new system. Some providers make it very difficult to extricate your practice from their system.

Should You Hire a Medical Billing Company?

It’s a matter of personal preference as to whether or not to go with outsourcing medical billing and coding. From a top-level view, here are a few things to think about;

You will need to relinquish some control of your billing. When you hire a coding and billing company you will need to adapt to their processes and style. The initial experience of things not being done the same way may be uncomfortable. Ultimately, you have to not focus on the methods, and instead focus on the output.

Outsourcing will return to you all of the time your staff now spends on billing. You may even find that it saves you money. Think about all of the time your practice spends on coding and billing. Now think about how much time you will suddenly have available when 90% of the work is done by a third-party service.

The bottom line is the bottom line. A billing specialist will get the billing out in a timely manner, virtually eliminate billing errors, and bring in revenue at an optimal pace. That’s what matters, right?

Want to learn more? Call a medical billing specialist to discuss your situation. Get a non-biased recommendation on which option is best for your practice.


  • 1 Unknown, “Cost comparison In-house Medical Billing VS Outsourced Medical Billing “, November 15, 2016, Available from ISSUU
  • 2 Megan Knowles, “WHO releases ICD-11: 5 things to know”, June 18, 2018, Available from Beckers Hospital Review
  • 3 Gaby Loria, “Should You Outsource Your Medical Billing?”, January 1, 2019, Available from Software Advice