Medical Billing in Healthcare: Understanding In-House vs Outsourced

Understanding Medical Billing in Healthcare Practices

One of the more complex components of running a medical practice is managing your organization’s medical billing process. With thousands of potential medical codes for different diagnoses and procedures, on top of the numerous payers in the market, having the ability to effectively manage billing is a key driver of success in today’s healthcare industry.

In-House vs Outsourced Billing: No One-Size-Fits-All Solution

There is no “one-size-fits-all” as it relates to medical billing solutions; however, the two primary options for a healthcare organization are in-house medical billing and outsourced billing. There are three overarching considerations when evaluating whether to implement in-house or outsourced billing:

  • The cost
  • An organization’s capacity to execute billing
  • Maintaining confidential health services while billing
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Evaluating the Cost of Medical Billing

Evaluating the cost implications of your selected billing option is critical for revenue management. For small clinics, there may not be enough revenue generated to cover the fixed costs of billing and turn a return on investment (ROI). It is important to do a cost-benefit analysis to ensure that the clinic can expect a net income.

Medical Billing in Healthcare: Understanding In-House vs Outsourced

Essential Internal Billing Activities

Whether or not your organization elects to keep billing in-house or outsource billing, a handful of important billing activities must be maintained internally. As an organization, you are held accountable for submitting accurate and timely billing information to the outsourced billing agency or to individual third-party payers. The organization is also responsible for:

  • Insurance verification
  • Medical patient registration
  • Coding

Maintaining Confidentiality: Written Billing Policies

Finally, it is of utmost importance to have clear written healthcare billing policies on how to manage bills and balances to ensure private patient information is managed appropriately.

Exploring In-House Billing

In-house billing includes the staff of a clinic or healthcare organization being responsible for all aspects of revenue cycle management. They submit claims to a clearinghouse, directly to Medicaid, or to the insurance company for reimbursement. They also set charges, collect patient fees (copays and deductibles), and manage the accounts receivable.

In-housing billing comes with several advantages all of which include:

  • More visibility over the billing process
  • High flexibility
  • Increased control over patient accounts

Nevertheless, it’s essential to be mindful of the potential difficulties linked with in-house billing, which encompass:

Outsourcing: A Common Solution to Medical Billing

Many healthcare organizations opt to outsource their medical billing to a third party. These third-party companies typically take a percentage of a healthcare organization’s collections as payment for managing many aspects of a revenue cycle, on top of recurring monthly fees.

Outsourced billing has countless benefits which may include:

However, outsourced billing requires your organization to:

  • Maintain and oversee contractual obligations to the selected third party
  • Outsourcing gives your organization less control over patient accounts 
Medical Billing in Healthcare: Understanding In-House vs Outsourced

Weighing the Choices: Outsourced vs In-House Medical Billing

The decision in outsource medical billing versus billing in-house is very dependent on your organization’s needs and resources, and each option has its own benefits and disadvantages. 

To learn how Pathstone Partners can help your organization with medical billing, contact our team of  healthcare experts.

 

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Medical Billing in Healthcare: Understanding In-House vs Outsourced

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How to Stop Revenue Leakage in Healthcare

One of the more complex components of running a medical practice is managing your organization’s medical billing process. With thousands of potential codes for different diagnoses and procedures, on top of the numerous payers in the market, having the ability to effectively manage billing is a key driver of success in today’s healthcare industry.  

 

There is no “one-size-fits-all” solution as it relates to medical billing; however, the two primary options for a healthcare organization are in-house billing and outsourced billing. There are three overarching considerations when evaluating whether to implement in-house or outsourced billing: 1) the cost, 2) an organization’s capacity to execute billing, and 3) maintaining confidential health services while billing [1]. Evaluating the cost implications of your selected billing option is critical. For small clinics, there may not be enough revenue generated to cover the fixed costs of billing. It is important to do a cost-benefit analysis to ensure that the clinic can expect a net income [1].  

 

Whether or not your organization elects to keep billing in-house or outsource billing, a handful of important billing activities must be maintained internally. As an organization, you are held accountable for submitting accurate and timely billing information to the outsourced billing agency or to individual third-party payers. The organization is also responsible for insurance verification, patient registration, and coding [1].  

 

Finally, it is of utmost importance to have clear written billing policies on how to manage bills and balances to ensure private patient information is managed appropriately.  

In-house billing includes the staff of a clinic or healthcare organization being responsible for all aspects of revenue cycle management. They submit claims to a clearinghouse, directly to Medicaid, or to the insurance company for reimbursement. They also set charges, collect patient fees (copays and deductibles), and manage the accounts receivable [2]. In-house billing allows for more visibility over the billing process, high flexibility, and increased control over patient accounts [2]. However, in-house billing includes high upfront expenses for labor and technology, ongoing training needs, and high dependency on your staff members [2]. 

Many healthcare organizations opt to outsource their medical billing to a third party. These third-party companies typically take a percentage of a healthcare organization’s collections as payment for managing many aspects of a revenue cycle, on top of recurring monthly fees [3]. Outsourced billing has countless benefits which may include having more experienced parties managing your billing, advanced software options, and saving on internal time and resources [2]. However, outsourced billing requires your organization to maintain and oversee contractual obligations to the selected third party and outsourcing gives your organization less control over patient accounts [3].  

The decision in outsource medical billing versus billing in-house is very dependent on your organization’s needs and resources, and each option has its own benefits and disadvantages. 

Works Cited 

 

[1] Software Advice. “In-House or Outsourced Billing – NCSD.” In-House or Outsourced Billing, 2015, https://www.ncsddc.org/wp-content/uploads/2020/01/In-House-or-Outsourced-Billing_STDTAC1.pdf.  

[2] Casarez, Carlos. “In-House vs. Outsourced Medical Billing: Pros and Cons.” Continuum, 17 Aug. 2021, https://www.carecloud.com/continuum/in-house-vs-outsourced-medical-billing-pros-and-cons/.  

[3] Software Advice. “In-House or Outsourced Billing – NCSD.” In-House or Outsourced Billing, 2015, https://www.ncsddc.org/wp-content/uploads/2020/01/In-House-or-Outsourced-Billing_STDTAC1.pdf.  

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