2022 Guide to Outsourcing Medical Billing Services

June 28, 2022

Medical practices rely on a healthy revenue cycle management to remain profitable and financially viable. Without an established medical billing process in place, payments from insurance companies and patients may lag.

That reimbursement delay creates unexpected cash flow dips that negatively impact a healthcare organization’s bottom line. Medical practices unable to clear claims quickly experience financial strain, lacking resources to initially invest in or even expand value-based patient care.

Today, healthcare practices of all sizes choose to outsource their medical billing services versus employing in-house billing experts. Outsourced medical billing reduces time-consuming administrative tasks and improves the revenue cycle management process.

This guide will cover the pros and cons of outsourcing medical billing services and what you should look for when selecting the right medical billing service provider for your practice.

Healthcare professional downloading our 2022 Guide to Outsourcing Medical Billing Services

Who typically handles medical billing in a medical practice? 

Medical Coder Core Responsibilities: 

  • Chart Review: Medical coders review a provider’s patient notes and convert them into various standardized codes used to produce bills.
  • Invoicing: Once coding is complete, billing specialists create invoices and deliver claims to the payer.
  • Claims Corrections: Insurance companies may deny claims or request corrections. Medical coders must stay proactive and follow up on insurance claims to ensure claims are processed efficiently.
  • Patient Billing: In some cases, insurers will not cover an entire bill, so a medical biller must send the remaining charge directly to the patient.

Healthcare professional reading the Benchmark Systems 2022 Guide to Outsourcing Medical Billing Services

Medical coding and billing specialists need an in-depth knowledge of industry codes to ensure accuracy and expedite payments. These specialists also need to understand medical terminology, including diagnoses and procedures performed by their healthcare providers.

Small and mid-sized practices may not have a dedicated medical coding specialist on staff. The doctors, front-office admins, and office managers of smaller practices often cover billing and revenue cycle management responsibilities in addition to other duties. That creates a strain on a practice, but what options are there? Though it is a common misconception that outsourcing can be costly for smaller practices, quite the opposite is true.

What are the advantages of outsourcing medical billing? 

Contrary to popular belief, outsourcing medical billing is often less expensive than handling revenue cycle management in-house and can lead to increased revenue. Let’s compare outsourcing to keeping medical billing in-house.

The cost of in-house medical billing for medical practices

There are upfront and ongoing costs associated with in-house training and retention, especially for top-tier talent. From higher salaries for experienced, specialized workers to competitive compensation packages, a well-staffed billing department can be expensive and difficult to maintain in-house. The average medical coder makes roughly $45,000 annually and medical billing supervisors make $63,600 annually

On top of that, factor in technology costs that billing specialists need to do their job in-house:

Hardware costs
Hardware costs
Additional seats for EHR or medical practice management software
Additional seats for EHR or medical practice management software
IT maintenance and support
IT maintenance and support
Annual training for billers
Annual training for billers

Turnover in medical staffing positions causes expensive coding, billing, and reimbursement issues, hurting a practice’s cash flow. Medical practices also face challenges balancing the workload for billing staff, resulting in backlogs, billing errors, and staffing burnout.

Healthcare professional reading the Benchmark Systems 2022 Guide to Outsourcing Medical Billing Services on their laptop

The advantages of outsourcing medical billing

Outsourcing medical billing provides access to highly-skilled, dedicated, and efficient healthcare professionals trained to handle revenue cycle management. Medical practices that outsource medical billing don’t need to worry about errors, staffing issues, or overhead costs associated with an in-house billing department.

Outsourcing gives practices access to top-tier talent and may only pay for the work once reimbursement is complete. Outsourced teams also bring top software platforms, training, and billing processes to optimize efficiency. 

Healthcare professional

In addition, some medical revenue cycle management providers have a high incentive to succeed. Fees for Benchmark RCM, for example, only apply when the practice gets paid.

Related Content: Outsourced Medical Billing Costs Your Practice Less, Gets You More

What should your practice consider when shopping for medical billing services? 

While outsourcing medical billing services can drastically improve reimbursement rates and reduce overhead costs for your practice, selecting the right provider is critical. When searching for a medical billing service provider, here are some criteria to review:

  1. Fee Structure: Make sure to research which services the provider’s rates include. Many medical billing service providers charge a percentage of collected claims. Analyze the billing agreements and terms of contracts.
  2. Claim Resubmission Rate: If a claim is denied by insurance, will your provider charge you extra for resubmission? Some medical billing service providers, including Benchmark RCM, get paid based on successful transactions, which means no hidden fees associated with submissions.
  3. Provider Location: Is the provider in the United States or based offshore? While offshore medical billing service providers may charge less, they often lack a nuanced understanding of the American billing system, which varies by state. Some offshore providers do not follow regulatory oversight regarding patient privacy, making data sharing risky for medical practices based in the U.S.
  4. Performance Guarantees: Make sure your provider has a performance guarantee. It’s a red flag if a provider can’t promise that they’ll increase collections, reduce AR, or improve reimbursements. Most providers have a guaranteed percentage of first-pass claims.
  5. Experienced Professionals: Ask medical billing providers about the tenure of their staff and what certifications they have. Do they employ certified professional coders (CPCs) or offer additional security compliances?
  6. Customer Support: Will your provider be available when you need them to respond to inquiries? Are they easily accessible? Will they assign a dedicated account manager, so you have a single point of contact? These are vital considerations to weigh. In general, having a dedicated contact working on your account saves your practice time and reduces the hassle of dealing with a new person each time you call your provider.
  7. Less isn’t More: A provider that offers the lowest rate doesn’t always deliver the best-in-class service for your practice. When analyzing cost-benefit ratios, make sure to factor in what a reduced time to AR and guaranteed improvements in reimbursement would mean for your practice.

Two healthcare professionals reading the Benchmark Systems 2022 Guide to Outsourcing Medical Billing Services in their revenue cycle management office

Many physicians and practice managers agree that they must upgrade their billing, collections, and payment processing systems. Is it time to outsource your medical billing? Fill out the form below to download our checklist to see if outsourcing would benefit your practice.

Download Our Checklist to Evaluate Your Billing Processes


What are the benefits of working with the same vendor for medical billing services, practice management, and EHR software?

Some medical billing service providers also deliver practice management and electronic health record (EHR) software. Choosing a vendor that offers a holistic set of system solutions ensures that all platforms talk to each other and that data is securely shared between them. Over time, the cost savings associated with aligning practice management, EHR, and medical billing services through the same provider are enormous. 

Medical practices pay less for medical billing and revenue cycle management by reducing the data necessary for a medical billing provider to process claims effectively. Using the same software also allows medical billing providers to create customized workflows and templates to streamline data entry, making it more efficient and affordable. 

medical billing checklist icon

What are the qualities of a good medical billing service?

Medical billing services vary greatly based on the provider. Good medical billing service providers will offer reasonable fees based on successful transactions versus hourly rates. They will also have onshore customer service representatives who understand specific billing and reimbursement regulations that often vary state by state.

Providers that assign a dedicated account manager to handle your questions will help guarantee that they meet their contractual obligations. Finally, a good medical billing service provider will have a proven track record of success. They will hold themselves accountable to meet specific performance guarantees, assuring your practice that your investment in outsourcing is well worth the cost.

What makes Benchmark Systems RCM better?

Benchmark Systems RCM offers:

  • Reliable, Experienced Staff with Five-Star Rated Support
  • 98% Clean Claims Rate
  • Average AR under 30 days
  • Increased Collections by 10-30% in the First Year of Service
  • Tailor-Made Service
  • Transparency and Reporting
  • User-Friendly, Customizable Platform

One Benchmark RCM client, Springer Medical Associates, reduced their AR by 34% after the transition. “I am so grateful for Benchmark Systems and their RCM Team. If they had not taken over my billing and collections when they did, I would have had to close my practice,” said Alecia Springer of Springer Medical Associates. 

Read the Full Case Study

Are you ready to outsource your medical billing?

Take the first step by meeting with one of our medical billing and revenue cycle management experts for a no-obligation free consultation.

Schedule a 1:1 with our billing team