Medical Billing Outsourcing vs In-house Billing

There has always been a discussion or debate on whether medical billing needs to be outsourced or have to be maintained in house. To be honest, there is no hard and fast rules in it. Each organization’s business dynamics and vision is different. So there cannot be one rule fits all. However, if you are a medical professional or a medical billing company in a dilemma then this article will help you to understand how both in house and outsourced system works.

Medical Billing Outsourcing pros

The first and foremost reason for medical billing companies to outsource is to benefit from it. Now let us see how outsourcing benefits the medical company.

Cost effective

This is one of the major benefits of outsourcing. When the operational and customer support work of a medical billing company is outsourced to a country like India, the cost will automatically come down. Due to the currency conversion making it viable for businesses. Not just that, the knowledge, infra structure, expertise, procedures, process everything comes at lesser cost. So that makes medical billing outsourcing a profitable venture.


Through outsourcing, a given set of standard process, system and procedures can be created. As a result, the medical company is aware of every little detail that is happening through outsourcing. They also use software tools to monitor and manage the business on a daily basis. Since the system is set, the outsourced company also works according to the standards set.


Consistency is the key for any business. By choosing the right kind of outsource company, the medical companies can see consistent growth in their business. The outsourced company will also put in their best efforts to deliver consistent results, in order continue their contract with the medical company.

When the outsourced company can produce the desired results, the medical billing company can grow steadily without much problems.

Easy to expand

When you outsource your medical billing work, you get the advantage of expanding faster. Since the work is outsourced, the head ache of infrastructure, recruitment, training etc falls on the outsourced company. Since the cost involved will be almost half the cost, medical billing companies can easily look at expansion faster in an outsourced country.

More focus on patient care

Medical practitioners can spend more time with their patients and provide better service. This is possible only if the doctors relieve themselves from the medical billing work. If it done internally, then the doctors will have to get involved in most of the transactions. This may result in less focus on patients.


As most of the outsourced medical billing companies have vast experience and experts, they are so much used to the process of getting the payments seamlessly .On the other hand, if we go for in house team to work on the billing, the first challenge will be in getting the right talent.

The next would be the infra structure cost. Another aspect about in house billing team is the size of the team. The size of the team cannot be bigger. So the chances of errors will be high. But the outsourced company can afford to handle all varieties of medical claims and they have a bigger team to solve on a case to case basis. This makes the accuracy level high.

Compliance with the standard medical practices

Majority of the medical billing outsourcing companies will be keen in getting compliance with the standard medical practice. *HIPAA (Health Insurance Portability and Accountability Act of 1996) is United States legislation that provides data privacy and security provisions for safeguarding medical information *Source.

The reason being lot of competition among outsource companies to get contracts from US based medical billing companies. They use compliance to medical practice as a selling point.

Faster claims

As mentioned earlier most of the leading medical billing outsourcing companies have vast experience in the field. This makes it easier and faster to get claims. The outsourced companies does the follow up and payment collection. So no headaches for the US company in getting the claims paid. Since the claims are received on a regular basis, it helps the company to have a steady cash flow.

Related: Impact of Choosing the Wrong Medical Billing Partner

Outsourced cons

Outsourcing your medical billing is not without cons. Let us now go through the various issues faced by outsourcing company.

Less control

Since majority of the operations and support is outsourced, it gives less of control over the business.

Even though, the outsourced companies provide reports, it cannot be equal to really managing it in house. If there is a down time in the outsourced company, it affects the US medical billing company in terms of claim collection and customer support. This will have a serious impact on the reputation of the company.

Variable cost

Another major issue with outsourcing the billing process is the variable cost. As the company grows, the variable cost will increase. There are also the possibilities of outsourcing company shut downs. When these companies shut down due to less number of projects, it eventually increases the cost to the company.

Hidden fee

It is a known fact that the company where you outsource will look at avenues to make money. So they will try to increase their revenue by adding some kind of an hidden fee. So the medical billing company have to be careful before passing any bill.

However, if you choose the right kind of outsource medical billing company, these challenges can be faced without difficulty ensuring more profits.

In-house pros

Having an In-house team for medical billing is the ideal situation any billing company will look for. But unfortunately, in reality this is not the case. In-house billing team will suit for either large companies(because they can afford to) or smaller set ups(because they cannot afford to). In-house has its own set of pros and cons. Let us now go through one by one.

Complete control

The first and the most important factor to go for an in-house billing team is to have complete control of everything. Since all the people involved in this activity are your employees, it easier to pass on instructions and execute standard procedures without much difficulty.

Return on Investment

When your medical billing is managed in-house the cost will be under control. Since every little process come under your purview you can keep the cost under check. As a result, revenues can be increased. So the return on investment can be bigger and faster.

In-house cons

Higher costs

In-house medical billing practice involves lot of capital investment in infra structure, recruitment, and so on. Since there is a huge gap between the prevailing costs in the US and the outsourced country like India, it will not be easy to match the costs. So definitely the costs will be higher for in-house medical billing companies


Liabilities tend to go up when you have your own in-house team.When you are using your own team all expenses have to be paid upfront and lot of cash flow needs to take place to run the company without liabilities. When it is outsourced, you will get enough credit period and the liabilities will also be lesser

Support issues

Another major issue with in-house team is the support system. As the company grows, it will be difficult task to have the optimum resources to serve the clients. Sometimes we tend to have a smaller team for a bigger client base or have a larger team for a smaller client base.

In the first scenario, customer will be affected. In the second, company will have the effect. One more issue is employees leaving the company. It is very difficult to have an additional bench strength to fill this gaps. So it is really a challenging task to have your in-house billing team.

Hope most of the major points are covered above. If any of the critical points found missing, do share it in the comments, we will be happy to include it, if it meets our standard blog guidelines.

You can also do a favour by sharing this article to doctors/medical billing companies/EHR companies in the US. It will just take a few seconds to share, but it will be really helpful for the people searching for information on outsourced medical billing and in-house medical billing.

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