Outsource Medical Billing services- Should a Physician Outsource Medical Billing Services

Should a physician outsource medical billing services?


This is a very difficult decision for any physician and partially boils down to this or her own personal ideology and comfort level.  Hospital-based physicians will almost always be better off outsourcing because of the office related expenses that they would not otherwise incur.  As the owner of medical billing service you may think I’m naturally biased towards outsourcing. I can assure you that this is not the case. Physicians who are overly controlling, uncomfortable or mis-trusting toward billing services are nearly impossible to administer. I don’t want anything to do with those types of physicians but I completely respect and understand their point of view.  Setting all ideology aside I would like to delve into the pros and cons of this difficult and complicated decision.


  1. I am a physician who is very interested in the business aspect of medicine and I do not mind spending my valuable time managing the medical billing aspect of my practice.


Clearly, the best way to do your billing is to do it personally.  Obviously, doing it yourself is probably not an option but if you’re willing to spend the time and have the interest I would recommend that you do your own billing.  Keep in mind that most billing service owners and certainly our employees have limited medical backgrounds. Physicians who study CPT, regularly attend billing seminars and keep up to date on industry changes are the ultimate medical billing gurus in my view.


  1.  I am a physician who has absolutely no time or interest in the medical billing aspect of my practice.  I am completely reliant upon my office manager and billing staff.


Unfortunately, most physicians are in this position.  Even if they were interested in keeping up with all the changes and elements of medical billing the practical reality is that there is absolutely no time.  Let’s face it; time is your most valuable asset. It’s sort of like mowing your own lawn. You’d be way better off financially seeing patients for three hours on Saturday morning.  I believe the following information will dramatically help with your decision to outsource your billing or continue to do it yourself and with future decisions in the ever-changing business aspect of medicine.


The pros and cons of outsourcing your medical billing services.


I would like to preface this article with a couple of obvious but important points. If you have a system of controls, keep an open mind about the competence of your office manager, you’ve got an excellent computer system, proper information systems and your office is doing a superb job at collecting your money, then by all means do not make any changes.  Conversely if you’re planning to outsource your billing make sure you hire quality firm. I’ll spend some time at the end of this article discussing this further.


Most leading experts agree that it costs about 4.5% of net collections to perform the billing function within a physician’s office.  Incidentally, this is close to my actual cost as well.


Theoretically, a billing service should be able collect more money than a physician’s office because it is our core competency.  The question is how much more? This is why I focus on how to choose a billing service at the end of this article.


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