4 Reasons Independent Practices Outsource Medical Billing

by  Find-A-Code™
Jul 20th, 2022

Group medical practices have a distinct advantage when it comes to medical billing. The economics of scale make it easier for them to handle billing in-house. The same is not always true of independent practices. For the independent practice, in-house medical billing can be more trouble than it's worth. In such cases, outsourcing quickly becomes an attractive option.

Not all independent practices outsource medical billing. But enough do to support a thriving industry made up of companies that are experts in things like HIPAA compliance, ICD-10 codes, etc. Still, outsourcing costs money. So what motivates independent practices to go that route?

Here are the top four reasons independent practices outsource medical billing:

1. High In-House Costs

There are no guarantees that an independent practice will save money by outsourcing medical billing. Some do, some don't. A side-by-side comparison tells the story for any practice concerned that they are spending too much on billing. Given the tight margin independent practices operate on these days, outsourcing is a no-brainer if it saves money.

Why would in-house costs be too high? There are any number of reasons, among them being high turnover. When turnover rates are high enough to disrupt workflow, practices are forced to spend extra money to keep things going. Medical billing is complex enough that having to constantly hire and on-board new billing specialists can get quite expensive.

2. Inadequate Technology

Today's medical billing relies heavily on technology. Everything from CPT codes to billing platforms reside in the cloud. Therefore, maintaining adequate technology is a must. Some practices choose to outsource medical billing because it is either that or invest a ton of money in new technology.

Along those same lines, a smaller practice may not have enough tech-minded staff members to keep billing technology running smoothly. It might be cheaper to outsource billing than bring on IT experts or training staff.

3. Billing Inefficiencies

It is not uncommon for practices to turn medical billing over to outsourcing partners after discovering that their own billing department is inefficient. This is especially true in practices where there is overlap between billing and office administration. Staff members trying to wear multiple hats are pulled in too many directions to do everything efficiently. Offloading medical billing to an outsourcing specialist is a reasonable solution to that problem.

The thing to remember in this regard is that very few practices bill payers directly. They submit their bills to a clearing house for verification before being sent on for payment. This adds yet another layer to the system. A practice with inefficient billing systems may run into trouble with clearing houses that routinely reject claims or ask for corrections. Every time a practice resubmits a claim, a new charge is 
incurred. This can make inefficiency a costly problem.

4. Getting Rid of the Headache

Even if in-house billing is working flawlessly, independent practices may still choose to outsource billing just to get rid of the headache. Medical billing is by no means a walk in the park. For starters, medical coders have hundreds of thousands of billing codes to deal with. The entire medical billing department also has HIPAA compliance to worry about. And for practice owners, it is just another department requiring supervision.

Outsourcing medical billing wasn't much of a thing 50 years ago. A lot has changed since then. Today, medical billing is complicated enough that many independent practices have decided it is better to outsource billing tasks. If you operate an independent practice, maybe outsourcing is for you. At least look into the possibility of letting someone else deal with it.