Medical billing is submitting and following up on claims to insurance companies to receive payments for healthcare services provided to patients. The main goal of medical billing is to ensure that healthcare providers receive complete and accurate service payments. Efficient medical billing enhances patient satisfaction by providing accurate billing information. 

In this blog, you will understand about the two main types of medical billing. These are in-house vs outsourced medical billing. Here, you will learn the pros and cons of in-house vs outsourced billing.

In-House & Outsourced Medical Billing

As shown from the names of these two terms, in and out, the term in-house refers to managing the billing process internally, and the term outsourced refers to managing the system by an external source, like hiring an outside company to handle the billing procedure. 

1-2 wholly trained medical coders and billers are hired to set up in-house medical billing properly. This practice must confirm that the trainer covers all the basic needs of the medical billing process. The practice also runs the risk of entrusting its entire revenue cycle to these employees, so it may want to invest money into the hiring process to ensure it goes smoothly.

Moreover, medical practice can outsource medical billing to a credentialed service provider. 

This option is becoming popular day by day. The medical billing industry is advancing, with many experts and coders entering the workforce yearly. When a practice gets a partnership with a medical billing company, it can be confirmed or sure it is leaving revenue to the experts. Moreover,  they can distance themselves from costly start-up expenses, receive extremely prompt claims submissions, avoid worrying about staffing, and remove stress from management across the board.

Pros and Cons:

Depending on your medical practice, you may see the upside to in-house or outsourced medical billing. Let’s look at some of the commonly known pros and cons.

In-House Medical Billing

Pros:

• Greater insight into billing performance: In-house medical billing gives you direct control over financial processes. A physically in-house team is good for discussing medical billing topics; you can access them in real-time. Optimize your internal resources and apply any changes quickly. Monitoring your finances in person can lead to more accountability and transparency. 
• Optimize your internal resources: The initial stage of medical practice is challenging to settle because it requires an investment. You might already have the necessary tools and staff to handle billing internally, allowing you to utilize your existing resources and save money. If you have already invested time and money in medical billing software and training your staff, switching to a new system might not be worth the extra cost.
• Flexibility: In-house medical billing is more flexible than outsourced medical billing. This is because, in in-house medical billing, you work independently without hesitation or stress compared to working under any third party. If you work under any third party, you must follow their rules and regulations. 

Cons:

• Cost: The main factor in increasing costs is the size of your business. When your business size increases, your expenses automatically increase because of many factors, such as staff salaries, benefits, software for training people, etc. 

• Responsibility: In in-house medical billing, you are responsible for any mistake. These mistakes may be coding errors, claim denial, billing errors, or also responsible for the data security of patients. You are also responsible for data management because there is a lot of data, and you have to manage data in an organized way for easy access. You must ensure the overall working of your staff to see if they are working correctly or not. 
• Problems with assistance: There can be a significant problem with assistance. It means that when you hire many people for work, you have to pay a considerable salary to your employees. But when you hire 1-2 people for work, you have to pay a low amount. But this proves dangerous for you when one of your staff is on casual leave or any other serious issue, and it is difficult for one person to handle all the procedures alone. 

Outsourced Medical Billing

Pros:

• Administrative: Many doctors find it challenging to manage all the tasks of medical processes. They struggle to balance patient care with administrative tasks, as managing staff and handling paperwork takes time away from providing undivided attention to patients. 
• Accuracy & Compliance: As you know, medical billing service providers are more expert in insurance. There may be a risk of low claim success rates if you hire an in-house medical biller provider independently. This can affect your business revenue. Let the report show that medical billing claims are incorrect 10% of the time and can impact revenue by 11%. In this case, hiring someone who knows everything and can handle all the work efficiently may be beneficial. Hiring a professional proves good for you, and you will be relaxed from all the problems.
• Increase Revenue: The primary benefit of outsourced medical billing is that it can save medical practices money. It is more beneficial to save money than in-house medical billing because there are no external expenses. This way, you can quickly increase your revenue to a reasonable amount. Plus, medical billing service providers work on your behalf to increase your revenue. They go to bat with insurance companies to ensure you get the best service rate.

Cons:

• Lower accountability: When outsourcing medical billing, you may have lower accountability and less control over the billing process. This can lead to:
  • Decreased visibility into billing operations
  • Reduced ability to correct errors or address concerns
  • Increased reliance on the outsourcing company
  • Potential for miscommunication or misunderstandings
  • Less control over patient data and confidentiality

• Variable Cost: Many medical billing companies usually get paid a percentage of your total revenue, which can be 5-10%. So, it can be challenging to budget your monthly expenses. During those months when work will be slow, you will pay less to the medical biller but more in busy months.

Conclusion:

In-house vs outsourced medical billing has its pros and cons. Both are best on their behalf. You can choose outsourced medical billing if you have a low income or investment. This is because, in in-house medical billing, you have to invest in all the equipment used in the medical billing process. Data security is also essential for any organization. In in-house medical billing, your data will be more secure than outsourced medical billing. It is because no third party has access to your data or information.  

FAQ’s

Q1. What is in-house medical billing?

In the in-house medical billing process, the healthcare providers manage all the billing processes. They do not need to hire any third party to process their payment or do other work. 

Q2. What is outsourced medical billing?

In outsourced medical billing, healthcare providers hire a third party to manage their work, such as payment or data management.

Q3. Which is more secure in the case of data?

In-house medical billing is more secure in terms of data because no third party has access to your data or information.