A Detailed Guide on Medical Billing Outsourcing

Gone are the days when the organizations used to rely on their in-house employees as the people driving the business’s success, and the same is the story for medical practices. Despite their talent, capability, and skills, they often fall short in managing the time and keeping up-to-date with the frequent changes in the healthcare industry, mainly the medical billing and coding system. Hence, a comprehensive plan for the practice must be put in place to warrant the successful financial growth of the organization. One of the best ways to ensure that efficient and effective medical billing processing is done with the assurance of 100% reimbursement is by outsourcing medical billing and coding. 

However, the idea of giving the responsibility by the practices of such an integral part of the healthcare system to an off-shore medical billing and coding company can be pretty daunting. But if you follow this detailed guide on why and how to outsource medical billing properly to a third party, you can definitely ensure the financial health of your practice with other benefits. 

Medical Billing Outsourcing – A Percentage Pricing Model 

When a medical practice considers outsource medical billing and collection, the percentage pricing model becomes an area of concern. 

The core reason behind such concern is that the practice is already dependent on their in-house staff for all the medical billing and collection activities; they often fail to understand the model of ‘success fee’ and its benefits. The other concern that plagues the practice when considering the percentage pricing model is the knowledge of the covered services for medical billing and coding. 

Here is a comprehensive guide on the percentage pricing model and services covered. 

What Is the Percentage Pricing Model?

The model is also referred as the ‘success fee’ model because the outsourced company gets a percentage from the successful collection they have made. The collection generally includes a portion from the gross collection of payments received from payers, patients, and self-pay categories. 

This model is one of the best in the healthcare industry since the outsourced medical billing company gets paid only for successful collection. Hence the onus is on the outsourced billing and coding company to increase their collection rate for the practice to enjoy better revenue for their business. 

Services Covered

Typically the changes between different outsourcing medical billing and coding companies occur from the point of view of the services covered. In most cases, the services that are covered include:

• Revenue cycle management, under which the following services will be processed

  • Demographic entry 
  • Coding
  • Charge entry 
  • Claims transmission
  • Taking care of transmission rejection 
  • Payment posting 
  • Denials management 
  • AR follow-up 
  • Credentialing 
  • Insurance benefit verification 
  • Patient calling

However, the services can also include an extra fee or within the scope of service:

  • Patient statement charges 
  • Software purchase
  • Software set-up 
  • Document management 
  • Contact negotiation with payers

The percentage fee can change since none of these services are set in stone and can be customized as per the practice and the outsourced billing company. As a result, there are no standard rate cards since the pricing percentage also changes based on specialties, software provided, and collection. 

Difference between In-House And Outsourced Medical Billing 

There are quite a few differences between in-house and outsourced medical billing. The significant difference is the location of the billing. An in-house billing team is part of the medical practice and is a station within the premise. In the case of outsourced medical, the team is located off-shore since most of the work is done electronically and is cloud-based. 

Apart from these, there are three other significant differences. 

Changing of Focus

In an in-house medical billing, the practice has the ownership and must be responsible for the procedures and the billing process, thus maintaining a focus on the team. On the other hand, outsourced medical billing takes responsibility for the billing and coding process, including the revenue collection. It hence allows the practice’s entire focus on delivering better care to the patients. 

Medical Billing Errors 

With constant changes in medical billing and coding with the in-house team being overworked, the risk of coding and billing errors is relatively high. It will eventually affect the reimbursement and the revenue cycle. A medical billing facility that has been outsourced has a team of experts who are up-to-date with the changes and can process the billing and coding correctly, thus reducing medical billing errors. 


When a medical practice hires an admin staff for the in-house billing, they often have qualifications and experience. However, the ever-changing regulations in the coding and billing and the failure to offer regular staff training can lead to compliance failure. Outsourced companies have a dedicated billing section, which provides regular training on the regulatory changes and ensures compliance is maintained. 

Why Outsource The Medical Billing? 

A successful medical practice can only happen when you offer the best patient care. In addition, it is possible when you have a healthy cash flow. Unfortunately, many medical practices fail to provide the best patient satisfaction because of the failure to have a comprehensive revenue management system. Also, the other factor that impedes success is changes like ICD-10 implementation, the need to upgrade the software and technology, and regular staff training. All of these eventually eat into the revenue of the practice. 

When you are struggling with your revenue on anyone or on multiple fronts, it is time to consider outsourcing medical billing. 

Let’s discuss why it is the best solution for the healthcare providers:

Latest Technology & Software

Most outsourced medical billing makes their name in the market by offering the latest state-of-the-art software and technology. Since most of these constantly get upgrades to suit the changing environment of the healthcare system, the cost involved in buying and upgrading it can be quite a lot. On the other hand, when you outsource the billing system, you can enjoy all these latest technologies much more cost-effectively. This is because most third-party companies charge for the software and the technology for once and then offer their service and up-gradation for a minimal cost, which is way less than installing your software. 

Claim Denial Reduction

Often the in-house staff members fail to get regular and adequate training regarding the continuous healthcare billing and compliance updates. However, when you partner with a reputed billing and collection organization, you do not have to worry about training your staff to follow the current standards. Instead, the outsourced organization brings in its pool of well-trained staff, which are up-to-date with the latest technology, software, and billing procedures to ensure no claim denials. 

Better Productivity & Profitability 

With outsourced partners, medical practices can improve their overall productivity and profitability by ensuring fewer claim denials, proper follow-up on the claims denied and finding the reason for the claim rejection. Well-trained medical billing and collection team in place will warrant that mistakes in claim denials and billing are reduced, thus helping you to get uninterrupted cash flow. It will thereby increase the productivity and the revenue of the healthcare facility. 

Continuity of Business

When you have an in-house management team for billing, the chances are there will be one expert in certain areas. In the case of the absence of that employee, the billing is likely to get affected. With a medical billing partner, you have more than one expert in the team to handle a situation, thus ensuring your facility runs all the time appropriately without any interruption. 

Integrating with EHR

Any in-house medical billing team will tell that electronic health records (EHR) are frustrating and nightmarish and a time-consuming process. However, when you outsource the service to a reputed partner, they have experience working with major EHR systems and can integrate easily. You no longer have to worry about the technical issues that often arise on the HER system’s billing side. 

Reach the Full Potential 

When your medical practice is not getting bogged down with the billing, revenue cycle management, software, and technology complications, you can focus on your patients and other aspects that will help you grow. Moreover, you can quickly eliminate the difficulties, distractions, and interruptions often caused due to the billing and coding system with outsourced partners. 


There is the misnomer that by outsourcing the medical billing, the healthcare facility, mainly the physicians, is handing over the control of the RCM process to strangers. But when you start working with the partner, you will soon realize the system is structured to give you positive marks on a set of metrics like reducing denial rates, increasing collection rates, and first-pass payments, to name a few. 

The process ensures unprecedented transparency in the revenue cycle by providing you with comprehensive reports on the performance. You will also get regular reports on any payment issues or delays, thus allowing you to have a full view of the RCM without micromanaging it. 

Satisfied Patients 

For any successful medical practice, it is vital to meet the expectation of the patients. However, the focus is bound to shift when your team is multi-tasking and overworked with keeping up everything up-to-date. So, while your staffs manages the scheduling of the patient’s check-in and check-out, handling the clinical records and bookkeeping, by outsourcing, you can help your staff ensure better care for the patients. 

At the same time, the outsourced team manages the billing and the coding procedure without any hindrance. You and your staff then are free to cater to patients’ needs, thus increasing their satisfaction and improving patient retention.  

How to Select Your Outsourced Medical Billing Partner? 

As mentioned above, there are quite a few reasons you should consider outsourcing the medical billing system. But you can only reap the benefits when the provider is equipped enough to warrant your need, irrespective of the size of the practice. 

Here are some pointers on how to select the outsourced partner. 

How fast will they process the insurance claims once they partner with you?

Generally, a company should be able to begin the service within a couple of months. However, it is not a hard and fast rule since the timeline can change depending on your requirement. For example, if there is a need to overhaul the practice management software and the partner is well-versed with it, the transition should be quick. 

But if the practice management is not the same and the data needs to be exported, manually entered, or imported, then the turnaround time can change. Also, a partner will need time to set up the required electronic connection, leading to a longer implementation time. 

The best way to ensure you are getting a good deal is by asking for references and the reviews the customers offer. 

What services will they provide in medical billing?

The entire revenue cycle management system is a complex process that requires the team to perform a range of essential tasks. Therefore, it is necessary that each task is identified and a clear assignment of the process is done to ensure whether your practice or the parent will be conducting it. 

What training does the outsourced staff receive?

There is no point in hiring an outsourced partner who doesn’t provide trained staff. You must confirm that the team looking after your billing is certified and undergo regular training to maintain the certifications. 

Now that you know the main three criteria for selecting an outsourcing partner for medical billing, let’s look into why 24/7 Medical Billing Services is the best choice. 

24/7 Medical Billing Services- The Expert in Medical Billing!

24/7 Medical Billing Services has to spend 14+ years tailoring the medical billing and coding services with a pool of talented and experienced teams. We ensure that our experts can assist in outsourcing medical billing and maximize the potential of the management while retaining more revenue. 

As a medical billing outsourced company with work with most EHR and provide a holistic billing service. Moreover, depending on the practice and the requirement, we offer our services, ranging from complete revenue cycle management to putting the practice on track or helping them with contract management and credentialing. 

24/7 Medical Billing Services is dedicated to empowering your medical practice no matter what the service is, so why not benefit from our knowledge and scale your business and make it future-ready. To know more, contact us today. 

Read more: Medical Billing Outsourcing – Common Myths Busted

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