In-House Billing vs. Outsourcing Medical Billing: Pros and Cons

To outsource or not to outsource. That is the question — and dilemma among medical practices. Solution varies from one practice to another based on many variables: business size, age and state of finances.

Apart from practicing medicine, billing and revenue cycle management are the most vital processes of your business.  While in-house billing has its pros, it also has its cons, far more than the outsourcing.   Balancing the two, what are the pros and cons of in-house billing and outsourced medical billing:

In-House Medical Billing


  1. Control. Trusted staff performing medical coding and billing tasks are reliable since then. Many doctors and administrators prefer having the supervision and control of financial operations kept in-house.
  2. Location. Close access to your medical billing is extremely beneficial, especially if any issues arises. Quick actions are taken right away since the close proximity allows providers to oversee the billing process and address any problems as they occur.
  3. ROI. When a practice has invested time and money on billing technology and training, outsourcing the process means losing countless resources spent that can never be recovered. If an effective system is in place it may be preferable to refine existing procedures to earn the most from your investment.


  1. Increasing Expenses. Maintaining the cost of billing technology, software, employee salaries and benefits are increasing overtime, thus, the expenses are far more greater than imagined. These expenses can amount to more than the price of outsourcing a practice’ billing service to a third party.
  2. Risks. Everything has its risk. In this case, security and general employee neglect can cause such risks if not overlooked. Forgotten encounter forms, discarded superbills, unappealed claim denials can cause financial operation problems if not closely monitored regularly.
  3. Staffing Issues. If your billing department consists of only two or three employees or worse yet if you have a single biller, your business – and your income – can come to a halt if a member of the staff gets sick, takes vacation time, or leaves the practice.

Outsourcing Medical Billing



  1. Cost Effective. Cost effectiveness is indeed the top reason why outsourced medical billing is advantage. The fat that you no longer carry the expenses of medical billing technology, software and such, your financial situation will surely improve.
  2. Practice Visibility. An effective medical billing company should have the ability to generate various comprehensive reports at any given time. This convenience grants providers an in-depth view into their financial situation without requiring the micromanagement of any employees.
  3. Consistent Results. When outsourcing your billing, the company you hire is obligated to perform the agreed-upon services with a certain rate of success. An added bonus is never having to hire staff as support is included in most contracts.


  1. Giving Up Control. Although outsourcing the stress and labor involved with billing to another company may feel like a relief for many, it can be difficult for some to hand over those procedures and responsibilities to someone else. But nevertheless, the positive results are all worth it.
  2. Fluctuating Prices. Most billing companies charge a percentage of the revenue they collect – the more your practice makes, the more you’ll spend. This poses difficulties when it comes to budgeting billing costs – especially with the vast differences between slow and busy months.
  3. Fine Print. When outsourcing your billing read all contracts extremely carefully. Very often there will be hidden fees for printing statements, generating reports, and other additional startup charges. Cancellation fees can also cause you to incur unnecessarily high expenses. Be certain that the money you save by hiring a medical billing company isn’t outweighed by the charges hidden amongst the fine print. Now that you weighed the pros and cons of both, it would be best to test it out first. Park Medical Billing offers FREE demo/ consultations on how we can improve your revenues.

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