"Should we keep billing in-house or outsource it?" is one of the most common questions practice owners ask us. The honest answer is that it depends on your size, specialty and how well your current process is working. The only way to decide is to compare the real cost of each option, not just the obvious line items.
What in-house billing really costs
The salary of your billers is only the starting point. A full picture includes:
- Salaries and payroll taxes for billers, coders and any A/R or credentialing staff.
- Benefits, which often add a significant percentage on top of base pay.
- Software and clearinghouse fees, including practice management, claim scrubbing, eligibility and statement tools.
- Training and certification, such as AAPC credentials and annual coding updates.
- Management time spent supervising the team, reviewing reports and covering gaps.
- Turnover and absences, including recruiting, onboarding and the claims that sit untouched while a position is open or someone is on vacation.
- Office overhead such as workspace, equipment and IT support.
The hidden cost: lost revenue
The bigger number is often what you don't collect. Denials that are never reworked, claims that age past filing limits and undercoded visits are all part of the cost of billing, even though they never appear on an invoice.
How outsourcing is usually priced
Most billing companies charge a percentage of what they collect for you. That aligns their incentive with yours: they are paid when you are paid. Some services, such as credentialing or a one-time A/R cleanup, may be priced separately. Always ask exactly what is included, whether there are setup fees and how long the contract term is.
Calculate your cost per claim
The simplest way to compare is cost per claim:
- Add up your total annual in-house billing cost from the list above.
- Divide it by the number of claims you submit in a year.
- Compare the result with what an outsourced service would charge for the same volume, based on your average payment per claim.
Then look at performance, not just price. If an outside team can raise your clean claim rate, lower denials and shorten days in A/R, collections go up and the comparison shifts further.
When in-house makes sense
Keeping billing in-house can work well when you have an experienced, stable team, low turnover, strong reporting and performance that already meets benchmarks. Larger groups sometimes choose a hybrid model, keeping front-desk tasks in-house and outsourcing coding, denials or A/R follow-up.
When outsourcing makes sense
Outsourcing is often the better choice if you rely on one or two people, if denials and aged A/R are growing, if you are adding providers or locations, or if billing questions are taking up physician and manager time that should go to patients.
Make the decision with data
Before you decide, measure your current cost per claim, denial rate and days in A/R. Those three numbers will tell you more than any sales pitch. If you'd like help running the comparison, our team can review your numbers at no cost. See how our outsourced medical billing works.
