A Comprehensive Guide to Outsourcing Medical Billing in 2024

March 7, 2024

Technological advancement in the field of healthcare has given rise to numerous opportunities to streamline clinical and financial workflows that can help improve health outcomes. Through the introduction of technology in healthcare, medical professionals can ensure practice protocols are set in place to benefit both patients and the practice.

One such technological innovation that has framed the metamorphosis of financial operations in healthcare is medical billing. This software has allowed an efficient and streamlined workflow for billing and payment practices that can guarantee hassle-free transactions for healthcare facilities and practices.

Today, medical billing solutions are part and parcel of healthcare practices. Providers depend on these reliable technologies to perform the stringent tasks that are part of healthcare finances.

However, in order to ensure seamless revenue generation and efficient financial functionality, practices have begun to outsource these services.

Outsourcing medical billing is an easier alternative to in-house medical billing that can ensure finances are looked over more intricately for better outcomes. In order to understand the difference between the two, let us first explore the definition of medical billing.

What is Medical Billing?

Medical billing software is a technology that is solely dedicated to perfecting healthcare finances. The technology is structured in such a way that it provides the management of financial tasks in an orderly fashion, such that all tasks are organized to result in quicker and fuller reimbursements.

Essentially, medical billing solutions function by helping healthcare providers file accurate and successful medical claims. Furthermore, by reducing errors in claim management, medical billing helps successfully submit these claims to insurance companies for the purpose of payment collection.

Medical claims contain accurate and detailed information regarding the patient, their demographics, history, diagnosis, treatments performed, and drugs administered, as well as their insurance information.

Insurance companies then make a decision regarding whether to fully or partially reimburse the practice for treatments rendered after using and verifying this information. However, if not filed in an accurate manner, these claims can also be denied, resulting in a significant loss to the healthcare practice.

Therefore, medical billing solutions act as efficient mediators between the healthcare practice and the insurance company.

Difference Between In-House and Outsourced Medical Billing

One major difference between in-house and outsourced medical billing can be highlighted in the terms themselves. While in-house medical billing is performed primarily within the practice, outsourced medical billing is a service provided by a third-party organization.

Additionally, there are other major differences between the two, including:


In-house medical billing allows practices to be autonomous healthcare institutions that are in complete control of their medical billing processes and the outcomes therewith. However, with outsourced medical billing, the control belongs to a third-party organization that is in charge of providing a foolproof medical billing service.

Therefore, when choosing a company to outsource medical billing, practices must conduct thorough research.

Supremely Qualified Staff

Outsourced medical billing allows practitioners to utilize the benefits of a diverse and qualified team of professionals by leveraging medical billing services from companies that are specialized in providing seamless and profitable outcomes in healthcare finance.

Although in-house medical billing staff may also be skilled and adequately qualified, they may not be trained enough to handle complex billing cases, which specialty institutions are trained to tackle.

Compliance Issues

Medical billing is a tricky financial process. Therefore, ensuring seamless operations can often be a tedious process. While in-house staff can be skilled enough to tackle claim management and denial issues, remaining up to date with the regular changes in billing and coding regulations can often create compliance issues amongst practice staff.

Outsourcing medical billing means these issues shall be taken up by trained personnel that are specialized in remaining up to date with these regulations.

Benefits of Outsourcing Medical Billing

As previously discussed, outsourcing medical billing can prove to be highly beneficial for medical practices in that it allows physicians to remain stress-free while ensuring their billing matters are in the hands of experts. Physicians can therefore focus on providing adequate healthcare for patients while medical billing experts ensure profitability.

Here are a few reasons why outsourcing medical billing may be the best decision for your practice:

Cutting-Edge Technology

Companies that offer medical billing services ensure they possess the latest technology and software that efficiently performs the comprehensive medical billing tasks accurately, paying meticulous attention to detail.

This helps practices remain at ease since third-party organizations will be adequately equipped with technological resources, which would have otherwise been costly to integrate in-house, to perform medical billing tasks.

Claim Management

Medical billing service providers ensure claims are filled, filed, and submitted timely and accurately. These companies employ a robust workforce of skilled professionals who are trained to check in with insurance companies regularly in order to check claim status and manage denials, if any.

For this purpose, outsourcing medical billing can prove beneficial for practices since third-party service providers can ensure practice profitability through comprehensive screening and meticulous attention to detail.

Enhanced Productivity

Since in-house medical billing may require subsequent micromanagement by the practice owners and physicians, outsourcing can be a convenient solution to this issue. Additionally, in-house medical billing, as mentioned earlier, may exhibit issues of compliance or employee engagement as staff members may feel demotivated when performing repetitive and tedious medical billing tasks.

Outsourcing medical billing allows physicians to ensure productivity and profitability as a result of a robust team of professionals that are equipped with the knowledge and training to perform medical billing tasks efficiently.


According to popular belief, outsourcing medical billing services means losing complete control of the practice’s medical billing. Although, in theory, this may sound true, reality is far from it.

Outsourcing allows physicians to leverage expert opinion and skill to financially optimize their healthcare practice. This in no way means that the practice owners lose control of the practice's finances.

Companies work by keeping providers in the loop regarding updates and asking for approval before making decisions in complex situations. Therefore, outsourcing medical billing ensures transparency remains unaltered in financial optimization.

EHR Integration

In-house medical billing teams are often hesitant to integrate EHR systems to improve the structural capability of practice operations. This is because most medical billing experts are unequipped to operate most medical billing and EHR systems simultaneously.

However, when practice owners outsource their medical billing, they also have the option to leverage electronic health records solutions, allowing talented and skilled personnel to integrate EHR systems simultaneously with existing medical billing software.

This provides opportunities to streamline practice documentation procedures and further improve billing processes, creating uniform technological modernity in practice protocols.

How to Choose the Right Company for Outsourced Medical Billing

In order to pick the right company for efficient medical billing services, physicians must remain aware of the requirements that are necessary for a good service provider.

Fast Paced Claim Processing

Typically, most companies begin medical claim processing operations 30 to 60 days after partnering with a medical billing company. However, this may not hold true for all companies. There is no theory to prove this time frame, and several factors may affect the exact number of days it may take for a company to begin claim processing for a practice.

Primarily, this depends on whether a practice’s practice management (PM) software needs to be changed. If the practice management (PM) system is well integrated into the practice system, then transitioning just requires adding user credentials and providing the medical billing company with access to the software. As a result of this, medical billing processes can begin a lot sooner than the previously mentioned time frame.

Alternatively, if a practice management (PM) system needs changing, then setting up the system as well as integrating the electronic connection to different insurance companies can take time, thereby elongating the claim processing operations by billing partners.

It is imperative, however, that medical billing companies offer an implementation plan previously performed for practices similar in scale to yours. This can allow physicians to comprehend the framework of implementation procedures and the timeframe required to complete the set-up process for financial processes to begin.

Medical Billing Service Provision

Every medical billing service provider offers a different set of services to manage healthcare finances. While each practice opts for a different medical billing plan, it is essential to choose a company whose services align with your practice's requirements.

Additionally, it is important to note that each practice may align and distribute tasks differently. Therefore, it is essential to outline tasks coherently between both the practice and the medical billing partner. This includes transparency, while also allowing the practice the option to maintain certain control over their practice finances.

Regular Performance Insights

For a more streamlined and productive medical billing process, it is imperative to opt for a service provider that offers monthly performance reports. These are regular insights based on information gathered over a given time period to depict the highs and lows of practice finances each month.

Professional companies that outsource medical billing not only display this data in an organizational format, but also interpret it to analyze the possible reasons for inefficiency in financial outcomes.

Additionally, these services will also include a series of advice pieces that can help regulate revenue throughout the practice for seamless profitability.

Training of Staff

When opting for a decent medical billing company, it is essential to take note of the qualifications of their medical billing team. A qualified and skilled team ensures reliability and will allow physicians to leverage their skills and knowledge to handle complex billing matters.

Therefore, in order to assess the viability of a medical billing company, identify the training offered to workforce members to ensure your medical billing matters are in safe hands.

Handling Current Accounts Receivable

This can depend primarily on the practice owner. However, most medical billing companies handle the current accounts receivable, leaving the old unanswered claims unattended.

Regardless, since this is completely up to the healthcare provider, practices can also choose to handle old claims themselves. It is important to note that, while the medical billing company handles the current A/R and the practice handles the former claims, there will be two separate medical billing processes functioning simultaneously.

Market Analysis

Medical billing workloads can often be cumbersome and expensive. Therefore, incidences of outsourcing medical billing have increased recently. Sources also highlight that the global outsourced medical billing market size is expected to rise to a surprising $19.7 billion globally by 2026. The annual growth rate is therefore expected to be 11.8%.

Additionally, market analyses highlight that the global outsourced medical billing market is expected to reach $25.3 billion by 2028, with a CAGR of 12.3%.

These trends are to be facilitated by the federal government’s mandate for electronic health records (EHR) implementation for stable revenue generation. Furthermore, rising healthcare costs and the implementation of ICD-10 codes will also contribute to increasing demand in the future.

The future of outsourced medical billing, therefore, seems promising, owing to the healthcare industry’s focus on prioritizing revenue generation and maximizing income. The government’s investment in driving the growth of outsourced medical billing is an important factor in its demand.

However, it is imperative to remain aware of the heightened possibility of data breaches in healthcare, which may affect the rising demand for outsourced medical billing.


Medical billing is an essential healthcare financial resource for facilities and practices today. Therefore, whether a practice chooses to utilize these facilities in-house or bring on board a skilled partner is a personal choice.

However, in order to ensure processes, run smoothly, efficiently, and error-free, outsourcing medical billing can, more often than not, be a wise choice.

Companies like talkEHR focus on the need-specific utilities of the practice and offer a robust combination of these to streamline a practice’s medical billing.

Healthcare financial automation is, therefore, a seamless occurrence with talkEHR’s medical billing.