Medical BillingRevenue Cycle Management

Most small medical practices with less than eight doctors believe they need to add more providers and/or see more patients in order to be more profitable. They typically get this recommendation from their practice managers because it is an easy way to take pressure off the staff and transfer it to the practice owner. Medical practice owners are often overwhelmed with running the practice; they went to school to become doctors but now they find themselves worrying about profitability, as a business owner. A medical practice is a business and for the practice to stay independent, it has to maintain positive cash flow.

Higher cost of in-house billing staff

As a smaller practice owner, it is tempting to think you will save money by employing your own billing staff but the opposite is typically true. Practices frequently don’t estimate the cost of hiring, training, and benefits for those employees on top of payroll taxes and other hidden costs.  From a productivity standpoint, most billers manage claims submissions effectively but the problem comes in when accounting for rejected and denied claims. It takes several hours a day to call insurance companies, be on hold while waiting for a live person, and then get an answer for only three claims during each call. For additional denied claims, the whole process has to be repeated.  $262 Billion in medical claims are initially denied. (Source: change healthcare)

In-house billers usually have other practice management responsibilities which prevent them from following up on every denied claim. This results in, on average, 30% lost revenue from denied claims. (Source: Center for Medicare and Medicaid Services).

For most smaller medical practices, the billing department has one or two staff members, if one biller is out of the office the whole billing operation either comes to a halt or it’s severely affected. Due to these and other similar issues, on average $3B is left on the table annually from insurance non-payments.

Benefits of out-sourcing medical billing 

Outsourcing to a reliable billing company can:

  • Increase the revenue of small medical practices by up to 27% if the billing company payment model is based on collected revenue.
  • Monthly reports from the outsourced company gives you a clear picture of your claims.
  • It eliminates the headache of managing billing staff and frees up the office manager’s time to focus on streamlining the practice workflow.
  • It gives the doctor (practice owner) time & energy to focus on the most important task and their passion – caring for their patients.



  1. Wow, it’s great to know that revenue can be boosted through a medical billing outsourcing service. I think that would be something worth looking into when my brother starts his medical practice someday. If he builds his own clinic from scratch someday, getting a medical billing service right away would be very useful.

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