Why Outsource Your Medical Billing?
If you run a small clinic or solo medical practice, you already know how challenging it can be to balance patient care with administrative tasks. Medical billing—the process of coding, submitting, and tracking claims—is one of the most important yet time-consuming parts of running a practice. Every billing error can delay payments, increase denials, and hurt your bottom line.
Outsourcing your medical billing means partnering with a specialized company to handle claim submissions, coding, payment posting, and insurance follow-up. Done right, it can free up your time, improve accuracy, and boost collections. In this guide, we’ll break down the pros and cons of outsourced medical billing, explain how the process works, and help you decide if it’s the right move for your practice.
Pros of Outsourcing Medical Billing
1) More Time for Patient Care
When you’re not bogged down with billing tasks, you can focus on what matters most—treating patients. Instead of chasing down unpaid claims or fixing coding errors, your time and your staff’s time go toward delivering quality care. This can lead to better patient satisfaction and, in many cases, more billable services.
2) Reduced Errors and Denials
Professional billing companies employ certified coders and billing specialists who stay current on coding updates and payer rules. Studies show outsourcing can raise a clinic’s claim collection rate to ~95% compared to ~70% in-house, while also shortening payment cycles by 10–30% (DrChrono, 2024). Fewer mistakes mean faster reimbursements and steadier cash flow.
3) Cost Savings and Efficiency
Hiring and maintaining an in-house billing team comes with salaries, benefits, software, and training costs. Outsourced billing companies typically charge a percentage of collections or a flat per-claim fee, aligning their payment with your revenue. For many small practices, the increase in collections plus the savings on overhead far outweigh the service fees.
4) Access to Expertise and Technology
Outsourcing gives you access to advanced billing software, reporting dashboards, and compliance monitoring—tools that may be too expensive for a small office to implement on its own. Companies like GladMed RCM use enterprise-grade claim scrubbing and tracking systems to improve accuracy and protect your revenue cycle.
5) Improved Cash Flow and Revenue Cycle Management
Efficient claim submission and proactive denial management keep money moving. In 2023, 43% of small practices saw improved collections within six months of outsourcing (Practolytics). A healthy revenue cycle means fewer outstanding balances and more predictable income.
Cons of Outsourcing Medical Billing
1) Less Direct Control
When a third party handles your billing, you won’t have the same day-to-day oversight. To stay informed, choose a partner that provides regular reports and scheduled check-ins so you can track performance without micromanaging.
2) Potential Hidden Costs
Some billing companies charge setup fees, monthly minimums, or extra for services like patient billing. Always review contracts carefully, ask for a breakdown of fees, and work with a transparent partner that aligns costs with collections.
3) Patient Perception and Service Concerns
Some patients prefer dealing directly with your office for billing questions. To avoid confusion or frustration, pick a billing company known for professional, patient-friendly communication, and let your patients know in advance who will be contacting them.
4) Data Security and Compliance Risks
Outsourcing requires sharing sensitive patient data. Only work with providers that are HIPAA-compliant, sign a Business Associate Agreement (BAA), and use strong data security measures like encryption and access controls.
5) Transition and Coordination Effort
Switching from in-house to outsourced billing takes planning—sharing fee schedules, giving EHR access, and training your new partner. There may be a short-term dip in efficiency during onboarding, but clear communication can smooth the process.
How Outsourced Billing Works
Here’s what to expect when you outsource your medical billing:
1) Choosing a Partner – Look for a company experienced in your specialty, with transparent pricing, strong references, and the ability to handle your full billing needs.
2) Onboarding and Setup – Sign a contract and BAA, provide credentials, patient demographics, and grant secure access to your EHR or practice management system.
3) Claim Submission – After each visit, your billing partner verifies documentation, assigns correct CPT/ICD/HCPCS codes, and runs the claim through a claim scrubber before submission.
Insurance Follow-Up – The billing service monitors claim status, resolves denials, and ensures payments are posted quickly.
4) Patient Billing & Support – For patient balances, they send statements, manage calls, set up payment plans, and answer questions professionally.
Ongoing Reporting – Expect monthly reports with KPIs like collections, denials, and A/R aging, plus meetings to review performance and address issues.
Making the Decision – Is Outsourcing Right for You?
Ask yourself:
Are billing errors and denials delaying your payments?
Is your staff juggling multiple roles without time for proper billing?
What’s your current collection rate, and could it be improved?
How important is retaining full control over billing operations?
If you answered “yes” to the first two, or your collection rate is lower, outsourcing could be a smart investment.
Ready to simplify your billing and protect your revenue?
GladMed RCM specializes in outsourced medical billing for small practices, combining certified expertise with transparent reporting. From claim scrubbing to denial management, we handle the financial side so you can focus on patient care.
Contact us today for a free consultation and see how we can improve your collections, shorten payment cycles, and give you peace of mind. Your practice’s financial health matters—let’s strengthen it together.