7 Benefits to Outsource Medical Billing Services in 2024

medicare wellness visit

As we step into 2024, the challenges in billing create a pressing need for innovative solutions realized through the benefits of outsourcing medical billing. Medical billing, with its ever-evolving regulations, coding intricacies, and the constant pressure to minimize claim denials, tends to become a headache for healthcare providers when it’s least expected. 

The burden of navigating billing intricacies can lead to operational inefficiencies, revenue leakage, and a strain on the overall financial health of healthcare organizations. These challenges continue to drive demand in the billing outsourcing market.

Copy of rpm blog reimbursement

According to recent studies, the medical billing outsourcing market is exploding with an annual compounded growth rate CAGR) predicted to hover around 16.9% for the next eight years, equating to $55.6 billion annually by 2032. 

But why is there such a massive growth in this billing outsourcing market? This article will explore 7 of the benefits practices realize once they outsource medical billing.

Table of Contents

Billing Challenges Facing Larger Healthcare Organizations

Larger healthcare organizations often grapple with intricate billing challenges stemming from the scale and complexity of their operations. The sheer volume of patient data, intricate billing codes, and diverse payor contracts and arrangements can lead to increased complexities in the billing process.  

Managing a high volume of claims, each with its unique set of requirements and potential pitfalls, poses a significant challenge. Additionally, large healthcare entities face the hurdle of maintaining compliance with evolving healthcare regulations and industry standards, which necessitates sophisticated billing strategies.  

Efficiently navigating these complexities requires a strategic approach, advanced technologies, and a well-coordinated team to ensure accurate and timely reimbursement while upholding the financial health of the organization. 

But time and capacity constraints sometimes prevent organizations from optimizing their billing operations which in turn affects the bottom line. This is why outsourcing billing to 3rd party vendors becomes a more viable choice.

7 Reasons to Outsource Medical Billing Services in 2024

From time-saving benefits and cost reduction to enhanced data security and improved revenue cycle insights, outsourcing billing and coding proves to be a pivotal solution for healthcare providers navigating billing complexities. 

Let’s dig right in.

1. Labor Shortage Resolution 

Recent studies showed that by 2025, there would be a shortage of 400,000 home health aides and 29,400 nurse practitioners and another study suggested a shortage of 122,000 physicians by 2032.  

But on the non-clinical side, the effects are felt as well. Organizations are spending exorbitant amounts of money on finding, recruiting and training personnel, only to see them leave a couple of months later.  

Medical Billing Companies help to prevent operational disturbances by supporting pre-trained team members with back-ups to ensure no hick-ups occur due to the effects of the labor shortage. 

2. Reduce Costs 

By entrusting billing responsibilities to external experts, medical facilities can avoid the substantial expenses associated with maintaining in-house billing teams. The need for state-of-the-art IT equipment, software updates, and the hiring and training of specialized staff becomes obsolete, streamlining operational costs.  

Additionally, outsourcing eliminates the financial burden of recruiting and training an in-house billing team, offering a cost-effective alternative. Professional billing services provide comprehensive solutions, often at lower prices, enhancing financial efficiency and mitigating liabilities compared to keeping billing processes in-house. 

3. Increased Efficiency and Accuracy 

A medical billing service company’s expert teams are trained and experienced in handling all aspects of medical billing (benefit verification, coding, claims submission, payment collections, etc.) Because of this, the medical organization enjoys more accurate and efficient billing processes, reducing the risk of denied or delayed claims. 

On top of that, medical billing companies like Neolytix possess robotic process automation (RPA) capabilities to streamline processes and reduce errors even more. RPA replaces repetitive, rule-based activities and frees the personnel to focus on more human-centric activities instead.   

If you want to learn more about RPA in your healthcare organization, contact us to schedule a free demo.  

4. Avoid Overbilling and Underbilling 

If your practice constantly uses the highest codes to bill, you risk being flagged by a Preferred Provider Organization (PPO) or Medicare. This can result in audits and severe penalties. On the other hand, bills are too low, and you may leave money on the table. 

How can you strike the perfect balance and bill at the right level? 

That’s where a medical billing service comes in! Billing companies typically employ a team of coding experts and perform coding audits to improve the accuracy of the coding and billing process.  

They’ll get your billing rates exactly where they need to be to optimize cash flow without risking an audit. This is one of the chief ways outsourcing medical billing will boost your bottom line. 

5. Secure Patient Data 

Organizations are mandated by the U.S. Department of Health and Human Services to reveal instances of data breaches impacting over 500 individuals. The department’s data for 2023 indicates the reporting of 541 breaches.  

outsource medical billing services,outsource medical billing,outsource billing services,benefits of outsourcing medical billing services,medical billing outsourcing services,medical billing outsourcing companies,benefits of outsourcing medical billing

Medical billing companies put cybersecurity front and center. After all, their business lives and dies by the trust healthcare providers place in them. Even one data breach could ruin their reputation and end their career. 

When hiring a medical billing company, do your homework first. Investigate their past security record and make sure they’re trustworthy. A good medical billing service will handle cybersecurity and protect patients’ records to prevent unnecessary breaches as we’ve seen above. 

6. Access To Advanced Technology  

Medical billing companies typically invest in advanced technology and software that streamlines the billing process, which can improve the accuracy and speed of billing and payment collection. Omnichannel technology will also positively affect the patient experience at a practice.  

Neolytix, for instance, harnesses the power of AI to perform sentiment analysis on all communication platforms. The data retrieved is then used to improve future patient communications. 

7. Deeper Insight Into the Revenue Cycle  

Do you know if your billing operations are improving or stagnating? How is coding and billing influencing the other steps in the revenue cycle? Who is keeping track, and how are they doing this?  

Revenue Cycle Management (RCM) is a holistic approach to ensure that the entire process from patient first contact to authorizations to collections, is seamless and creates a synergy between the various processes.  

Thanks to the expertise and technology of medical billing companies, they can provide intuitive reports and highlight performance and growth areas. Depending on the company, these in-depth reports are provided frequently as per agreement or on-demand whenever requested. 

What Are the Fee Structures or Pricing Models for Outsourced Medical Billing?

The rates for medical billing services vary from vendor to vendor. Below you will find three of the most common fee models to give you an indication.  

Outsourced Onshore Medical Billing Services 

  • Medical billing companies in the United States ask between 4% and 9% of monthly collections.. 
  • Minimum charges vary from $2,500 to $4,000 per month. 
  • However, this can quickly change depending on your volume and how many billers the company will hire to service the minimum hours your billing requires. 

Outsourced Offshore Medical Billing Service 

  • They generally offer lower rates than their onshore counterparts. 
  • They range from 2% to 3% of monthly collections. 
  • Minimum charges are much cheaper than onshore services, usually around $500 monthly. 

Hybrid Billing 

  • When a practice employs both onshore and offshore resources to perform various tasks. 
  • Onshore services do the more complex aspects of billing, such as checking claims and reviewing errors. The bulk of transaction processing work, such as claim entry and payment posting, is outsourced offshore. 
  • Hybrid services range from 3% to 5.5%.

What’s the ROI on Outsourced Medical Billing?

If you consider the demand growth, it suggests that there should be a positive return on investment (ROI). Why else would more and more healthcare organizations line up to outsource their medical billing operations?

Apart from other macro-economic variables such as the current labor shortage in the healthcare industry playing a role, a primary motivator is the ROI of outsourcing medical billing.  

An Estimation of ROI 

  • Consider that you are a $10 million healthcare organization that collects around 85% of the bill owed. 
  • Uncollected annual revenue= $1.5m
  • An MSO with a 90% to 95% revenue collecting power can help bring down the uncollected figure between $1m to $500,000.
  • Your net collections will increase by an amount ranging from $500,000 to $1m
  • If the agency charges 4% for their services, you would still be collecting an additional $100,000 to $600,000 more.

Thus, outsourcing your medical billing services will not only increase your collection but will also reduce overhead. Think of the additional costs your billing team accrues. We’re not only talking about the obvious costs like computers, licenses, salaries, etc. but also the absences for paid leave, sick leave, etc.

These additional costs should also be included in the savings calculation when trying to determine the viability of outsourcing medical coding and billing.

How does it work?

Every billing company would have a different approach to onboarding procedures. After almost 12 years of offering full-spectrum RCM and medical billing coding services to healthcare organizations nationwide, we have perfected the process. 

  • Our process starts with a thorough consultation, during which we actively engage with you to gain insights into your distinct needs and challenges. This initial phase lays the groundwork for crafting a personalized approach to cater to your specific medical billing requirements.
  • Following the consultation, we design a bespoke solution tailored to address the pain points identified earlier, aiming to streamline and improve your billing processes.
  • The implementation stage involves our adept team seamlessly incorporating this tailored solution into your existing workflow, with a commitment to minimizing disruption while maximizing efficiency and revenue generation.
  • We are dedicated to meticulous execution, continuous monitoring and reporting, and ongoing refinement to optimize and enhance your revenue streams. This comprehensive strategy ensures a positive and sustainable impact on your long-term financial health. 

Our HIPAA-compliant expert billing teams are familiar with the best practices and armed with best-in-class technology for preventing revenue leakage, enhancing collections, and improving your overall revenue.  

Schedule a FREE, no-obligation below to learn how to stop revenue leakage and improve the overall financial health of your practice.

Get Help with Billing, Credentialing, & Virtual Assistants - Work With A Team of Experts

  • What EHR are you using to bill claims to Insurance companies, store patient notes.
  • This field is for validation purposes and should be left unchanged.

Stay ahead of the curve & join our provider community to get updated on the latest industry trends.

Newsletter (Active)

Homepage Asset Icon 16
Homepage Asset Icon 17
Form Image