One-Stop Solution For Revenue Cycle Management Services


In-house Medical Billing vs. Outsourced RCM

As you expand your medical practice, at some point, you are bound to be befuddled by the task of choosing to either continue with the in-house medical billing process or outsource it to the experts. Medical billing or Revenue Cycle Management (RCM), as it is commonly known, plays a crucial role in determining your business’s cash flow, making it essential to invest enough time and thought in making the decision. There is no one-size-fits-all answer to this perplexing question. While both methods have proved successful for many healthcare businesses, what you choose should be solely based on the age and size of your business, costs involved in running the practice, volume metrics and what your business needs.

Are you still confused? Well, don’t be. Here, let’s take a look at some pros and cons of both methods:

Pros of in-house medical billing

Direct control over RCM

In-house medical billing allows you to hand over the job to people you know and trust. The staff managing medical coding and billing could have been associated with the organization for many years, giving them an insight into how you like running the process and they may keep you posted about the smallest of details. Thus, keeping medical billing in-house allows you to have hands-on control of financial operations daily.


Since it is easier for you to track and observe every step of the in-house medical billing process, you are in a better position to try new methods and launch initiatives you feel may benefit the RCM. While the new methods may or may not work in your business’s favor, you will still have the flexibility to choose your way as and when you want to.

Close proximity

Having your billing department under the same roof as your practice allows you to connect with your billing staff and address any issues faced by them at a moment’s notice. In fact, you can just walk across the office to where your RCM team operates and resolve billing-related problems instantaneously.

Read Also – 10 Ways to Improve Your Billing Process

Return on Investment

If you have been in the healthcare business for a while, there are high chances that you may have already invested in setting up an in-house medical billing team comprising billing experts, trained staff and paid billing technology. With a solid billing infrastructure in place, you just need to fine-tune the weak areas of the operation and refine its strengths for better results.

Cons of in-house medical billing

High cost

Every additional in-house headcount means additional expenses in terms of salary and employee benefits. Plus, the expenses towards purchasing billing software, training your staff and keeping them updated on the latest technologies, rules and regulations—put together, all this will add up more than the cost of outsourcing the job to a third party.

Increased dependency on limited staff

If your billing team consists of only two or three employees, then you run the risk of stalled operations in case of an emergency, demanding extended leave, with even one of them. Or even worse, if two of them decide to quit at the same time, you will have a tough time keeping the process going. Getting new recruits mean additional costs in terms of training them to fit in your business’s RCM operations.

More scope for errors

Compared to an organization that specializes in outsourced RCM, the chances of errors in billing operations is much higher when managed by individual staffers. Also, there is an increased risk of general employee neglect which may go unnoticed in absence of an employee performance tracking system.

Time consuming

While increased direct control on billing operations may get you in the knowhow of RCM, it will eat up your time for actual patient care. Since your establishment’s primary offerings are clinical services and patient care, not investing enough time to focus on those may harm your reputation and make you lose business in the long run. Be wise and outsource processes that do not demand your expertise, time or energy, and focus on what only you can do best for your healthcare business.

connect with practolytics

Pros of outsourced RCM

More time for patient care

By outsourcing RCM, you no longer need to invest time in hiring, training and managing the billing staff. All your RCM-related needs such as bill payments and following up on reimbursements will be taken care of by industry experts. Outsourcing RCM will give you more time to focus on making the best of your medical expertise, enhancing patient care and expanding your practice.

Increased accuracy and compliance

On hiring an expert medical billing services provider, you will notice that all billing-related processes of your healthcare business are managed professionally. Since the organization specializes in executing outsourced RCM, managing your business’s RCM will be a full-time job for them. They will take care of everything that comes under the purview of billing operations—such as adhering to legal formalities, following up on rejected claims and more—strictly following the industry standards of accuracy and efficiency.

Better revenue optimization

One of the biggest advantages of outsourcing RCM is that it will help your staff to shift focus from billing operations to improved patient care while saving you the money earlier invested in running and managing the in-house medical billing team. You do not have to worry about paying for software, supplies, administrative costs, salaries and employee benefits for the in-house billing staff. In addition, the third party managing your RCM operations will cover all the possible avenues of revenue generation for your business. Be it sorting it out with insurance companies to get you the most favorable results or following up with parties responsible for delayed payments or even disputing claim denials—they will do it all. It is their job to ensure you do not suffer from revenue loss and receive timely payments.

Improved transparency

Outsourcing your business’s RCM does not mean not having any access or control over the processes. Your RCM provider will share data and details of your billing operations periodically. You can ask for comprehensive performance reports that will give you an insight into how your billing operations are executed and managed. This improves the transparency in operations without you having to micromanage a billing team.

Lower margin for error

Since RCM service providers are experts at handling claims and do it on a daily basis, the chances of a miss or an error are significantly lower as compared to individuals handling billing operations. In addition, being industry experts, they are experienced in processing claims and streamlining billing operations in a way that reduces the rate of errors to a minimum and ensures that you get your payments on time.

Read –5 Smart Tips for Improving Revenue Cycle Management

Cons of outsourced RCM

No direct control over RCM

Unlike in-house medical billing operations, outsourcing RCM means having lesser control over the processes. Since the operations are managed by the industry experts, they will have a pre-set method for execution that is compliant with the law and rules of the industry.

Variable cost

The payment method of every RCM service provider varies. While some ask for a fixed fee, some may charge you a percentage of your earnings; the more you earn, the more you will have to pay the company and vice versa. This can make it difficult for you to budget your expenses as the cost to the RCM provider itself may vary widely every month.

Hidden Fees

Similar to any other contractual services, there could be some hidden fees that may not show up during the negotiation. Read the outsourcing contract carefully and look for fine-print charges such as fees for sending email reports or sharing printed statements. Make sure that you are fully aware of the terms and conditions of the deal before signing the documents.

So, this is it. The decision of choosing between keeping medical billing in-house or outsourcing it to an RCM service provider could be a tough one but is important for your business’s growth. Now that you know the pros & cons of in-house billing and outsourced RCM, you should be able to make an informed decision based on your business needs. Just remember, whatever you choose should be in tandem with the goals you have set for your practice.

case study-medical billing-practolytics