Return on Investment of Outsourced Medical Billing: Numbers Drive Growth
There are a lot of things that affect the financial health of medical practices today. Many practices have to work with budgets and still provide high quality care. They also have to deal with rules and regulations. One thing that can really affect their finances is medical billing. Some people think medical billing is not that important. It can have a big impact on a practice’s revenue and overall health.
Many medical practices are now outsourcing their billing. It is very important to understand the real return on investment of outsourcing medical billing.
Most of the time people talk about outsourcing billing they just make assumptions or use fancy marketing words to make it sound good. Let us look at the real numbers and results of outsourcing medical billing. The impact on a practice’s finances can be bigger than people think.
What is Return on Investment in Medical Billing?
Return on investment in billing means the money a practice gets back from investing in its billing operations.Return on investment is not about saving money it is about:
- getting money from patients
- reducing the number of claims that are denied
- getting paid
- lowering the cost of running the billing department
- making sure everything is done correctly
It basically measures how well the billing process is working.
Hidden Costs of Doing Medical Billing In-House
Some people think that doing billing in-house is cheaper.
- The cost of hiring and keeping staff
If a practice hires people to do the billing it has to pay:
- Salaries
- Benefits
- Training and certifications
- The cost of technology and equipment
To do billing a practice needs special tools:
- Software to manage the practice
- Fees to use the clearinghouse
- IT support and maintenance
- Losing Money
Another cost of doing billing in-house is the money that is lost.
According to the numbers:
- 10 to 20 percent of claims are denied at
- up to 65 percent of denied claims are never resubmitted
- 5 to 10 percent of revenue is lost because of coding and billing mistakes.
How Outsourced Medical Billing Works
Typical outsourcing companies charge a fee for each dollar they collect which’s between 4 and 9 percent per year.
At first it may seem like the costs are the same as doing medical billing in-house. There are big advantages to outsourcing such as being more efficient, having more expertise and using better technology, which can all increase revenue.
Return on Investment: A Side by Side Comparison
We have seen many medical groups make more than 300 percent return on investment from outsourcing their medical billing.
Where the Return on Investment Actually Comes From
- Better Collection Rates
Professional billing companies are good at getting the money from patients through:
- Accurate coding
- Sending claims on time
- Following up with patients
- Fewer Denied Claims
Coding and documentation errors are the reasons why claims are denied.
- In-house denial rates: 10 to 20 percent
- denial rates: 3 to 7 percent
It is not just about having a team to help. The real value is in recovering lost revenue.
- Faster Payments
Getting paid quickly is crucial for any practice.
- In-house billing: 30 to 60 days to get paid
- Outsourced billing: 20 to 30 days
- Less Administrative Work
Outsourcing reduces the workload on the practices staff, which means:
- Doctors can focus on patient care
- Front desk staff can improve patient experience
- Management can focus on growing the practice
This leads to both operational benefits.
Conclusion
There is definitely a return on investment when outsourcing billing. For practices the return on investment can be 200 to 350 percent or more. It comes from collections, reduced costs and other efficiencies that greatly improve a group’s finances.
Our medical billing services help practices by calculating payments and credit balances which streamlines the workflow and allows for more time to focus on providing quality healthcare and growing the practice.
MIU Medical Billing is committed to helping medical practices succeed in today’s challenging healthcare market by maximizing revenue and minimizing tasks. Our clients include Surgical Centers, DPC practices, Otolaryngology practices, Dental practices, Chiropractic practices, Pain Management, Urgent Care centers and Occupational Medical centers. Whatever type of practice you have MIU Medical Billing can help you find profits.
FAQs:
- Is outsourcing billing cost-effective?
Yes, it reduces denied claims and lowers costs.
- How much do billing companies charge?
Typically, 4–9% of collections.
- How fast will I see ROI?
Most practices see results in 3–6 months.
- Can outsourcing reduce denials?
Yes, from 10–20% in-house to 3–7%.
- Does it free up staff time?
Yes, allowing more focus on patient care.
