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7 Disadvantages of Outsourcing Your Medical Billing


Medical billing can be a demanding and challenging task for small medical practices. For this reason, many physicians or practice managers make the choice to outsource their medical office billing to a professional medical billing company. There are many disadvantages to outsourcing medical billing. Loss of control of the work being performed or the billing performing the work are just two examples.

Consider both advantages and disadvantages of outsourcing your medical billing before making a decision about whether to bill in-house or outsource the billing of your medical claims.

1. No Control Over Employees

Medical office managers may be hesitant about not having direct control of the medical billing staff. Medical office managers are responsible for a number of functions in the medical office including the revenue cycle, finance management and accounts receivables. Not having the ability to directly supervise the work being puts medical office managers in a vulnerable position. They have to trust that the work is being performed accurately, efficiently and in a timely manner.

2. Risks to Patient Satisfaction

Patient satisfaction can sometimes suffer due to outsourcing. Patients like having the ability to walk into their doctors office to make their payments, set up payment arrangements or discuss the specifics of their bill. It is easier to build a relationship with customers with the more personal feel that inhouse billing offers. Patients are less likely to be satisfied by the service they receive when they can only discuss important matters over the phone.

3. HIPAA Privacy and Security Breaches

Outsourcing your medical billing can present a possible problem with HIPAA privacy and security. Although, violations of HIPAA privacy and security can occur with inhouse billing, it can present an even greater risk when medical billing is outsourced. Whether intentional or accidental, unauthorized disclosure of PHI is considered a violation of HIPAA. The more people that have access to private and confidential patient information, the greater the risk for a breach.

4. Possible Hidden Costs

Often the hidden costs are not extra costs that are not disclosed by the outsourcing company. Hidden costs refer to costs associated with preparing for your medical office switching from inhouse billing to outsourcing. There are other costs as well. To prepare for the work arrangement between the medical office and the outsource company, there may be much time spent coordinating the contract and costs occurred for legal fees. There is also the possibility that you may need to hire at least one person to act as a liaison or contact between the medical office and the outsource company.

5. No Flexibility

All business practices are under the control of the outsourcing company. Depending on the demands of your medical office, having control of every day business practices gives the medical office manager some flexibility. Based on the changing conditions of the medical office, a manager has no flexibility for requesting overtime to increase productivity, changing employees work hours to suit the needs of the patients, and the openings and closings on holidays. This could be the difference between high or low performance for a certain month.

6. Limitations

Limitations may exist within some outsourcing companies. The services they provide may be limited due to the lack of access to information and a lack of communication between the medical office and the outsourcing company. Inhouse billing staff have easier access to medical records and other patient information. An effective communication process needs to be developed during the contracting phase to ensure that the outsourcing company receives the proper information they need to be successful in billing your medical claims.

7. Contractual Misunderstandings

Everything seems to be going as well during the coordination stages but then things seem be going in a downward spiral. Both parties have interpreted the contract differently.

This scenario is common among many agreements. Legal lingo can cause contractual misunderstandings between the medical office and the outsourcing company. No contract will be perfect and it may be necessary to make adjustments to the contract length, terms and conditions, and expectations of both parties.

Both advantages and disadvantages exist for outsourcing your medical office billing. Be sure to weigh all options before making your decision.

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