Outsourced or in-house medical billing?

Why salary versus percentage is the wrong comparison

A biller on $52,000 does not cost $52,000. Add payroll burden — employer taxes, workers compensation, insurance, paid leave — and that is commonly 18–28% on top. Add billing software and clearinghouse fees. Add your own time managing it, which is real whether or not you bill yourself for it.

Salary is roughly two-thirds of the true figure. Compare the whole number, not the headline one. The cost calculator does this with your own inputs and shows every assumption.

The three questions that actually decide it

1. What is your claim count relative to collections?

This is the question almost nobody asks and it matters more than anything else. Billing workload tracks the number of claims, not the dollars. A percentage fee tracks the dollars.

So a practice submitting a modest number of high-value claims pays a lot for relatively little work, while a practice submitting many small claims gets a bargain. If you are the former, ask for a flat monthly fee instead — and treat a refusal to quote one as information.

2. Does your billing currently work?

Not "could it be better" — does it work. If claims go out within a day or two, denials are worked rather than resubmitted, and A/R over 90 days is under control, the honest answer is to leave it alone. Run the audit framework before deciding anything.

Outsourcing a working billing operation to save a few percent is a bad trade. Outsourcing a broken one is usually a good one, but so is fixing it.

3. What happens when your biller is away?

A one-person billing department stops entirely during holiday, sickness or resignation. That is not a cost you can put in a spreadsheet easily, but it is the single most common reason practices end up outsourcing — not cost, but continuity.

When in-house genuinely wins

It happens more often than billing companies suggest, and it is worth stating plainly.

• High collections, low claim count. Covered above. The maths frequently favours in-house, sometimes dramatically.
• Billing already works. If the audit comes back clean, the gain from switching is small and the transition risk is not.
• You have a genuinely strong biller. Someone who knows your payers and your specialty is worth more than their salary, and is not easily replaced by a vendor.
• The problem is a one-off. A pile of aged A/R or a credentialing backlog is a scoped project, not a reason to restructure. Buy the project.

When outsourcing usually wins

• You cannot hire. The staffing shortage is real, and an unfilled seat costs more than any fee.
• Your biller just left. This is the emergency case, and the clock is measured in days.
• Denials are not being worked. This needs specialised attention that a generalist in a small practice rarely has time for.
• You are growing faster than you can staff. Adding a second biller is a bigger step than adding capacity.

If you are weighing two doctors against one biller specifically, that case has its own page.