Back to Reality: 5 Truths About In-House Patient Collections

Healthcare systems themselves are convinced there aren’t any practical solutions when it comes to revenue cycle management. As a medical practice, receiving every dollar that is rightfully yours is critical to your overall success and vitality. Therefore, the common question of whether to outsource patient collections or keep the process in-house is one that weighs heavily on many hospitals and practices, regardless of size.

There are many myths within the medical billing industry. Among them is the myth that keeping your medical billing and collection practices in-house will save you money. But you may want to reconsider that myth. Your cash flow relies on billing and revenue cycle management, so the decision of how to handle these services should not be taken lightly.

In the preliminary stages of your decision-making process, it’s important that we clear up a few truths about in-house patient collections.

1. Close proximity isn’t necessarily more beneficial


Close proximity does not equal effective control. A lot of healthcare organizations fail to acknowledge that just because a biller is working internally, doesn’t mean the company has the time to supervise them. Managing the daily tasks as well as treating patients is a job within itself. To manage an in-house biller means you’re also managing your entire revenue cycle. That is just a burdensome amount of extra work. Outsourcing revenue cycles actually offers more control with less time-consuming responsibility and more dedicated specialists.

2. It is NOT cost-effective

The expenses of paying biller’s salaries is not the only requirement for in-house patient collections. You also need to cover employee benefits and purchase technology systems. This adds up much higher than what is commonly paid out to third-party healthcare BPO companies. Hiring your own biller and purchasing a do-it-yourself medical billing software will become extremely costly in no time. Not to mention a 401k, training, sick days, vacation and the turnover.

With outsourcing, you will find that you actually save money. Most billing services are pay-for-performance. So, if you don’t get paid, they don’t get paid. However, if you opt to keep everything in-house, your payroll most likely runs the same time each month regardless of the performance of your biller.

3. It takes much more time and training

With the transition to ICD-10 set to take place this year, healthcare organizations seem to be overwhelmed as the cost of operations continues to to rise. This in turn, affects everyone within the organization, as pressure is added on everyone from the physician to the staff. Instead of focusing on the needs of the patients, they also have to tend to administrative tasks to ensure proper work flow. Having the appropriate time to train and educate staff on these issues is simply not feasible. And if it is, the amount of time it would require to train a variety of skills involved in collections, phone etiquette and utilizing chosen billing software could equate to larger employee turnover. That time is money.


Outsourcing companies have a set of qualifications that are tried and tested to hire employees that can deliver quality work, therefore acquiring a talent pool of medical billers and coders. You get immediate access to highly-skilled expert personnel that will mitigate risks from changing regulations, as well as any problems that may arise.

4. Greater chance of liability

In-house medical billing departments can go largely unnoticed if managers don’t keep a stringent eye on billing operations. Many healthcare providers assume their medical department is doing okay. But how can you be sure? Billions of dollars are lost to internal business theft every year, and healthcare is found to be the third most embezzled industry in the country. The only way to really be sure how your department is doing is by receiving insurance reports on a monthly basis from your billing department. These reports will show you how long it’s taking for your claims to be paid and if these reports are actually accurate. Just because someone is getting paid, doesn’t mean a lot more money wasn’t left on the table.

Outsourcing covers a wide scope in terms of security and compliance metrics, and employs a competent workforce that evaluates every single detail and significant area to provide outstanding patient care and satisfaction.

5.  It’ll be hard to manage an internal team while focusing on the challenges of ICD-10

Say you have an internal team managing your patient collections. ICD-10 is going to hit, and then it will most likely complicate, if not slow down, the process due to shifts in reimbursements, codes and protocol. It requires many long hours of focus to train staff on ICD-10, as well as practice implementations. So if you haven’t made preparations and don’t have the necessary time to train your staff within the next coming days, it may be beneficial to outsource your billing to a company that has been prepared to handle the anticipated new codes. Having an outsourced team, you won’t have to worry about managing your patient collections, and instead, can focus on caring for patients while your team focuses on getting ICD-10 processes in place.

There are many truths to take into consideration about in-house patient collections, more than we even have listed, when you are debating on which route to forego. Outsourcing is a great step towards streamlining operations and will provide many great benefits to a practice.

  • Increase revenue

  • Reduce expenses

  • Access to highly skilled personnel

  • Expand your capabilities

  • Guaranteed quality output

  • Ability to concentrate on your core business duties

Making sure that your insurance claims are handled correctly the first time is a step in getting the revenue cycle management on track. Partnering with an outsourcing company that has a customized revenue cycle management process in place will undeniably increase that accuracy.

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Topics: Healthcare BPO Companies