The ins and outs of billing: Pros and cons of outsourcing

Whether you handle patient billing or hire an outside firm can have a big impact on your practice's bottom line -- and not necessarily a good one. Here are some things to consider before deciding on in-house versus outsource.

By Larry Stevens, AMNews correspondent. April 16, 2007.

For many doctors, the choice to outsource billing is not like, say, hiring someone to mow the lawn: You could do it if you wanted to, but you have better things to do. It's more like having a plumbing emergency: You find yourself with a crisis -- or at least a persistent leak -- and you need professional help.

Take Marc D. Grobman, DO, a solo internist at Internal Medicine and Primary Care in Wilmington, Del. He had been an employee of a hospital-owned practice until June 2001, when he purchased the practice. Suddenly he found himself having to staff up quickly, and he realized, "Finding and hiring someone who could hit the ground running with billing would have been very difficult."

So Dr. Grobman decided to take what he considered to be the easier and safer road. He hired Health Care Practice Management Inc., a billing service and billing consulting firm, to handle his billing. Initially, when his office couriered the paper superbills to the billing service, the company charged him 10% of revenue. Dr. Grobman gradually began to bring in new technologies, including a system that allows his staff to enter the billing data and send them electronically to the service, so the fee has dropped to 8%.

Dr. Grobman would prefer to hang on to that extra percentage. But his accounts receivables arrears is less than 5%, compared with the 7% he says is a national average for his specialty. In addition, he says he is getting 98% of money due compared with 75% when he was part of the hospital network. "At first [using a billing service] was a virtual necessity. Now I see no reason to bring it in-house because it's working out so well," Dr. Grobman says.