The True Cost of In-House Billing vs. Outsourcing

The hidden costs of an in-house billing department

Salary is only the beginning. A single full-time biller costs a practice salary plus payroll taxes, health benefits, paid time off, training, workstation, and practice management software licenses. Add turnover, which is high in billing roles, and the cost of claims that sit untouched while a position is vacant.

Most practices also underestimate the cost of a biller's limited bandwidth. When one person handles charge entry, submission, posting, denials, patient calls, and follow-up, the follow-up is what gets dropped, and unfollowed claims are lost revenue.

A realistic comparison

For a practice collecting $2 million annually, an in-house team of two billers typically costs $130,000 to $160,000 per year all-in, before software. Outsourced billing at 2.49% to 5% of collections costs $50,000 to $100,000 and includes coding, denial management, follow-up, reporting, and a team that scales with volume.

The larger difference is on the revenue side. Dedicated follow-up and denial management routinely increase net collections by 5% to 15%, which on $2 million is $100,000 to $300,000 of additional revenue every year.

When outsourcing makes sense

• Your days in A/R exceed 40 or your denial rate is above 5%

• Billing staff turnover disrupts cash flow

• You are adding providers or locations and need to scale quickly

• You want real-time reporting without building it yourself

• Out-of-network or specialty billing requires expertise you do not have in-house

The bottom line

Outsourcing to Simplify Billing Services saves clients up to 40% on operating costs and increases revenue by 10% or more. Pricing starts at 2.49% of collections with no setup fees. Contact us for a side-by-side cost analysis for your practice.