Have you ever wondered about outsourcing your revenue cycle management operations? Or have you ever faced difficulty with provider credentialing? Most of the practices have stumbled upon these two difficulties. For some, these are daily challenges.
If you have faced these difficulties, then you must have also wondered what benefits you can gain by outsourcing your services to specialized medical credentialing companies or billing partners. If yes, then this blog is all about you.
In this guide, we will discuss the benefits that you can gain by partnering up with RCM companies and vendors. So, let’s start.
Current Healthcare Administrative Situation
Before we discuss the benefits, let’s briefly take a look at the current situation of the administrative burdens of healthcare providers.
Healthcare providers face mounting pressure to balance exceptional patient care with complex administrative demands. Managing billing and credentialing processes in-house can drain resources, create inefficiencies, and ultimately impact your practice’s financial health.
Due to these issues, the demand for medical billing companies is increasing, not only in the USA but also worldwide. According to research by Grand View Research, the global medical billing outsourcing market was valued at USD 12.2 billion in 2022 and is projected to reach USD 30.2 billion by 2030. This is a CAGR of over 12%, which is huge.
Let’s look at some more stats from the medical billing industry:
Turnover Statistics:
- Hospital turnover average: 20.7% (2024)
- Revenue cycle specialists: 11-40% range
- Front office support staff: 40% turnover rate
- Overall healthcare administration: 33.3% turnover
Cost Savings: The Primary Driver for Change
Let’s now look at the benefits. The first and also the most important thing for all of us is cost savings. Many people think that outsourcing is an extra cost; however, they are far from the reality. Outsourcing is far more beneficial than handling everything in-house.
Healthcare providers can achieve significant cost reductions through outsourcing. Research shows that practices utilizing outsourcing billing services can reduce their billing costs by up to 30%. For credentialing specifically, outsourcing can slash costs by up to 50% compared to in-house management.
To make things clearer, let’s look at an estimated cost breakdown and comparison between in-house management and outsourcing.
| Cost Component | In-House Annual Cost ($) | Outsourced Annual Cost ($) | Savings ($) |
| Billing Department Operations | 120000 | 5000 | 115000 |
| Software & Hardware | 8000 | 500 | 7500 |
| Training & Development | 15000 | 0 | 15000 |
| Benefits & Overhead | 35000 | 0 | 35000 |
| Total Annual Costs | 178000 | 5500 | 172500 |
Better Accuracy And Reduced Claim Denials
Professional billing services consistently demonstrate superior accuracy rates compared to in-house teams. Various industry reports highlight that outsourced billing companies typically achieve 10-20% higher claim approval rates than in-house teams.
For a practice generating $3 million annually, eliminating just half of these errors through professional billing services could recover $75,000 to $150,000 in lost revenue.
But you might ask here, what are some good metrics for these companies that you should look for? Well, every company is different, but the following are the industry averages for the most important aspects:
- First-pass resolution rates > 95%
- Days in accounts receivable < 30 days
- Net collection rates > 95%
- Denial rates < 10%
Better Cash Flow and Revenue Cycle Management
Outsourced billing services significantly improve payment processing times. Practices typically experience 10-30% faster payment timeframes when working with professional billing companies.
How? The following are some areas that these companies can improve:
- The vendors have professional relationships with payers and an understanding of specific requirements
- These companies have dedicated teams to monitor claim status and address issues immediately
- They also have advanced automated systems that flag potential problems before submission
Specialized Expertise Across Medical Specialties
Different medical specialties require specific billing knowledge and credentialing requirements. For instance, if you have a dermatology practice, you will have to hire specialized dermatology billers for your in-house team. The problem is that these specialized billers are hard to find and expensive to hire.
However, this becomes very easy with outsourcing. All you have to do is partner up with a company that is an expert in dermatology billing services, and they will handle the rest at a fraction of the in-house cost.
Wrapping Up
That’s it. In this blog, we have tried our best to convince you that outsourcing your RCM, billing, and credentialing is better for your practice, both in terms of money and efficiency. Based on our experience, research, and data, we suggest you always opt for specialized vendors, rather than handling everything yourself.
The question isn’t whether your practice can afford to outsource—it’s whether you can afford not to make this strategic investment in your future.
The choice between staffing and outsourcing isn’t permanent. You can try to check if outsourcing works for you or not. Usually, the results start to appear within three months. If you are not satisfied within three months, you can always switch back.
