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What Are Medical Billing Services? Why Outsource Medical Billing?

Posted by 99 MGMT on


Busy medical practices have to balance a high level of patient care with completing necessary administrative tasks to keep the doors open.

Medical billing can take up a lot of valuable time. It can also be difficult to find and train people to handle this crucial task. Plus, if claims are processed slowly or incorrectly, they can negatively impact your practice's revenue. This is why many practices turn to third-party medical billing companies for claims management.

What are medical billing services?

Independent medical billing services are used to process, submit, and follow up on health insurance claims in order to optimize your healthcare practice management process.

These companies employ specially trained staff who are knowledgeable about individual payers, and can work within each company’s specific policies to extract a higher level of payment in a shorter amount of time.

Your medical billing company can also follow up on rejected claims and pursue delinquent accounts.

Practice Analysis

Medical billing vs. medical coding services

Medical billing is a different service from medical coding. Coding means assigning standard codes to individual services in preparation for submitting claims. Medical billing is the actual processing, submitting and following-up of claims.

Some medical billing companies may offer both services, but many require you to do your own coding.

At 99MGMT, we have certified coders in place to assist with coding questions and claim appeals in billing, who can also perform medical coding for your practice. We offer practice management consulting on these processes, as well as credentialing.


Why do medical practices outsource medical billing services?

The benefits of working with medical billing outsourcing companies include:

  • Improved workflow for the practices' office staff
  • Alleviating confusion dealing with each payer’s specific payment policies
  • Reduction in submission errors
  • Faster claims processing
  • Improved Healthcare Revenue Cycle Management
  • Access to trained industry specialists
  • Reduced per-patient costs
  • Improved profitability
  • Increased patient satisfaction as claims are processed timely

Most importantly, using third party medical billing companies can reduce overall stress levels for practices in relation to billings complications.

At 99MGMT specifically, our clients see the following benefits:

  • Client receivables that are typically under 30 days outstanding.
  • Aged balances over 90 days that are generally less than 10%.
  • Bad debt percentages that are among the lowest in the industry.

We also update providers with information on national, state, and local fee trends so you can make timely fee adjustments to keep your practice in line with others.


How much do medical billing services cost?

Costs for medical billing services may be based on the number of claims submitted, a setup fee, a collection percentage, and/or a monthly service fee. Costs vary greatly between companies.

Contact your potential service provider to learn more about their individual pricing model.

The best option for you may depend on the size of your business. If you’re a small practice with fewer claims to process, cost per claim may be most affordable. However, many practices prefer the collection percentage model where in order for the medical billing company to get paid, your practice must get paid first.

Have questions about our medical billing services? Contact us here!

99 Healthcare Management helps physicians start and manage their own private practices independently. Our services include physician credentialing, medical billing, compliance and liability, operations management, medical practice marketing, financial services and more.

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Related articles:

Average Medical Practice Overhead

4 Basic Ways to Improve Medical Practice Efficiency


(Editor's note: This blog was originally published in October 2018 and was updated in February 2024 to reflect the most current information.)

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