Comparing Your Billing Options: Seven Questions Worth Asking

A practical way for small and mid-size practices to review their current billing structure alongside an outside billing company.

When your practice reviews its billing structure, cost is of course a major consideration, but it should not be the only one. A vendor quote and a payroll line are both easy numbers to find. The parts that shape the year ahead take a little more digging: what your team can see while claims are moving, which decisions stay at the practice, and what the reports tell you when the quarter closes.

Seven questions to consider

Below are the seven questions you can ask of your current medical billing operation and of any outside company you are considering. Same questions, both sides.

After that, five areas worth revisiting in a little more detail, with the reasons each one tends to matter.

If some of these questions cannot be answered right now, that is useful to know early. The practice may want to gather a little more information before deciding.

1. It is important to look at the full cost of each option

An in-house billing budget is rarely one number. Salary is the visible part. Underneath it sit payroll taxes, benefits, billing software licenses, clearinghouse fees per claim, continuing education, coverage during a vacancy, and the administrator time spent supervising the function.

MGMA benchmark data indicates support staff salaries and benefits together typically account for roughly 25 percent of total practice revenue, about half of total overhead. Billing is one slice of that, and the slice is easy to underestimate when only base pay is counted.

On the outside company side, published pricing surveys for 2026 put percentage-of-collections billing fees in a range of roughly 4 to 10 percent of collected revenue, with specialty and claim complexity driving the spread. One feature of a percentage model is worth mentioning: billing costs rise as collections rise. That can be perfectly reasonable when it reflects real added work. It is still worth modeling out three years, especially for a practice that is growing or adding providers.

Using the same cost categories for both options can make the comparison clearer. If the in-house side includes benefits and software, the outside side should be expressed the same way, as a percentage of net collections at today’s volume and at 120 percent of today’s volume.

2. Can the practice get the information it needs?

The most common reason practices keep medical billing in-house is that you can walk down the hall and ask. That is a real advantage. The follow-up question is whether the answer comes back in a form the practice can act on.

Here is a simple way to find out. Tell the team: “I want to try a little test. Let’s see how fast we can pull the first-pass denial rate for the last 90 days, broken out by payer and by denial reason.” Then note how long it takes and what shape the answer arrives in.

If it comes back in a day with clean categories, that is a real strength and worth protecting. If it takes two weeks and arrives as a claim-level export nobody has time to sort, that is worth knowing too. Moving the work would not create that situation, and keeping it in-house would not resolve it on its own.

The numbers behind this are not abstract. MGMA benchmarking has shown a single-specialty aggregate first-pass denial rate around 8 percent, and Experian Health reported in September 2025 that 41 percent of surveyed providers face denial rates of 10 percent or higher, a figure that has climbed each year since 2022. A practice that cannot see its own denial pattern by payer has a harder time knowing whether it sits at 4 percent or 14 percent, and the difference between those two is a meaningful share of annual revenue.

3. Which decisions stay with the practice?

This is often framed as control versus convenience. In day-to-day terms, it comes down to something more specific: which decisions remain with the practice, and which daily medical billing responsibilities the outside company would handle.

In most well-structured arrangements, the practice keeps the fee schedule, coding and documentation decisions, write-off thresholds, patient collection policy, refund approvals, and the escalation path when an account stalls. The outside company handles the execution work: claim submission, follow-up, denial rework, appeal preparation, payment posting, and reconciliation.

Before the practice makes a decision, it may want those responsibilities clearly put in writing. Asking for that list before pricing comes up usually makes the rest of the conversation easier.

4. What happens when someone is absent, on vacation, or leaves?

This has nothing to do with the quality of a billing team. Strong billers are the reason many practices are financially stable. The question is what the operation looks like on a day when one isn’t there.

The hiring picture is part of it. In MGMA polling, medical coders and billers ranked as the two hardest revenue cycle roles to fill, and 53 percent of medical group leaders cited finding candidates as their top staffing challenge. Experian Health found 43 percent of surveyed provider organizations describe themselves as understaffed. Experienced billing professionals also have remote options at insurers, health systems, and medical billing companies, often at pay a practice cannot match.

So the practical question is concrete. If one person holds the payer-specific knowledge, the appeal templates, and the portal logins, a six-week vacancy does more than pause the work. It ages the A/R, and older A/R collects at a lower rate.

This is also where the whole decision often shifts shape. For many practices, the question is not whether to replace the team. It is whether to add capacity behind the team, so coverage, backlog, and denial rework do not depend on one person being at their desk.

5. Can we get clear, usable reports?

Each of the areas above comes back to the same thing. Clear reports that show how the current structure is performing make it possible to tell whether a change helped.

Commonly cited MGMA reference points include a net collection rate near 96 percent, A/R over 90 days in the 12 to 15 percent range, and days in A/R under 45. Treat those as directional and confirm current figures for your specialty in MGMA DataDive before setting internal targets.

One suggestion here: whatever reporting the practice would ask an outside company to provide, ask for the same from the in-house operation. Holding both sides equally accountable is what makes the two sets of answers comparable.

The option that often gets left out

The choice is usually presented as all in-house or all outsourced. For many small and mid-size medical practices, a split is more practical. The billing manager and the institutional knowledge stay in-house, and the volume-driven work moves outside: claim follow-up, denial rework, posting, and reconciliation.

That keeps the relationships and judgment your team has built while relieving the queues that grow faster than headcount. It also makes results easier to read, because the scope is narrow enough to see what changed.

Conclusion

A reasonable conclusion, if several of the seven questions come back unanswered, is that the practice may want to gather a little more information before deciding. That is a productive place to land, and a better starting point than a choice made on fee percentage alone.

DataMatrix Medical has supported medical practice billing and revenue cycle work for more than 25 years across 300 practices and 40+ specialties. We are EHR-agnostic; we price medical billing as a fixed monthly fee based on practice annual revenue rather than a percentage of what you collect, and we do not require long-term contracts. If you need a comparison first, we are comfortable starting there. Want more medical billing tips and tricks? Read our other how to improve medical billing processes.

References

MGMA benchmarking data on support staff cost as a share of practice revenue and overhead.

MGMA Stat polling on revenue cycle staffing difficulty and hiring challenges.

Experian Health, State of Claims 2025, denial rates and staffing findings, September 2025.

Published 2026 medical billing pricing surveys for percentage-of-collections fee ranges.