Today, many independent physician practices are choosing to outsource billing and coding rather than manage them in house. For most, it’s a difficult decision that affects all areas of the practice. But in the end, the complex nature of the regulatory environment and concerns over whether every dollar that can be collected is being collected are compelling enough reasons to make the switch.

Is outsourcing a direction your physician practice should consider? The following are five signs it might be.

1. Revenues are shrinking

There are many reasons why practices might begin to see a shortfall in collections—everything from reduced reimbursements from payers to billing or coding inefficiencies. Often, it’s a combination of many factors, and getting to root causes requires a detailed analysis of the practice’s financial and operational areas. An outside resource with expertise in physician revenue cycle management can help to identify the issues and propose solutions.

2. You need better insight into your practice’s performance

Do you have immediate access to the financial performance of your practice? Or does it take a few days – or weeks – to compile reports and assess the results? Having access to practice data on a real-time basis allows you to quickly identify AR issues, but if your internal billing system isn't delivering this level of insight, you may be missing valuable information.

3. Compliance and regulatory issues are too complex to manage without help

Did you hear that 5,500 new ICD-10 codes are coming this year? In addition to the new ICD-10 codes, you’re facing a much more rigorous enforcement climate that requires a robust policy and procedures program to help limit your practice’s exposure. Clearly, compliance and regulatory issues will continue to grow more complicated and will require a level of expertise that many practices don’t have in house.

4. Managing staff is increasingly time-consuming and expensive

The “summer slowdown” shouldn't apply to your billing, but many practices experience a dip in revenue when key billing and coding staff members are out of the office. Finding coverage for vacations, sick days and other leaves of absence has always been a difficult, but the increased complexity of billing and coding makes finding skilled resources for short-term engagements almost impossible. But beyond the day-to-day staffing headaches, the rising cost of employee health care and benefits is one of the biggest challenges facing employers of all sizes. Unfortunately, there are few easy answers, as health care organizations look to optimize staffing models without sacrificing clinical quality or operating efficiency.

5. You need more time to focus on non-administrative aspects of your practice

Managing the administrative details of your practice can become all-consuming, but in today’s competitive environment, practice leaders must focus on their relationships—both patients and business stakeholders. If you find you don’t have enough time to see patients or manage relationships with your hospitals and partners, you should find ways to rebalance your workload.

If one or more of these issues resonate, it’s worth learning more about making the transition. While in the short-term there may be hurdles to overcome, the long-term efficiency gains and revenue optimization may make it worthwhile over the long run.

McKesson Business Performance Services can help your practice efficiently manage your revenue cycle and improve overall financial performance—providing as much or as little support as you need. An industry leader in physician revenue cycle management, we bill for more than 30,000 providers annually across multiple specialties, and can help you gain the results you need to support your long-term revenue goals.

For more information about our services, contact us online or email us at You can also speak directly with a representative by calling 800-234-4550.


About the author

McKesson Business Performance Services offers services and consulting to help hospitals, health systems, and physician practices improve business performance, boost margins and transition successfully to value-based care.