Confusing medical bills and post-COVID financial pressure have made getting paid harder than ever for healthcare practices. We break down how rising costs, staffing shortages, and insurance complexity have turned healthcare billing into a critical business challenge—and why inefficient processes now put both cash flow and patient trust at risk.

We then compare the three main billing models practices rely on today: in-house billing, outsourced medical billing services, and full Revenue Cycle Management (RCM). The takeaway? Each approach serves a different stage of growth, but long-term stability requires moving from reactive billing to proactive, end-to-end revenue management that supports both practice sustainability and a better patient experience.

Transcript

Narrator: 00:00

Welcome to the Billing Blueprint Podcast, your go to resource for innovative medical billing solutions. Each episode we explore the latest industry trends and share proven strategies to help your practice streamline operations and get paid faster. Now here are your hosts, Brad and Sarah.

 Brad: 00:20

 Okay, I want to start with a feeling that I think. Well, I think every single person listening right now has experienced. It's a very specific kind of dread. You go to the doctor, everything seems fine. You pay your $20 copay at the desk, and you leave thinking, great, all done.

Sarah: 00:38

 And then maybe three months later, the envelope shows up.

Brad: 00:41

 The dreaded white envelope? Yeah. You open it, and it's this bill for some totally random amount, like $142.60 for a visit you barely remember.

Sarah: 00:51

 And it's filled with codes that look like, I don't know, safe combinations.

Brad: 00:55

 Exactly. And you have absolutely no idea why you owe this money.

Sarah: 00:58

 It is the universal American healthcare experience. Confusion, frustration, and then just resignation. You pay it to make it go away.

Brad: 01:06

 Right, but today, we're flipping the camera around. We are not looking at that bill as a patient. We're looking at it from the perspective of the person who actually sent it.

Sarah: 01:15

 We're digging into the machinery of how a medical practice gets paid.

Brad: 01:20

 And the source material we're looking at today, it paints a pretty chaotic picture. It starts with this idea of the COVID hangover.

Sarah: 01:28

 Yeah. And we're not talking about, you know, brain fog or fatigue. This is a financial hangover that the whole healthcare industry just can't seem to shake.

Brad: 01:36

 The sources describe this perfect storm. The pandemic hits, elective procedures get canceled.

Sarah: 01:42

 Patients stop coming in for checkups, and.

Brad: 01:44

 The revenue tap just shuts off overnight. But the really fascinating part is that even now, years later, the industry hasn't just snapped back to normal.

Sarah: 01:56

 No, not at all. The landscape has fundamentally changed. Expenses are up, inflation's hitting medical supplies, and the big one, staffing shortages.

Brad: 02:04

 Oh, yeah.

Sarah: 02:04

 It's incredibly hard to find good administrative staff right now. So for a lot of practices, the margins are just rather thin.

Brad: 02:11

 And that really sets the stakes for this dude deep dive. The whole mindset of a medical provider has had to shift. I mean, 10 or 15 years ago, a doctor could run a slightly inefficient.

Sarah: 02:20

 Office, sure, let a few bills slide, have a messy filing system, and still do fine.

Brad: 02:25

 But today, financial stability isn't just a goal. It's survival. If you can't collect the money you're owed, you can't keep the lights on to treat the patients.

Sarah: 02:34

 Which brings us right to the Central tension we're exploring. If you're a doctor, your identity is healer. You want to fix broken bones, you want to listen to hearts, but you're.

Brad: 02:44

 Also a business owner.

Sarah: 02:46

 And the administrative burden of that business, specifically the whole act of getting paid by insurance companies is just massive.

Brad: 02:53

 It's a labyrinth. It's full of traps. So the mission for this deep dive is to answer one question. How does a medical practice actually get paid efficiently without losing its mind?

Sarah: 03:06

 And we have three contenders in the ring today, pulled straight from our research.

Brad: 03:10

 Three different models.

Sarah: 03:10

 That's right. We've got in house billing, which is. Is the whole do it yourself approach.

Brad: 03:14

 Okay.

Sarah: 03:14

 Then we have medical billing services, which are like the hired specialists. And finally, the heavy hitter, Revenue Cycle management, or rcm.

Brad: 03:23

 And I have to admit, when I first saw rcm, I kind of rolled my eyes. I thought, great, another corporate acronym.

Sarah: 03:28

 I get that.

Brad: 03:29

 But as I read through the breakdown, I realized these aren't just, you know, different ways to mail an envelope. These are fundamentally different philosophies on how a business should even run.

Sarah: 03:38

 They absolutely are. It's a choice between control, efficiency, and growth. And depending on where a practice is in its life, the right answer changes completely.

Brad: 03:50

 So let's start with the one that feels the most intuitive. In house billing. This is the model we all probably picture in our heads.

Sarah: 03:58

 It's the traditional model, for sure. You walk into the practice, there's a front desk, and somewhere in the back office, maybe down the hall, pass the exam rooms, there's a person or maybe a small team, and their entire job is to handle the billing.

Brad: 04:11

 I'm picturing a desk just stacked high with manila folders and a very, very stressed out person named Karen.

Sarah: 04:18

 That is often exactly what it looks like. And the source material highlights that the biggest pro here is proximity. It's all about communication, right? If the doctor finishes a complex procedure and isn't sure how to document it, they can literally just walk down the hall and ask.

Brad: 04:31

 You can just shout, hey, Karen, did I code that checkup right? Or why did Blue Cross deny Mrs. Robinson's claim?

Sarah: 04:36

 Again, precisely. You have a dedicated resource. They're not juggling 50 other clients. They are focused 100% on your practice. They know your patients by name. They know that Mrs. Jones always forgets her updated insurance card or that Mr. Smith just changed jobs. There's a loyalty factor there that's pretty hard to quantify.

Brad: 04:58

 It sounds cozy. It sounds safe. You can see the person handling your money. So why isn't everyone doing it? Because the sources take a pretty sharp.

Sarah: 05:06

 Turn into the cons list and it gets expensive fast.

Brad: 05:09

 The hidden costs, that's it.

Sarah: 05:11

 We tend to think of an employee's cost as just their salary. You think, okay, I pay this biller $50,000 a year, so that's the cost.

Brad: 05:18

 But if you've ever run a business, you know that is not the math.

Sarah: 05:21

 Not even close. The material we looked at points out you have to factor in benefits, pay payroll taxes, paid time offs, sick days, and then the overhead, the space they take up, the computer, the software licenses.

Brad: 05:31

 And then there's the vulnerability factor. This part really stuck out to me. The source calls it turnover risk, but I like to call it the bus factor.

Sarah: 05:39

 Or let's be optimistic, the winning the lottery factor. In a small practice, you often have one key biller. That person holds the entire financial knowledge of the practice right in their head. They know the passwords, the weird rules for the local payer.

Brad: 05:54

 So if they quit or get sick or just decide to retire to Florida, the entire cash flow mechanism just walks out the door with them.

Sarah: 06:02

 It doesn't just stop. You can get paralyzed. And here's what people miss. Finding a replacement isn't like hiring a barista. Medical billing is a highly technical skill.

Brad: 06:11

 You need to know all those codes, right? The ICD10 codes, CPT codes, all of them.

Sarah: 06:15

 And let's pause on that. ICD10. We see that acronym, but what does it really mean? We are talking about thousands of specific codes for everything, literally everything. There is a specific code for struck by a turtle. There's a code for burn due to water skis on fire.

Brad: 06:31

 Wait, are you serious? Struck by a turtle?

Sarah: 06:33

 I am completely serious. And if your new hire doesn't know the difference between the code for a routine checkup and a complex consult, or if they accidentally use the turtle code, you're either losing money or you're going to get audited.

Brad: 06:45

 That's wild. So while you're scrambling to hire and train someone new, which the source says is incredibly time intensive, claims just aren't going out.

Sarah: 06:55

 And claims that don't go out, don't get paid. That's the bottleneck risk. An in house team has a ceiling. Let's say you have a great month, flu season hits, you bring on a.

Brad: 07:05

 New partner, patient volume spikes, sounds like good news.

Sarah: 07:02

 Let's say you have a great month, flu season hits, you bring on a new partner

Brad: 07:05

Patient volume spikes, sounds like good news.

Sarah: 07:09

 More patience, more money. In theory. But if your in house biller is already maxed out, their efficiency plummets. They can't physically type any faster.

Brad: 07:17

 So claims get backed up.

Sarah: 07:19

 They get backed up, they start Making mistakes because they're rushing. And suddenly patient satisfaction takes a hit because their bills are all messed up.

Brad: 07:25

 So the quality of care might be amazing, but the business experience for the patient just crumbles because the back office is drowning.

Sarah: 07:32

 Exactly. It puts a hard ceiling on how fast you can grow.

Brad: 07:35

 Okay, so that's in house. High control, but high overhead and wow, high risk. Let's move to contender number two, Medical billing services.

Sarah: 07:45

 The specialists think of this as outsourcing, the grunt work. These are third party companies where their entire reason for being is to process, submit, and follow up on health insurance.

Brad: 07:57

 Claims and bill the patient for whatever is left over.

Sarah: 08:00

 Right. But here is where we need to make a really, really important distinction. The source material highlights this aha moment that I think a lot of people miss. Okay, the difference between medical billing and medical coding.

Brad: 08:12

 I will be honest. Before reading this, I thought those were synonyms. I just thought they were interchangeable words for getting the money.

Sarah: 08:18

 Most people do, but they are completely different skills. Think of it like, like the difference between writing a book and printing a book.

Brad: 08:25

 Okay, I like that. Break it down.

Sarah: 08:26

 For me, medical coding is the translation work. It's taking the medical reality. I fixed a fractured tibia or I diagnosed a sinus infection and translating it into that alphanumeric code we talked about, the turtle code. Turtle code. It requires clinical knowledge. You have to read the doctor's notes and understand what actually happened.

Brad: 08:45

 So turning I fixed your leg into code 1, 2, 3, 4, 5.

Sarah: 08:49

 Exactly. That's coding. Medical billing is the actual processing and submission of that claim to the insurance company. It's the financial transaction. It's the logistics part.

Brad: 08:59

 And the source says that a lot of these billing services, they expect the practice to handle the coding internally.

Sarah: 09:07

 That's the catch. You can't just dump a stack of patient files on their desk and say, go figure it out. Often they say, you send us the codes and we'll go get the money.

Brad: 09:15

 So if you're a doctor thinking, great, I'll fire my back office and hire this service, you might be in for a surprise. You still need someone in house to do that translation work.

Sarah: 09:24

 Or find a service that does both, which, you're right, is going to cost more. But assuming you have the coding figured out, the value of a billing service is pretty strong. It's all about economies of scale.

Brad: 09:35

 Because they do this all day, every day, Right?

Sarah: 09:37

 A good billing service has 50 employees. They have a Blue Cross expert and a Medicare expert. They know the specific quirky rules of all the different payers Things that a.

Brad: 09:48

 Generalist in your own office might just miss.

Sarah: 09:51

 For sure. Because of that expertise, they reduce submission errors and they act as a cleanup crew.

Brad: 09:58

 I liked that term in the Source, because if I'm an in house biller and I'm totally swamped and a $50 claim gets denied, I might just let it go.

Sarah: 10:07

 Of course, it's not worth your time to sit on hold for an hour.

Brad: 10:10

 To fix it, but for that.

Sarah: 10:11

 That is their entire job. They have the bandwidth to chase every single dollar. So you generally see a reduction in administrative burden and an increase in collections.

Brad: 10:20

 Okay, so in house is control, billing services. That's efficiency for specific tasks. But then we get to the third one, and this is the one that sounds like it came out of a corporate strategy meeting. Revenue Cycle management. Rcm.

Sarah: 10:32

 Rcm. This is the holistic approach.

Brad: 10:34

 The source calls it a broader method. It's not just billing. It covers billing, collections, and payouts. But what does that actually look like? How is that different from just a billing service?

Sarah: 10:45

 Plus, I think the biggest difference is the timeline. Think about when billing usually starts.

Brad: 10:51

 It starts after the patient leaves the office, right? Patient leaves doctor writes notes, bill gets sent. It's reactive.

Sarah: 10:58

 RCM shifts that timeline all the way back to the very beginning. It starts when the patient picks up the phone to request a time slot.

Brad: 11:05

 Whoa. So before they even walk in the.

Sarah: 11:07

 Door, before they even park their car. It involves what's called the pre registration phase. Contacting the insurance company to check eligibility, retrieving coverage info, verifying all the data before the visit ever happens.

Brad: 11:20

 Walk me through why that matters so much. Why do I need to worry about the bill before I've even seen the doctor?

Sarah: 11:25

 Okay, imagine this. You call to book an appointment. An RCM system automatically triggers a verification check. It pings your insurance company, and it sees that your coverage has lapsed.

Brad: 11:36

 Or that I have a $5,000 deductible I haven't met.

Sarah: 11:38

 Exactly. So the practice knows immediately that they're not going to get paid by the insurance company.

Brad: 11:43

 And they can tell me immediately, hey, just so you know, the. This visit will probably be out of pocket, right?

Sarah: 11:48

 And that saves you the surprise heart attack three months later?

Brad: 11:51

 It does.

Sarah: 11:51

 It saves the patient the shock. But for the practice, it ensures data integrity. The source emphasizes this a lot. Most claim denials aren't because the medical care was wrong. They're because of simple data errors.

Brad: 12:05

 Wrong member id, name spelled wrong, that kind of thing.

Sarah: 12:08

 Exactly. So RCM is all about preventing the error before it can ever enter the system, it's proactive versus reactive. You're not fixing a flat tire. You're checking the air pressure before you leave the driveway.

Brad: 12:21

 There's another layer to RCM that I found fascinating. The trend spotting. This moves beyond just getting paid and into, like, business intelligence.

Sarah: 12:30

 This is huge for doctors. I mean, remember, most physicians went to medical school, not business school. They know how to treat patients, but they might not know which procedures are actually profitable.

Brad: 12:38

 So an RCM system can look at all the data and say, hey, every time you do this specific type of ankle wrap, you lose money.

Sarah: 12:45

 That's it. You're spending 50 bucks on materials and labor, and the insurance reimbursement is only 30. You need to stop doing it or you need to renegotiate your rates.

Brad: 12:54

 A simple billing service wouldn't tell you that.

Sarah: 12:56

 No, they just process the claim. RCM analyzes the financial health of the business. It gives you this end to end view. It tells you where your money's getting stuck. Your accounts receivable, your AR.

Brad: 13:07

 That's basically the pile of IOUs sitting on your desk.

Sarah: 13:10

 And in healthcare, AR is the enemy. The longer a bill sits unpaid, the less likely it is to ever get paid. RCM is aggressive about keeping that AR pile as small as possible.

Brad: 13:21

 Okay, so let's recap our three players we've got in house. The mom and pop. Feel high control, but super risky if Karen quits.

Sarah: 13:28

 Right.

Brad: 13:28

 We have billing services, efficient factory, good for processing specific tasks. And then rcm, the strategic engine. It's data driven, it's proactive.

Sarah: 13:38

 So now comes the hard part, the showdown. How does a practice choose the source.

Brad: 13:43

 Gives us a pretty useful decision matrix. Here it comes down to revenue goals, practice size, patient volume, staff resources.

Sarah: 13:50

 But really, it's about life cycle. Where are you in your journey?

Brad: 13:53

 Okay, let's take scenario A. I'm a brand new doctor. I just rented a small office, I have zero patients, and I'm opening my doors tomorrow.

Sarah: 14:01

 In that case, RCM is probably overkill. You don't need a Ferrari to drive to the grocery store, right? The source suggests that for a startup practice, a simple medical billing service is often totally adequate to carry you through that first year.

Brad: 14:15

 You just need to get the claims out the door. You don't have enough data yet to need trendspotting.

Sarah: 14:20

 Exactly. You're in survival mode. Low volume, low complexity. Your main goal is to keep your overhead as low as possible.

Brad: 14:28

 But then we hit scenario B, the growing practice. You survived year one. You're getting established seeing more patients claim volume is going up.

Sarah: 14:38

 This is the danger zone. This is where a lot of practices get into trouble. You get busy, you hire a second doctor, you add a nurse practitioner, your.

Brad: 14:45

 Volume doubles and the cracks start to show.

Sarah: 14:48

 The in house model breaks. Because of that bottleneck we talked about, the basic billing service might start to fail because you have more complex denials and you're losing track of your ar.

Brad: 14:58

 This is where the source argues RCM becomes not just nice to have, but essential.

Sarah: 15:02

 It's an investment in your ability to scale. If you want to grow, you need that holistic view. You need to know where your money is coming from and where it's getting stuck. RCM is built for those long term needs.

Brad: 15:14

 There was a warning in the material that I thought was really smart. It said something like warning against spending resources inefficiently.

Sarah: 15:21

 Yeah.

Brad: 15:21

 Even if a solution benefits patients, it might be the wrong financial move if the practice size doesn't justify it.

Sarah: 15:28

 And that's the hard truth of running a business. You can have the best RCM system in the world, but if you're a tiny solo practitioner seeing five patients a week, you're just burning money you don't have.

Brad: 15:39

 Efficiency is about matching the solution to the problem you actually have, not the.

Sarah: 15:44

 Problem you wish you had. But on the flip side, if you are in a competitive market, and let's face it, healthcare is competitive, RCM offers a competitive edge.

Brad: 15:54

 Awesome.

Sarah: 15:54

 Because it allows for faster fixes on missing data. If your competitor down the street is taking 60 days to get a claim paid and you're doing it in 20, because of your RCM system, you have.

Brad: 16:05

 Better cash flow, which means you can pay your staff better.

Sarah: 16:08

 You can pay your staff better, which helps with the staffing shortage. You can invest in better equipment, you can renovate the waiting room. It creates a virtuous cycle that really.

Brad: 16:16

 Connects the dots for me. It's not just about the accountant being happy. It's about the whole practice being healthy enough to compete and thrive.

Sarah: 16:25

 And it's about transparency. RCM gives you insight into the condition of your claims. You aren't just guessing about your financial.

Brad: 16:32

 Health, you know, so we've broken down all the mechanics, but I want to circle back to something we touched on at the very beginning. The why. Why should the average listener care about any of this?

Sarah: 16:42

 Well, think about your own experience. Have you ever gone to the doctor, had a great visit, and then three months later you get that confusing bill we talked about?

Brad: 16:49

 Oh, absolutely. That totally ruins the whole experience. I forget that the doctor was nice. I Just remembered that the billing office is a nightmare.

Sarah: 16:57

 Exactly. The source makes a strong point here. A well oiled financial machine means the practice can focus on providing top notch care instead of chasing paperwork.

Brad: 17:09

 When the billing is messy, the patient's stress goes way up.

Sarah: 17:13

 So RCM isn't just about the doctor getting a new boat. It's about the patient not getting a surprise bill they shouldn't have received in the first place. It's about trust.

Brad: 17:22

 That's a great point. We separate the clinical side from the administrative side. But for a patient, it's all one experience.

Sarah: 17:30

 It is. If a practice can't even handle my insurance info correctly, do I really trust them to manage my blood work?

Brad: 17:36

 The administrative competence reflects on the clinical competence.

Sarah: 17:39

 It absolutely does. And for the providers who are listening, the takeaway is clear. You have to ask yourself, is your current system built for where your business is today or where you want it to be next year?

Brad: 17:50

 And that's the final provocative thought I wanted to get to. The source says that medical billing is adequate for the first year, but RCM is for growth.

Sarah: 17:59

 It really challenges you to look at your trajectory. Are you just processing bills that's reactive, that's treading water, or are you managing a cycle that's proactive, that's swimming toward a destination?

Brad: 18:12

 It's the difference between trying not to drown and actually building a boat.

Sarah: 18:15

 And in this post Covid landscape, with all the financial pressure, turning water might not be enough anymore. You need a system that works harder than you do.

Brad: 18:24

 So if you're stuck in that in house mindset, terrified that your one biller is going to quit, or if you're using a basic service but you feel like you have no idea why you're losing money, it might be time to look at the bigger picture.

Sarah: 18:35

 It might be time to look at the whole cycle.

Brad: 18:37

 This has been a really eye opening look at the machinery behind the curtain. It turns out how you get paid is just as complex as how you.

Sarah: 18:46

 Get treated and maybe just as important for the survival of the practice.

Brad: 18:50

 We hope this deep dive helped you make sense of the options. Whether you're running the clinic or just walking into one, knowing how the money moves changes how you see the whole system. Thanks for listening.

Sarah: 19:00

 We'll catch you on the next deep dive.

Narrator: 19:02

Thanks for tuning into the Billing Blueprint podcast. For more insights or to dive deeper dive deeper into today's topics. Head over to billflash.com. Don't forget to subscribe and we'll catch you next week with more strategies to keep your practice running smoothly and getting paid faster

Sources:

Medical Billing Services, RCM Services or In-House Billing: Which is Right for Your Practice?