Practice Revenue Assessment: What Is Your Current Billing Operation Really Costing?

Discover how a practice revenue assessment can uncover hidden billing costs, revenue cycle gaps, workflow inefficiencies, aging insurance A/R, and opportunities to improve financial performance.

Oswego Medical Billing Solutions

5 min read

What Is Your Current Billing Operation Really Costing Your Practice?

Most healthcare practices know how much they pay billing employees and software vendors.

Fewer understand the complete cost of operating and overseeing the billing function.

The total cost may include:

Salaries and hourly wages
Employee benefits and payroll taxes
Recruiting and training
Paid leave and temporary coverage
Billing software and clearinghouse fees
Management oversight
Insurance follow-up
Workflow interruptions
Billing staff turnover
Delayed or unresolved revenue

These costs may appear across different budgets, contracts, and financial reports, making them difficult to evaluate together.

The purpose of reviewing billing costs is not to assume that internal billing is ineffective. The purpose is to understand whether the current billing structure provides the consistency, capacity, and financial visibility the practice needs.

Payroll Does Not Tell the Entire Story

Payroll is usually the most visible cost associated with internal billing.

However, maintaining an internal billing operation may also require:

Employee benefits
Payroll taxes
Paid time off
Recruitment expenses
Training and continuing education
Overtime or temporary coverage
Management and supervisory time

These expenses can increase the actual cost of billing beyond the amount shown on the payroll report.

Practice leaders should consider both direct staffing expenses and the operational resources required to support the billing team.

Software and Technology Add Another Layer

Billing operations depend on technology as well as staff.

Healthcare practices may pay for:

Practice-management software
Electronic health record integrations
Claims-submission tools
Clearinghouse services
Reporting platforms
Payment-processing technology
Technical support
System maintenance

Some expenses may be easy to identify. Others may be included in transaction fees, bundled contracts, or separate subscriptions.

A complete billing-cost analysis should account for both staffing and technology because the two work together to support claims, payments, follow-up, and reporting.

Management Time Has Financial Value

Leadership time is one of the most frequently overlooked billing costs.

Practice owners, managers, and administrators may spend significant time addressing:

Billing staff questions
Training and workflow support
Hiring and coverage concerns
Unresolved claims
Reporting problems
Payer issues
Collection concerns
Billing-system interruptions

That time might otherwise be directed toward patient access, staff development, financial planning, or practice growth.

Management time may not appear as a separate billing expense, but it still has operational and financial value.

Turnover Can Disrupt Billing Performance

When an experienced billing employee leaves, the practice may lose more than a staff member.

The transition may affect:

Claim submission
Payment posting
Rejection correction
Denial follow-up
Payer communication
Financial reporting
Aging insurance A/R

Remaining employees may absorb additional responsibilities while leadership recruits and trains a replacement.

Turnover can therefore create costs involving recruitment, training, management time, lost productivity, workflow interruption, and delayed reimbursement.

The practice should be able to determine whether essential billing work can continue consistently during staffing changes.

The financial impact of staffing changes may extend beyond recruitment and training. A billing vacancy can also interrupt claim submission, insurance follow-up, payment posting, and financial reporting.

Related reading: Billing Staff Turnover Costs for Medical Practices.

Billing Inefficiencies Are Not Always Obvious

A billing department can remain busy while important problems continue developing.

Claims may be submitted, payments may arrive, and reports may still be produced. However, practice leaders may not immediately see:

Claims requiring additional follow-up
Rejections that remain unresolved
Denials without a documented next action
Payment-posting backlogs
Outstanding balances moving into older aging categories
Differences between billed and collected revenue
Repeated payer delays

Strong patient volume does not automatically mean the billing operation is performing effectively.

Practice leaders need enough visibility to understand what has been collected, what remains outstanding, and where reimbursement may be delayed.

Financial Visibility in Healthcare: Can a Practice Grow Without Understanding Financial Performance?

Aging Insurance A/R Can Reveal the Cost of Delayed Follow-Up

Outstanding insurance claims can quietly affect cash flow as balances move into older aging categories.

One unresolved claim may appear manageable. A growing number of unresolved claims can create a larger financial and administrative problem.

Practice leaders should understand:

How much insurance A/R remains outstanding
Which aging categories contain the largest balances
Which claims require immediate follow-up
Which denial reasons appear repeatedly
Whether every unresolved claim has a documented next action
Whether collections are keeping pace with practice activity

Older balances may require additional research, documentation, payer communication, or corrective action.

More Staff Is Not Always the Only Solution

When billing workloads increase, hiring another employee may appear to be the most direct solution.

Additional staffing may be appropriate in some situations. However, practice leaders should first evaluate:

Current workflow efficiency
Division of billing responsibilities
Claim follow-up consistency
Software utilization
Reporting processes
Current staffing costs
Billing capacity
Revenue-cycle performance

Adding staff without identifying the underlying problem may increase overhead without resolving workflow or performance gaps.

A closer evaluation can help the practice determine whether the best next step is additional staff, clearer processes, more effective technology, outside billing support, or a combination of solutions.

Compare Internal and Outsourced Billing Carefully

The decision between internal and outsourced billing should not be based only on salaries or percentage fees.

A balanced comparison should consider the full cost and operational impact of each model.

Internal billing considerations

Payroll and employee benefits
Payroll taxes
Recruitment and training
Paid leave and coverage
Software and technology
Management oversight
Workspace and equipment
Turnover and workflow disruption

Outsourced billing considerations

Agreed service fee
Services included
Implementation requirements
Communication processes
Reporting capabilities
Practice responsibilities
Technology requirements
Billing continuity

The appropriate structure depends on the practice’s workload, staff capacity, payer mix, reporting needs, and growth plans.

Outsourcing is not automatically the right answer for every practice. The goal is to determine which structure can support consistent billing performance without creating unnecessary cost or administrative burden.

Financial Visibility Supports Better Decisions

Practice leaders should be able to answer important questions about the billing operation:

What is the total monthly cost of billing?
How much leadership time is spent overseeing billing?
Are claims being submitted consistently?
Are rejections and denials receiving timely follow-up?
Is payment posting current?
How much revenue remains in aging insurance A/R?
Which payers are creating repeated delays?
Are collections keeping pace with practice activity?
Can existing workflows support future growth?

When these answers are unclear, decisions about staffing, technology, outsourcing, and practice growth become more difficult.

Financial visibility helps practice leaders understand where resources are being used and whether those resources are producing the expected results.

What a Practice Revenue Assessment Can Reveal

A Complimentary Practice Revenue Assessment can help organize the factors affecting billing costs and performance.

The assessment may review:

Billing costs

Staffing and payroll expenses
Employee benefits and taxes
Software and technology costs
Management oversight
Training and coverage expenses
Billing-related administrative workload

Revenue-cycle performance

Cash flow and collections
Claims and denial follow-up
Payment-posting workflows
Aging insurance A/R
Payer delays
Financial reporting and visibility

Operational opportunities

Workflows requiring attention
Responsibilities consuming staff time
Areas where ownership may be unclear
Billing-capacity concerns
Processes that may not support future growth

The goal is not to predetermine whether the practice should keep billing internally or use outside support.

The goal is to provide enough information for practice leaders to make a more informed decision.

Is Your Current Billing Operation Supporting Your Practice?

A billing operation should do more than process claims.

It should support:

Consistent claim submission
Timely rejection and denial follow-up
Accurate payment posting
Insurance A/R oversight
Meaningful financial reporting
Manageable administrative costs
Billing continuity
Practice growth

Healthcare practices throughout Portland, Oregon, and across the United States may benefit from evaluating whether the current billing structure provides the consistency, capacity, and financial visibility needed to support the practice.

Questions worth considering include:

What is the complete cost of the billing operation?
Are claims and outstanding balances receiving consistent follow-up?
Is aging insurance A/R affecting cash flow?
Are billing responsibilities consuming too much leadership time?
Do current reports clearly explain billing performance?
Can the existing billing structure support additional providers or services?

A Complimentary Practice Revenue Assessment can help identify opportunities involving:

Billing costs and workflows
Cash flow and collections
Claims and denial follow-up
Aging insurance A/R
Financial visibility
Administrative efficiency

Request Your Complimentary Practice Revenue Assessment

Oswego Medical Billing Solutions

Providing medical billing, provider credentialing, insurance A/R recovery, and revenue-cycle support for healthcare practices throughout Oregon and across the United States.

PORTLAND, OR 97219

Phone: (503) 345-4987
Fax: (503) 345-4998