At the same time, outsourcing isn’t an automatic yes for every ASC. You might hesitate over concerns about cost, loss of control, or the quality of service. But the industry is shifting — fast. Surveys show that 36% of medical providers will outsource RCM and medical billing in 2025 to improve cash flow, boost savings, and reduce administrative stress.
If you’re weighing your options and want a clear, honest breakdown of in-house vs. outsourced billing, this guide is for you. We’ll walk through the key considerations so your ASC can make the best decision for long-term financial health and efficiency.
Understanding the Models
Healthcare organizations, including ASCs, can manage revenue cycles in three ways: in-house, outsourced, or hybrid. Each model has its pros and cons for your operations, costs, and efficiency.
In-House RCM
Keeping RCM in-house means handling all billing, coding, claims processing, and collections with your internal team. This approach gives healthcare organizations full oversight of workflows, compliance, and patient billing.
How It Works
An in-house billing team is responsible for every revenue cycle stage, from patient registration to payment reconciliation. Success depends on hiring skilled billing professionals, regulation compliance, and investing in the right technology to automate processes and minimize errors.
Effective in-house RCM operations typically rely on:
- Billing staff for coding and claims.
- EHR and PM software for streamlined workflows.
- Compliance teams to monitor regulations.
- Denial management specialists to resubmit denied claims.
- Patient billing teams to handle payments.
- Revenue analysts to track financial performance.
While this model offers full oversight, it carries high costs and requires ongoing compliance updates.
Pros of In-House RCM
- Control over workflows and data.
- Customization for payer mix and specialties.
- Proximity to billing staff for faster issue resolution.
- Data security by keeping patient information in-house.
- Flexibility to implement changes quickly.
Cons of In-House RCM
- High costs for salaries, benefits, software, training, and turnover.
- Compliance risks with 90% of practices non-compliant with changing regulations, payer requirements, Medicare updates, and a high likelihood of employee-caused patient data breaches.
- Scalability challenges with fluctuating patient volume.
- Limited staffing and resources can lead to burnout, inefficiencies, and low adaptability.
- Hiring difficulties, with 34% of medical groups saying medical coders are the hardest roles to fill.
Outsourced RCM
Outsourcing your RCM means partnering with a third-party vendor to handle all or parts of your revenue cycle. These vendors bring specialized expertise, advanced technology, and dedicated teams to streamline operations, reduce errors, and improve cash flow.
How It Works
RCM vendors handle claim submissions, denial management, and patient billing while integrating with your ASC’s existing systems. They aim to optimize revenue capture while allowing staff to focus on patients. Different RCM vendors provide specialized services. Vendor types include:
- Medical billing companies for claims and revenue tracking.
- Clearinghouses to ensure clean claims.
- Bad debt agencies for collections.
- Business intelligence vendors for financial insights.
- Patient payment platforms for seamless transactions.
Pros of Outsourced RCM
- Cost savings and stability by replacing overhead expenses with fixed or percentage-based fees.
- Access to expertise from certified specialists to reduce billing errors by 50%.
- Advanced technology like AI-driven claim scrubbers.
- More time for patient care by offloading administrative tasks, with 82% of providers having more satisfied patients after the fact.
- Scalability to adjust to fluctuating demand.
- Expert oversight to reduce denials and accelerate reimbursement.
- Better transparency with real-time analytics.
Cons of Outsourced RCM
- Dependency on vendor responsiveness.
- Variable costs, depending on vendor pricing models.
- Potential hidden fees for add-on services.
- One-size-fits-all if a vendor doesn’t have experience in tailoring solutions.
- Quality concerns if vendor lacks ASC expertise.
- Communication concerns without on-site billing.
- Transitional delays when switching systems.
Hybrid Model
A hybrid RCM model combines in-house resources with outsourced expertise so healthcare organizations can oversee key financial operations, reduce costs, and optimize efficiency without fully committing to an in-house or outsourced model.
How It Works
In a hybrid RCM model, organizations strategically divide responsibilities among their internal team and external vendors.
Common hybrid RCM setups include outsourcing:
- Denial management while keeping in-house billing.
- Claim submission while handling internal coding.
- Patient collections while managing primary billing.
- Technology enhancements like AI-driven analytics.
This model allows organizations to customize their RCM strategy and balance costs, efficiency, and control.
While outsourcing can reduce operational burdens and improve cash flow, understanding the true financial impact is key to making the right decision about your billing.
Outsourced Billing Cost Models Explained
Outsourced medical billing typically follows one of two pricing models: flat-fee or percentage-based. Flat-fee pricing tends to be more straightforward, but it’s also riskier if your claim volume fluctuates or higher-value claims need additional oversight.
- Percentage of collections: The billing company takes a percentage of the total revenue collected to align their success with yours and incentivize maximum collections.
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- Example: If your ASC collects $500,000 per month with a 7% billing fee, you’d pay $35,000 in outsourcing fees.
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- Flat fee per claim: The company charges a fixed amount per processed claim, regardless of value. This can be costly for higher-value claims, such as those common in ASCs.
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- Example: If you instead submit 3,000 claims per month at a $7 per claim rate, your total cost would be $21,000, saving you $14,000 per month.
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In-House vs. Outsourced Cost Comparison
Many ASCs still handle billing in-house, but an increasing number are switching to outsourcing for efficiency and stronger revenue performance. Below is a side-by-side comparison illustrating why the medical industry is trending this way and why outsourcing might make the most financial sense for your ASC:
| Cost Factor | In-House RCM | Outsourced RCM |
| Direct Costs | 7% to 10% of ASC total revenue (average)
Salaries, benefits, software, operational costs, etc. |
4% to 10% of ASC total revenue (average)
Billing and service fees, technology access, etc. |
| Cost to Collect a Dollar | 13.7% | 5.4% |
| First Submission Payment Rate | 68% | 80% |
| Payment Rate Within 30 Days | 72% | 88% |
| Average Collection Rate | 70% | 95%+ (most practices see 5% to 10% increase in net collections outsourcing billing) |
Keep in mind that both in-house and outsourced RCM services have hidden costs, like recruitment, training, compliance, and staff turnover for in-house teams and transitional expenses for outsourcing partnerships.
Is In-House or Outsourced RCM Right for You? 6 Questions to Ask Yourself
While cost is a major factor in the in-house vs. outsourced RCM debate, it’s only one piece of the puzzle. The right choice also depends on a variety of operational, strategic, and financial considerations.
Before making a decision, take a moment to think about your ASC’s specific needs. We’ve outlined a list of questions below to help you determine whether in-house billing or outsourcing is the best fit for your ASC.
- How large is your ASC, and how complex are your billing needs?
Smaller ASCs may find in-house billing manageable, especially if claim volume is low and the procedures performed are relatively straightforward. However, larger ASCs with multiple providers, high patient volumes, and complex payer contracts may benefit from outsourcing to handle the increased workload, reduce administrative strain, and ensure optimized revenue capture. - Do you have staff trained and certified in ASC-specific coding (e.g., CPT 15876 vs. 15879, CMS-1500 forms)?
ASC billing requires specialized knowledge of CPT codes, payer requirements, and compliance regulations. Errors in coding can lead to denials and lost revenue. Without this expertise in-house, outsourcing to a company with ASC billing specialists may improve claim accuracy and reimbursement rates. - How quickly do you need to scale operations?
If your ASC is growing or adding new specialties, in-house billing may struggle to keep up with increasing complexity. Outsourcing provides flexible access to a larger, more experienced team that can quickly scale with your needs without requiring additional hiring or training. Consider the cost of scaling, potential revenue leakage, physician and patient satisfaction, and governance requirements when making your decision. - Can you absorb upfront costs for technology and staffing?
In-house billing requires upfront investments in advanced software, EHR integration, staff training, and ongoing compliance updates. If absorbing these costs isn’t feasible or you aren’t prepared for such an investment, an outsourced provider with cutting-edge technology already in place may be a better option. - What denial rate would justify outsourcing?
If your denial rate is high, it may indicate inefficiencies in coding, claim submission, or follow-up. Outsourcing firms often have dedicated teams and advanced analytics to improve collections and reduce denials. Identifying the tipping point where outsourcing delivers better financial results can help guide your decision. - How well do you track evolving regulations (e.g., No Surprises Act)?
Compliance with shifting healthcare regulations is crucial to avoiding fines and claim denials. If your ASC lacks the resources to monitor and adapt to changes like the No Surprises Act, outsourcing to a team with dedicated compliance expertise can mitigate risk.
8 Common Misconceptions About RCM Outsourcing
Outsourcing your RCM is a big decision. Handing over such a critical part of your operations can feel like a leap of faith, and it’s natural to have concerns. But too often, the decision is clouded by common misconceptions.
Let’s take a closer look at the biggest myths and uncover the reality of RCM outsourcing.
“Outsourced medical billing is expensive and only works for large practices.”
Outsourcing isn’t just for high-volume ASCs or large hospital systems. Many mid-sized and smaller ASCs benefit from outsourcing because it provides access to advanced technology, specialized expertise, and scalable solutions without the overhead of a full in-house billing team.
While there may be an upfront cost, outsourcing often leads to lower denial rates, higher collection efficiency, and reduced overhead, which makes it a cost-effective solution over time. The key is comparing total costs to collect, not just the line-item cost of outsourcing.
“It’s risky for patient data.”
Reputable RCM partners prioritize compliance, using strict security protocols, HIPAA-compliant systems, and advanced encryption to safeguard patient information — often at a higher standard than many in-house teams can maintain.
“Outsourced billing and coding is lower quality.”
On the contrary, specialized billing teams are trained to maximize accuracy, reduce costly errors, and boost first-pass claim acceptance rates. Leading RCM providers also invest in technology, analytics, and staff training to yield higher accuracy rates and faster payments. They follow the latest payer policies and coding updates to minimize denials.
“You’ll lose control of the process.”
Outsourcing isn’t about relinquishing control but about gaining expertise, efficiency, and financial stability. The right RCM partner offers full transparency, regular reporting, and performance-driven accountability.
“The transition is too complicated.”
If you’re worried about staff downtime, morale, or service disruptions, rest assured that a strong RCM partner makes transitions seamless with a clear implementation roadmap to minimize disruptions and ensure pain-free integration with existing systems. They offer hands-on training, transparent communication, and dedicated support to keep staff informed and engaged. Ultimately, the time your staff gets back can boost their morale.
“It’s a one-size-fits-all solution.”
Medical billing is complex, and experience matters. Specialized RCM teams have the knowledge to optimize reimbursement, reduce denials, and ensure compliance to deliver better financial outcomes. The most reputable outsourcing firms also tailor services to the specific needs of each healthcare organization type with flexible pricing models, customizable workflows, and personalized support.
“Medical coding is easy, and we can do it just as well in-house.”
Medical billing isn’t just data entry. It requires deep knowledge of payer rules, coding guidelines, and revenue cycle optimization strategies to maximize reimbursement.
In-house billing teams often struggle with staff turnover, training costs, and shifting compliance requirements. Outsourcing gives ASCs access to dedicated billing specialists who stay ahead of industry changes.
“RCM outsourcing is a new and untested industry.”
RCM outsourcing is a mature, growing industry that is rapidly outpacing in-house billing. The market is projected to reach $16.9 billion through 2033, with steady growth.
How to Choose the Right Outsourcing Partner
Outsourcing doesn’t have to be an all-or-nothing decision, especially if you can find the right partner to meet your needs, align with your values, and help your ASC thrive. For a smooth transition and strong revenue outcomes, look for a partner that offers:
- Seamless, user-friendly tools that integrate with your EHR and billing platforms.
- A responsive team with clear SLAs and dedicated account management.
- Upfront pricing with no hidden fees aligned with your financial goals.
- Robust data protection measures that meet HIPAA and industry regulations.
- Proven success backed by client testimonials and case studies.
- ASC expertise and the ability to grow with you.
- Advanced tools like AI-driven billing to optimize accuracy and efficiency.
At AT&C Revenue Services, we pride ourselves on decades of proven success with ASC-specific outsourced RCM services. If you think outsourced billing might be the right move for your organization, request a no-strings RCM assessment today to see how our services can improve your financial health.