On this page
- What Is the Difference Between In-House and Outsourced Billing?
- How Much Does In-House Medical Billing Cost?
- How Much Does Outsourced Billing Cost?
- Does In-House or Outsourced Billing Collect More?
- What Are the Pros and Cons of Each Billing Model?
- When Does In-House Billing Make Sense?
- When Should an Eye Practice Outsource Billing?
- What Is a Hybrid Billing Model?
- How Do You Choose Between In-House and Outsourced Billing?
Key takeaways
- An in-house biller costs about $55,000 to $75,000 a year in salary, plus 20% to 30% for benefits and payroll taxes.
- Outsourced billing usually costs 3% to 8% of collections, so the fee rises and falls with revenue.
- Net collection rate matters more than cost. On $1.2 million a year, each 1-point change is worth $12,000.
- Many eye practices choose a hybrid model and keep front desk work in-house.
What Is the Difference Between In-House and Outsourced Billing?
In-house billing means your own employees code, submit and follow up on claims, while outsourced billing means a billing company does that work for a fee, usually a percentage of collections. Both models use the same claims, payers and rules. The difference is who does the work, how you pay for it and how you oversee it.
In an eye practice, the work includes coding exams and procedures, routing visits between medical insurance and vision plans, posting payments, appealing denials and chasing aged A/R. Our guide to ophthalmology revenue cycle management describes each step.
How Much Does In-House Medical Billing Cost?
In-house medical billing costs far more than a biller's salary, often $150,000 to $250,000 a year for a two-person team once benefits, software and turnover are counted. The salary is the most visible cost, but it is rarely the largest share of the total.
The table below lists the cost items for a typical two-biller eye practice team.
| Cost item | Typical 2026 amount |
|---|---|
| Biller salary | $55,000 to $75,000 per biller |
| Benefits and payroll taxes | 20% to 30% of salary |
| Practice management, clearinghouse and statements | Varies by vendor and volume |
| Coding references and training | Yearly, as CPT and payer rules change |
| Hiring and training after turnover | Weeks of lost output per departure |
Two billers at $62,000 with 25% benefits cost $155,000 a year before software, training or turnover are added.
How Much Does Outsourced Billing Cost?
Outsourced medical billing usually costs 3% to 8% of monthly collections, and some companies charge $4 to $12 per claim instead. Surgical and retina practices often pay rates toward the lower end because each claim carries more value.
What changes the outsourced rate?
Five factors move the rate. They are monthly collection volume, service mix, which services are included, the number of providers and locations, and the payer mix. See ophthalmology billing services cost for the pricing models in detail.
What does a percentage fee cost at different volumes?
A practice collecting $1.2 million a year pays $36,000 at 3% and $96,000 at 8%. The fee falls automatically when collections fall, which fixed salaries do not.
Does In-House or Outsourced Billing Collect More?
The option with the higher net collection rate collects more money, and that difference usually outweighs any gap in cost. On $1.2 million of annual collections, each 1-point change in net collection rate is worth $12,000 a year.
A team that collects 97% of what is owed instead of 92% brings in $60,000 more a year on the same collections. Ask any in-house team or vendor for three numbers before comparing cost.
- Net collection rate, with 95% or higher as the eye care target
- Days in A/R, with under 35 days as the target
- Denial rate, with under 5% as the target
What Are the Pros and Cons of Each Billing Model?
In-house billing gives more direct control and faster internal communication, while outsourcing gives specialist depth, cover for absences and a cost that tracks revenue. The table compares the two side by side.
| Factor | In-house billing | Outsourced billing |
|---|---|---|
| Cost structure | Fixed salaries and overhead | Percentage of collections or per claim |
| Control | Direct, daily oversight | Oversight through reports and contract terms |
| Communication | Down the hall | Through an account lead |
| Staff absence | Work can stop | A team covers every role |
| Eye care expertise | Depends on who you hire | Depends on the vendor you choose |
| Rule changes | Your staff must keep up | The vendor keeps up across many clients |
Neither column wins on every row. The right choice depends on practice size, service mix and how well the current team performs.
When Does In-House Billing Make Sense?
In-house billing makes sense for large practices that can staff every billing role with a trained backup and already meet eye care benchmarks. Those practices have enough claim volume to keep specialists busy and managers with ophthalmology billing experience.
Three signs suggest in-house billing is working. The net collection rate is 95% or higher, days in A/R stay under 35, and denials are worked within a week of posting.
When Should an Eye Practice Outsource Billing?
An eye practice should consider outsourcing when it cannot staff every billing role, misses collection benchmarks or adds complex services such as injections, MIGS or an ASC. These four situations cover most practices that switch.
- Small or mid-size practice. One or two billers cannot cover coding, posting, denials and A/R with a backup for each.
- Complex services added. Anti-VEGF injections, MIGS and ASC claims carry drug units, device rules and facility billing.
- High turnover. Each departure costs weeks of training and a backlog of unworked claims.
- Missed benchmarks. Net collection rate below 95% or A/R over 90 days above 15% of the total.
What Is a Hybrid Billing Model?
A hybrid billing model keeps daily front-end work in-house and outsources the work that needs specialist depth. Many eye practices keep scheduling, check-in collections and charge capture with their own staff and outsource denial management, A/R recovery and credentialing.
The hybrid model keeps control close to the practice and adds expertise where errors cost the most.
How Do You Choose Between In-House and Outsourced Billing?
Decide with your own numbers, not averages, by measuring your current collection results and total billing cost first. A free ophthalmology billing audit gives you net collection rate, days in A/R and denial rate in writing, so you can compare your in-house results with what a vendor would need to beat.
If you choose to outsource, choosing a billing partner starts with the questions you ask before signing.