Outsource vs. In-House Billing in 2024: The Numbers That Actually Matter

This in-depth analysis from the VLMS Software research team covers Strategy benchmarks, best practices, and actionable strategies for healthcare revenue cycle professionals. The data and recommendations in this article draw from MGMA 2023–2024 benchmarks, HFMA industry surveys, and our direct experience managing over $2.4 billion in healthcare revenue.

Why Strategy Matters More Than Most Practices Realise

Revenue cycle management is full of metrics that get tracked but rarely acted on. Strategy sits in a different category — it's a leading indicator that, when poorly managed, compounds across every other downstream metric. The practices that consistently outperform their peers have typically mastered this area before optimising elsewhere.

Across our portfolio of 500+ practices, we consistently see a pattern: organisations that rank in the top quartile on this metric also achieve net collection rates above 97%, AR days below 35, and denial rates under 5%. The correlation is not coincidental.

Current Industry Benchmarks (2024)

The MGMA 2024 Cost and Revenue Survey and HFMA's benchmarking data provide the most credible industry standards. Rather than quoting single-point benchmarks that may not apply to your situation, we recommend using our interactive tools to get a specialty-specific comparison against the 25th, 50th, and 75th percentiles.

The Five Most Common Mistakes

1. Using gross metrics instead of net metrics — Gross figures include contractual adjustments and paint a misleading picture of actual performance.
2. Benchmarking against the wrong peer group — A neurology practice comparing itself to primary care benchmarks will systematically misread its performance.
3. Tracking at the practice level only — The biggest issues are almost always at the provider or payer level, not the aggregate.
4. Acting on monthly snapshots — Single-month data is too noisy. Use trailing 90-day averages to spot real trends.
5. Ignoring the upstream drivers — Most downstream revenue cycle problems have upstream causes in scheduling, documentation, or authorisation.

A Systematic Improvement Framework

Improving performance in this area requires a structured approach rather than ad hoc fixes. The framework we apply across client engagements follows a consistent pattern: measure accurately, benchmark against the right peer group, identify the highest-value gaps, address root causes upstream, and track leading indicators that predict future performance.

The organisations that see the fastest improvement share one characteristic: they treat revenue cycle metrics as operational metrics, not financial metrics. They review them weekly, assign ownership, and connect them directly to team accountability systems.

"The difference between a 94% and a 97% net collection rate isn't three points — it's the difference between a practice that's growing and one that's struggling to invest in its future." — RCM Director, Regional Health System

How VLMS Can Help

Our diagnostic tools give you an instant benchmark comparison. Our managed services team can take over your full revenue cycle and deliver measurable improvement — typically within 90 days. We price on a performance basis, so our incentives are perfectly aligned with yours.