5 Reasons Why Outsourcing DME Billing is a Bad Idea

As demand for home medical equipment continues to grow, it’s getting harder and harder to bill patients accurately and timely. Overhead costs associated with hiring in-house employees, compounded by the shortage of labor, is pushing DME/HME suppliers to seek new alternatives. Some suppliers opt for outsourcing, which is a bad idea in the long run as it comes with hidden fees, variable costs, lack of control, and security concerns. Let’s look at the problems of outsourcing HME/DME and the reasons why automation could be a better alternative.

Problems with Outsourcing Medical Billing 

Healthcare providers can rush to outsourcing billing because it appears easy, cheap, and great at first glance. With outsourcing, you don’t buy any equipment, hire staff, or incur administrative costs related to coding and billing. You just send patients’ details and other relevant data and the outsourcing company will do the rest. However, there are critical problems that can break your business, customer trust, or even attract the attention of auditors. Here are the major problems of outsourcing DME/HME billing:

  • Hidden Fees & Variable Costs 

When you outsource, you’ll first select your monthly subscription plan. When billing is done off-premise, you’ve no control of many things, including spending. You’re likely to incur extra costs when you for analytical reports, statements, or plan cancellation. Also, as the outsourcing company grows and attracts more customers, they’re likely to increase the price of their subscription plans, and you’ll either oblige or choose another company, which may be costly. DME/HME billing companies get paid between 5-10% of your total revenue. This can translate to a significant amount of money during busy months when you handle a lot of money. 

  • Lack of Control 

While outsourcing relieves you of the burdensome billing tasks, you still need to control some aspects of the billing process. Outsourcing leaves you with no direct control, which can lead to slow decision-making. Without direct control, you can’t handle customer complaints about payment and insurance issues in real-time, which can lead to low customer satisfaction. 

  • Data Breach Concerns 

Since medical billers deal with tons of patient records and insurance, they’re vulnerable to data breaches as compared to your practice. When a data breach occurs, HIPAA may sue your healthcare business and you’ll lose patients’ trust. When you handle your billing in-house, you’re able to adhere to privacy and EHR rules. One of the major concerns for outsourcing is whether the company will have robust guidelines and frameworks for adhering to HITECH and HIPAA regulations. You can never be 100% sure of the security of your patients’ data so long as it’s being handled by a third party. 

  • Practical Limitations  

Correcting errors, updating patient information, and doing other tasks can easily be done in-house. However, if these tasks are delegated to other companies, it takes time to communicate and handle even minor corrections. Also, when HIPAA auditors come knocking, it’s easier to show them all the documents and explain discrepancies if you handle your stuff in-house. Internal teams always have quick access to medical records and patient information than outsourced teams. You should also know that outsourcing ain’t a cure-all as you still have to ensure the company does everything as you’d like. 

  • Lack of Specialization 

While billing for ordinary medical treatments like flu infection doesn’t need a lot of coding, HME/DME billing can be complex. It’s risky to outsource billing for specialty practices such as cardiothoracic surgery clinics where coding and billing procedures are complex. Those in specialty practices may choose to outsource parts of the billing process, like submitting claims and receiving collections.

Automation as the Best Outsourcing Alternative 


If you can’t outsource for fear of data breach, hidden fees, lack of control, or any other reason, then the best alternative is automation. The hme dme software sits somewhere between in-house and outsourced DME/HME billing. For example, it provides software that balances the benefits and cons of in-house and outsourcing to give you the best solution for your practice. Through automation, you still retain control of your coding and billing processes and don’t expose your business to HIPAA and HITECH compliance risks.

Here are the reasons why automation is the best alternative to outsourcing home medical equipment billing:

  • Startups and small medical practices can take advantage of the cost-saving DME software. Outsourcing or maintaining an in-house billing team can be expensive for small healthcare practices, but the automation tool is an affordable solution for all medical providers.
  • Automation tools replace paper-based workflow systems in your organization without relinquishing control or patient data to third-party organizations. Through these tools, you can manage and track billing in real-time and correct errors, as they happen at no extra cost.
  • Adopting durable medical equipment tools improves your revenue cycle management (RCM) by reducing errors, decreasing denials, and increasing payments. HME billing software (https://nikohealth.com/hme-dme-billing-software/) enables you to keep track of the status of all claims. It also enhances the collection of deductibles, copays, and out-of-pocket payments.
  • Unlike outsourcing, where you aren’t sure of compliance and security of protected health information (PHI), HME/DME software gives you complete control of the security of your data. Automation tools speed document verification, reducing time spent by healthcare admins in assessing a patient’s insurance details.

An efficient software solution ensures DME suppliers improve their core business by adopting software that handles unique functions involved in DME/HME acquisition, delivery, repair, and replacement. Our automation tool is better than outsourcing because it does much more than just managing billing and collections. It allows you to create real-time reports, improve efficiency, cut down administrative costs, and improve customer satisfaction.

Related Articles

Stay Connected


Latest Articles