4 Ways To Reduce Your Costs When Running A Medical Billing Firm

4 Ways To Reduce Your Costs When Running A Medical Billing Firm

Whether your Medical Billing company is based in New York, Florida or Hawaii, the increasing costs of overheads like your medical billing department, team and resources coupled with the growth of competition, means that now more so than ever, reducing your costs when running a medical billing firm is imperative. I’ve worked with medical billing firms around the United States for just over six years, from supporting vast teams to developing the latest, most efficient billing processes, reducing costs and increasing profit is my specialty.

In my experience, most medical billing companies have already set up a process which streamlines services and develops a functioning team. So when I am asked “how do I reduce my medical billing costs?” I always start with infrastructure. Overheads are the largest cost to your firm and although most CEO’s are too busy to analyse overhead efficiencies, this is the single best way to reduce costs.


This may sound obvious, but judging by the sheer number of firms I’ve worked with who still function on a paper system, this really cannot be overstated. Each time you walk into your medical billing firm and hear shuffling paper, what you are actually listening to is the thousands and thousands of dollars you are spending on unnecessary office supplies. Often the reason for this is due to the transition from a paper system being a digital one that can seem monumental. But if you take one thing from this blog, let it be this: a move to a digital system will be one of the best investments a firm can make. Here’s why:

  • Massive reduction in file storage requirements
  • Less time wasted on organising papers
  • Avoid thousands on paper, printer cartridges…
  • Reduce chances of lost paperwork which cuts rate of failed claims
  • Ease of access speeds up process time


So now you’re paperless, great. Here’s where your reduction of costs becomes a long term strategy, we medical billers are infamous for our lack of technical training. Most billing firms can benefit by accessing online resources, some electronic systems provide these for free. Nathan Jamil in his book, the Sales Leaders Playbook argues that “When a person practices they become more knowledgeable…they become more confident… motivated.”



One of the most important skills a leader needs today is to be able to step back and assess the health of their business. To determine which data is vital and which is superficial, this is especially true for medical billing companies as outdated and timely processes can drain resources and increase the number of failed claims. As each medical billing company is unique to its location, size, vision, target audience and mission statement, it would be reductive of me to suggest a blanket process, it simply would not work. What does work however, is taking the time to understand some key facts about our industry and how you can use this information to your benefit. Start by answering the following questions:

  • What is the average time it takes your company to process a claim?

The industry standard would suggest that a claim should be processed between 40-45 days depending on the size of your team, take the average number of days it takes your team to process a claim and aim to reduce it. The more transparent you are with your team the better.

  • Is each team member processing claims at a similar pace?

Once you have important data on your team’s performance, you can begin to increase efficiencies. By taking a look at each member’s performance you can track your high and low performers. One of the most effective efficiency boosting motivators for lower performers are tangible, agreed upon and realistic goals.


One of the biggest mistakes a medical billing company can make, when looking specifically at reducing costs is not taking the executive decision to terminate ‘bad’ employees. Now let me start this by saying, letting a team member go must be a decision made on facts and recorded inefficiencies. I’ve often heard CEO’s or COO’s claim that they avoid letting the one bad employee go in fear that will stifle the motivation and loyalty of the team.

I have found the opposite to be true. With just over 500 team members, employee happiness is something that I hold close to me. By allowing the employees with a negative attitude or bad work ethic to remain, you as the head of company are setting a precedent for your business by allowing them to stay and I have found this to exacerbate frustrations of the team whilst also depressing aspirations and motivations.


In the end, your costs are your responsibilities, it’s all too easy for key decision makers within medical billing companies to take their eye of the ball with overheads. A change as simple as team structure or a slight nudge to a process can make all the difference, make a few of the changes I’ve mentioned above and give them enough time and space to be successful. Tagged Kapp