U.S. Medical Billing Outsourcing Market Size to Hit US$ 12.7 billion by 2030

According to Nova one advisor, The U.S. Medical Billing Outsourcing market size was valued at US$ 4.9 billion in 2021 and is expected to hit US$ 12.7 billion by 2030, growing at a compound annual growth rate (CAGR) of 11.35% from 2022 to 2030.

Growth Factors:

Medical billing involves revenue cycle management (RCM), which comprises the most complex and crucial components of the healthcare IT business. Healthcare service providers are facing challenges in managing a large volume of claims and reimbursements, resulting in huge revenue losses. Owing to this, the demand for medical billing outsourcing services is increasing in the U.S.

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The rising patient load and the need to address the ever-growing record and bills are creating a burden on medical practitioners. To counter such a situation, hospitals are outsourcing the medical billing process, which is expected to drive the market. For instance, in October 2021, American Physician Partners (APP), a major company in emergency and intensive care management services, announced to extend its contract with R1 RCM Inc. till 2031. The partnership was first established in 2019 and is extended in the view of streamlining operations and scaling up performance.

The rules and regulations for health insurance in the U.S. are constantly changing and hospitals are struggling to keep up with the rapidly changing reimbursement environment. The current systems in practice for managing revenue are gradually becoming obsolete due to the lack of expertise in tackling new payment models and revenue management tools. Keeping pace with such rapid changes in the industry and being well updated with expanding knowledge base are time-consuming and tedious processes for businesses.

Report Scope of the U.S. Medical Billing Outsourcing Market

Hence, outsourced RCM services are the best option for hospitals and other medical institutions. U.S. hospitals partner with outsourcing companies who pose end-to-end knowledge of the Affordable Medical Care Act, Medicaid, and other health care and insurance programs. RCM practices involve high technological sophistication, coupled with trained expertise. The increasing implementation of several healthcare IT platforms has been positively influencing the growth of the market.

Hassle-free process of settling claims with features such as accounts receivable management and claims management and the availability of professional coders acquainted with the latest medical codes are the primary driving forces behind practices opting to outsource their billing services. However, the high threats of data breaches associated with medical billing in the U.S. are expected to hinder the growth of the market during the forecast period. For instance, according to Becker’s Healthcare data, in 2021, approximately 50 million of the American population’s health data was breached, which is around 3 times greater than in the past three years.

The pandemic has had some positive as well as negative effects on the market. The introduction of new ICD codes, Current Procedural Terminology (CPT) codes, and diagnosis codes for the COVID-19 billing and the telehealth billing has posed a greater challenge for the medical billing service providers. On the other hand, the adoption of RCM increased in the U.S. For instance, as per a survey conducted by AKASA, nearly 75% of the health systems in the U.S. has deployed RCM solutions during the pandemic.

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Component Insights

The outsourced segment held the largest revenue share of over 55.0% in 2021 and is expected to register the highest CAGR from 2022 to 2030. According to the study conducted by the National Healthcare Service Exchange, a physician’s practice spends approximately 14% of its total income to ensure the exact reimbursement of health insurance from insurers, which is much greater than the fees that an outsourcing agency charges for billing. On the other hand, outsourcing activity significantly reduces costs and proves a good fit for small and medium practices. To reduce healthcare costs, increase profit margin, and improve patient-physician relationships, various hospitals and independent physicians are accepting outsourcing billing services as a good option.

For instance, a recent MGMA study revealed that improved performance was witnessed with outsourced billing than with in-house billing. Approximately 73% of respondents revealed a reduction in AR days and a 59% decline in denied claims. Furthermore, a doctor could not provide the best possible care to patients if he/she is engaged in managing administrative processes, such as recovering claims and managing bills. Hence, to enhance the focus on medical care, large hospitals started outsourcing these services.

Service Insights

The front-end services segment dominated the market with a revenue share of over 35.0% in 2021. It consists of processes such as scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. Managing front-end services well is a key to reducing repetitive work and improving the patient experience with faster service. Therefore, the demand for outsourcing these services is strong. Middle-end services are anticipated to witness maximum growth in the coming years due to the entry of new market players, growing awareness among healthcare practitioners, and increasing adoption of services.

The rising number of claim denials due to inefficient claim management and the increasing burden on the front-end service providers is likely to propel the demand for back-end services. Back-end services minimize the burden of front-end services. For instance, according to the report of the advisory board of RevCycle Intelligence, around 90% of denials of claims can be prevented and can be corrected for payment but are never resubmitted to payers due to lack of focus.

End-use Insights

The hospitals segment accounted for the largest revenue share of over 45.0% in 2021. Hospitals are the prime users of outsourcing services due to high claim volume. Consolidations of hospitals further increase complexity in billing and reimbursement procedures. This is fueling the segment growth. The majority of hospitals and healthcare facilities are shifting towards RCM services to minimize errors and find a cost-effective solution.

For instance, in December 2021, Allied Digestive Health, a Northeast-based gastroenterology treatment provider, selected Athenahealth Inc. for its patient engagement service and medical billing. The physician offices segment is projected to witness substantial growth during the forecast period. The soaring need for more cost-effective and efficient processes and increasing emphasis on compliance and risk management by regulatory authorities are supplementing the growth of the segment.

Some of the prominent players in the U.S. Medical Billing Outsourcing market include:

• R1RCM Inc.
• Allscripts Healthcare, LLC
• Cerner Corporation
• eClinicalWorks
• Kareo, Inc.
• McKesson Corporation
• Quest Diagnostics Incorporated
• Promantra Inc.
• AdvancedMD, Inc.

Segments Covered in the Report

This research report offers market revenue, sales volume, production assessment and prognoses by classifying it on the basis of various aspects. Further, this research study investigates market size, production, consumption and its development trends at U.S. for the period of 2017 to 2030

• By Component
  • In-house
  • Outsourced
• By Service
  • Front-end service
  • Middle-end services
  • Back-end services
• By End-use
  • Hospitals
  • Physician Offices
  • Others

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Key Questions Answered in U.S. Medical Billing Outsourcing Market Report

What will be the sales/revenue generated by U.S. Medical Billing Outsourcing across all regions during the forecast period?

What are the opportunities in the U.S. Medical Billing Outsourcing market?

What are the major drivers, restraints, opportunities, and threats in the market?

Which regional market is set to expand at the fastest CAGR during the forecast period?

Which application is expected to generate the highest revenue U.S. in 2030? Which segment is projected to expand at the highest CAGR during the forecast period?

What is the market position of different companies operating in the U.S. market?

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