Blog Post

Billing Software vs. RCM Service: What's the Difference, and What's Right for Your Practice?

Software? RCM Service? A little bit of both? Which one's right for your practice? Click here to learn more so you can make the right choice!

Courtney Lefferts
5 min read
July 23, 2019
image representing billing software vs. rcm service: what's the difference, and what's right for your practice?
Share this post:


Get the latest news and tips directly in your inbox by subscribing to our monthly newsletter

Billing is one of the most complicated aspects of running a clinic. And considering the fact that billing rules seem to change as often as the season, it’s easy to make mistakes—and find yourself face-to-face with a billing blunder beast. (Try saying that three times fast!) At some point, even the most vigilant providers and billers need a little bit of help crossing all of their t’s and dotting all of their i’s, so to speak.

So, how do you decide which billing solution is best for your needs? Specifically, should you use an in-house billing software or outsource your billing to an RCM service? Let’s examine.

Billing Software

When you process your billing in-house using a billing software, you rely on the expertise of your own staff. This means you’re responsible for every step of the billing process, which is great if you prefer a more hands-on approach to your practice’s billing. Furthermore, because you handle everything in-house, you can quickly resolve any issues that do arise. So, if your billing process is efficient—and you have a highly trained and capable biller on staff—this option might be your best bet.

Additionally, using a billing software often costs less than enlisting a billing service, especially if you choose a web-based software, which eliminates the need to purchase costly hardware. Another cost-saving and efficiency-boosting measure: Make sure your billing software integrates with your EMR. That way, you don’t have to worry about any double entry of codes and demographic information—which is especially important with complicated rule and regulation changes.

RCM Service

If you don’t have a solid billing team and software in place, an RCM service can offer some major peace of mind. I mean, the service literally handles all your billing for you. In that sense, having a team of revenue cycle management pros working for your practice seems like a no-brainer. However, there’s one major factor you have to consider with this option: cost. Most billing services charge a percentage of collections (typically 6-12%), which means the more money you bring in, the more you pay out. And that can cause issues when it comes to budgeting for your practice’s monthly expenses, as there can be significant variances in costs depending on how busy you were that month.

That said, if you have a quality team of RCM experts on your side, the costs don’t have to outweigh the benefits. As this Greenway Health resource explains, “A good RCM vendor will be able to demonstrate an ROI.” But, there’s more to this decision than financial ROI. Case in point: Practices that switch to an RCM service typically experience a reduced billing burden—and that means fewer headaches. After all, when you outsource your billing to a professional billing service, you don’t have to worry about staffing or the time-consuming claims process—including maximizing reimbursements and combating denials. Additionally, you can count on timely accounts receivable (AR) collections and a staff of experts who remain up to date on the latest regulations, which can prove vital when it comes to Medicare compliance. (Modifiers, anyone?)

Hybrid Billing Model

By this point, you might be thinking, “Hey, both options sounds pretty good!” And if so, you’d be right: using a billing software and outsourcing your RCM to a team both have their respective benefits. But, what if you want the benefits of in-house billing while simultaneously taking some of the RCM burden off your staff’s plate (and retaining your current in-house biller)? Well, you’re in luck: say hello to the hybrid billing model.

With a hybrid model, you get the support of an expert billing team while retaining a hands-on approach to your RCM processes. And as your clinic grows, you’ll also free up your—and your team’s—time so you can focus on other important things (like treating patients or marketing your practice). In most cases, you can expect to continue handling administrative tasks (like credentialing, data entry, insurance verification, and patient payment posting) while leaving the more technical stuff (like claim scrubbing, A/R management, and collections) to your outsourced team. Talk about a win-win.


So, which option should your clinic choose? Should you follow the dollar signs? Well, when it comes to billing operations, you should consider more than just cost. Here are some questions you can ask yourself to help with the decision-making process:

The answers to these questions should help you form a decision. If you already have a process in place, and it’s efficient and cost-effective, that’s awesome. (Just make sure you’re regularly auditing it.) If not, then you might need to restructure how you do things—which can be scary, but absolutely doable.

The ultimate goal of any billing solution is to maximize payments and get that revenue flowing, so rest assured that while choosing a path can be a chore, there’s light at the end of the tunnel—with no billing monsters in sight.


KLAS award logo for 2024 Best-in-KLAS Outpatient Therapy/Rehab
Best in KLAS  2024
G2 rating official logo
Momentum Leader Winter 2024
Capterra logo
Most Loved Workplace 2023
TrustRadius logo
Top Rated 2023
Join the PXM revolution!

Learn how WebPT’s PXM platform can catapult your practice to new heights.

Get Started
two patients holding a physical therapist on their shoulders