Billing is the bridge between services provided and revenue earned. That’s why healthcare owners pay close attention to billing tasks. The real concern for healthcare organizations is the cost of dermatology billing. Some build an in-house billing team, while others hire a third party to handle it. Both options come with their own costs, benefits, and challenges. Let’s see which one works best for you.
In this article, we’ll break down the cost of dermatology billing in hospitals. We’ll also compare in-house and outsourced billing costs. Finally, we’ll recommend a professional billing agency, SysMD, as an outsourcing option for your hospital.
Understanding the Importance of Dermatology Billing Costs
Dermatology billing doesn’t end with sending invoices. Costs and revenues tied to billing directly affect your hospital’s financial stability.
Dermatology billing includes:
- Entering patient details
- Coding visits and procedures
- Submitting claims to insurance companies
- Following up on denials
- Reconciling payments
A single mistake in any of these steps can make the entire bill inaccurate. Payers often reject such claims, leading to revenue losses. Knowing the cost of dermatology billing helps you decide whether to hire staff in-house or outsource. This choice has a direct impact on financial stability.
In-House Billing Costs: The Real Numbers
In-house billing means assigning billing tasks to your clinic’s administrative team or medical staff. They handle coding, claims, and payer communication.
Here’s what in-house billing costs typically look like:
Staff Salaries
Dermatology clinics pay a set salary to each billing staff member. The average annual salary for a medical biller ranges from $40,000 to $55,000. Most clinics need more than one biller, so costs add up quickly.
Benefits and Training
Beyond salaries, staff also expect benefits such as health insurance, retirement contributions, and paid leave. Training is another recurring cost, as billing guidelines and policies are updated frequently.
Billing Software and Tools
Effective billing requires paid billing software. Licensing fees, upgrades, and maintenance can add thousands of dollars annually.
Office Space and Equipment
Billing staff need workstations, computers, phones, and dedicated office space. This not only adds to costs but can also reduce space available for patients.
Risk of Errors
When staff juggle both patients and billing, mistakes are more likely. Errors increase claim denials and revenue losses.
Estimated Yearly In-House Cost for a Small Clinic:
- Salaries and benefits: $60,000 – $80,000
- Software: $10,000 – $20,000
- Office expenses: $5,000 – $10,000
- Training: $2,000 – $5,000
- Total: $77,000 – $115,000
For larger clinics, these costs rise further.
Outsourcing Dermatology Billing: The Costs
Outsourcing means hiring a professional third party to handle your billing and claims. You typically pay a percentage of collections, not salaries or software costs.
Here’s how outsourcing helps reduce costs:
Percentage of Collections
Most billing companies charge 4% to 10% of monthly collections. For example, if your clinic earns $100,000 in revenue, outsourcing fees may be $4,000–$10,000.
No Extra Staffing Costs
You pay the outsourcing firm—not individual staff salaries, benefits, or training costs.
Advanced Software Included
Outsourced billing firms provide their own software at no extra charge.
Lower Denial Rates
Professional billers are trained to code and submit claims accurately, lowering denial rates and increasing revenue.
Estimated Yearly Outsourced Cost for a Clinic Collecting $1 Million:
- 5% billing fee = $50,000
- No training, software, or office costs
- Total: $50,000
Cost Comparison: In-House vs Outsourcing
| Cost Factors | In-House Billing | Outsourced Billing |
|---|---|---|
| Salaries & Benefits | $60,000 – $80,000 | $0 |
| Software | $10,000 – $20,000 | Included in fees |
| Training | $2,000 – $5,000 | Included in fees |
| Office Space | $5,000 – $10,000 | $0 |
| Errors & Denials | Higher risk | Lower risk |
| Annual Cost | $77,000 – $115,000 | ~$50,000 (5% of collections) |
Clearly, outsourcing offers significant cost savings.
Other Benefits of Outsourcing
Cost savings are just the beginning. Outsourcing also provides:
- Scalability: Billing firms can handle growth without hiring new staff.
- Focus on Patients: With billing handled externally, doctors and staff can focus on patient care.
- Compliance: Billing firms stay up to date on new codes and regulations.
- Technology Access: Outsourcing gives clinics access to advanced billing software and reporting tools.
When In-House Billing Makes Sense
In-house billing can still be a good choice if:
- Your clinic is small with low patient volume.
- You want complete control over billing.
- You already have an experienced, reliable in-house team.
In these cases, the cost difference may not be significant.
How to Decide: Outsourcing vs In-House
Not sure which way to go? Here’s how to decide:
- Calculate total costs for both models.
- Weigh error rates, compliance needs, and growth plans.
- Consider how much staff time you’ll save.
Your best choice depends on your clinic’s size, budget, and long-term goals.
How Outsourcing SysMD can be Helpful?
SysMD is an expert billing company that manages dermatology billing services as well as other hospital billing systems. T Their team is expert in medical billing, coding, and appointment scheduling. Their professional billing departments employ state-of-the-art software to guarantee timely and accurate claims. They can assign accurate and specific codes for different types of dermatology claims.
Clinics with SysMD partnerships usually experience lower rates of claim denials and increased cash flows. Through outsourcing to SysMD, the dermatology practices save money and have a feeling of safety and peace of mind to concentrate on patients.
Conclusion
Dermatology billing costs are a critical factor for every clinic. In-house billing offers control but comes with high fixed costs. Outsourcing lowers expenses and gives you access to expert teams, making it a strong option for many practices.
The right choice depends on your clinic’s size, budget, and growth plans. With a trusted partner like SysMD, you can reduce costs, improve revenue, and focus on what matters most—your patients.
FAQS
What is the average cost of in-house dermatology billing?
Between $77,000 and $115,000 annually, depending on staff salaries, software, and office expenses.
How much does outsourcing dermatology billing cost?
Typically 4% to 10% of collections. For a clinic collecting $1 million annually, that’s about $50,000.
Is outsourcing always cheaper than in-house billing?
Not always. Small clinics with low patient volume may find in-house billing more cost-effective. For mid- and large-sized practices, outsourcing usually saves money.
What are the main benefits of outsourcing billing?
Lower costs, fewer errors, compliance support, and more time for patient care.
Why choose SysMD for dermatology billing?
SysMD combines expert teams with advanced tools, helping clinics increase collections and reduce denials.