The Staffing Problem That's Quietly Killing Your Billing

Most practice administrators who are frustrated with their billing operation think they have a billing problem. Denial rates are up, AR days are creeping, collections feel inconsistent. The instinct is to look at the billing workflow, the software, the payer contracts.

The data points somewhere else. What most practices are actually dealing with is a staffing problem that billing pays for. And it has gotten materially worse over the past three years.

The Numbers Behind the Problem

This isn't anecdotal. The staffing challenge in revenue cycle management is now documented across every major industry data source, and the picture they paint is consistent.

The hardest positions to fill, according to MGMA polling of 469 practice leaders, are medical coders (cited by 34% of respondents), billers (26%), schedulers (18%), and authorization staff (15%). Every one of those roles sits directly between the care your practice delivers and the payment you receive for it.

When those seats are empty or filled by staff who are still learning, the consequences are not theoretical. They are measurable, and they compound daily.

What a Staffing Gap Actually Costs

The visible cost of a vacant billing position is the salary you are not paying. The invisible cost is everything that does not get done while you are searching, interviewing, onboarding, and training a replacement.

Denied claims go unworked. Aging AR sits past the 90-day mark where recovery rates drop significantly. Prior authorizations get missed or delayed, pushing procedures back and frustrating patients. Coding errors that a more experienced specialist would catch get submitted, denied, and added to the rework pile.

Operating costs compound the issue further. Medical practice leaders reported an average year-to-date operating expense increase of 11.1% in 2025 compared to the same period in 2024, with staffing costs, primarily salaries, benefits, and competitive pay adjustments, cited as the leading driver. At the same time, only 56% of medical group leaders reported revenue increases in the same period, while 30% reported an outright decline.

The math is straightforward and unpleasant. Costs up 11%. Revenue flat to declining for nearly half of practices. The margin between those two numbers is where practices are quietly losing ground.

The Revenue Leakage That Never Shows Up on a Report

Here is where the staffing problem becomes a billing problem in ways that most standard reports do not capture.

An industry analysis of 2.6 million encounters found that practices with denial rates in the "acceptable" range of 5 to 7% were still losing between 3.1% and 4.4% of revenue to undercoding, and another 1.2% to 2% to missed filing deadlines. Neither of those losses appears on a payer denial report. They are invisible unless someone is specifically looking for them.

Undercoding is a particular problem in understaffed environments. When a biller is covering multiple responsibilities, processing high claim volume under time pressure, and lacking the specialty-specific expertise to confidently apply the highest defensible code, the instinct is to code conservatively. That conservatism is not compliance. It is permanent, unrecoverable revenue loss on work that was already done.

The MGMA and HFMA benchmark for a high-performing physician group is a net collection ratio of 96 to 99%. Below 95% signals systemic billing leakage. For a 10-physician surgical group generating $5 million in allowable charges annually, the difference between a 94% net collection ratio and a 97% ratio is $150,000 per year in recovered revenue, with no new patients and no fee schedule changes required.

Why Outsourcing Solves the Problem In-House Hiring Cannot

When practices try to solve a staffing problem by hiring, they are competing in a market that is working against them. Medical coders require specialized training that takes time to develop. Certified coders command higher compensation. The pool of qualified candidates is limited and competitive. And even when a practice successfully recruits and onboards a strong billing specialist, turnover rates in these roles remain elevated, meaning the cycle starts again.

Outsourcing changes the structure of the problem entirely. Instead of competing for a shrinking talent pool, the practice accesses a team of specialists whose sole function is revenue cycle management, whose expertise spans multiple specialties and payer contracts, and whose performance is measured daily against the metrics that matter.

You Don't Have to Go All-In to Find Out

The most common objection to outsourcing RCM is concern about disruption. That concern is legitimate, and the answer to it is simple: you do not have to hand over your entire billing operation to run the test.

Two entry points carry virtually no disruption risk and give you real performance data quickly.

The first is your aging AR. Accounts past 120 days are money your in-house team has effectively stopped pursuing. An outsourced AR recovery engagement works those accounts on a contingency basis. You pay nothing unless they recover something, and what they recover is revenue you had already written off mentally, if not yet on paper. The quality of that result tells you more about what a billing partner can do than any sales conversation will.

The second is a single location or a defined subset of your payer mix. Run a 90-day parallel comparison. Track first-pass acceptance, AR days, and net collection rate at the pilot location against your other sites. The data either justifies expanding the relationship or it does not. Either way, your main operation ran without interruption.

The practices making this move are not doing it because outsourcing is a trend. They are doing it because they have run the numbers on what their current staffing situation is actually costing them, and the math is no longer close.

If your billing operation is performing at or above the MGMA benchmark for your specialty, keep doing what you are doing. If it is not, or if you genuinely do not know where you stand against that benchmark, the conversation costs nothing and the answer is worth having.