Payment Processing
Choosing between outsourced billing and hiring in-house staff affects your budget and daily operations. Concrete numbers help you plan. Understanding which model makes financial sense for your practice size gives you control. Here's what makes this decision harder: authoritative pricing data for dental billing companies doesn't exist in public sources. The American Dental Association doesn't publish member cost surveys. Major consulting firms keep their research behind client paywalls. What can you count on? In-house staffing costs come with clear benchmarks. Your annual collection volume provides a framework for which model fits your practice. A structured approach to gathering outsourced quotes gives you the comparison data you need.
Dec 6, 2025
What In-House Billing Actually Costs
Calculating true employment costs requires looking beyond base salary. Benefits, payroll taxes and overhead add significant expense that many practices underestimate when comparing billing models. These hidden costs often tip the scales when deciding between in-house staff and outsourced providers.
Your base salary costs vary by role and experience:
Entry-level billing specialist: $27,000 annually
According to the Bureau of Labor Statistics, the median annual wage for billing professionals is $48,780, with the upper percentiles reaching $54,390, though this range covers general billing roles rather than dental-specific positions
Office manager with billing oversight: $60,000+ annually
These numbers don't include the 25-40% benefits burden you'll pay, according to the Bureau of Labor Statistics' employer cost data. An experienced billing coordinator with a $50,000 base salary actually costs your practice $62,500-$70,000 when you include health insurance, retirement contributions, paid time off and employer-side taxes.
Specialized dental accounting firms report that administrative costs represent 6-8% of practice revenue. This includes billing software, services and supplies. Total staffing costs typically run 25-27% of revenue.
Small practices with 1-2 practitioners typically budget $34,000-$55,000 annually for one billing specialist or split-duty front office staff. Medium practices with 3-5 practitioners need 1-2 dedicated billing specialists plus partial manager oversight. This pushes costs to $75,000-$145,000 annually.
Practice management software represents another major expense, but major platforms use quote-based pricing without published rates. You'll need direct vendor quotes to calculate complete in-house costs.
How to Get Outsourced Pricing Data
Published pricing benchmarks for dental billing services don't exist from authoritative public sources. The ADA doesn't release member cost surveys, and consulting firms keep their research behind paywalls. You'll need to build your own comparison dataset through direct outreach.
Understand Common Fee Structures
Outsourced billing companies typically charge using one of three models. Understanding these structures helps you compare quotes accurately. Each model carries distinct advantages depending on your collection volume and growth trajectory.
Percentage of collections: You pay a percentage of insurance payments collected. Higher-volume practices negotiate lower percentages. This model aligns vendor incentives with your revenue goals but costs more as collections grow.
Flat monthly fee: You pay a fixed amount regardless of collections volume. This model provides predictable costs and works well for practices with stable, high-volume collections. Watch for services excluded from flat-fee quotes that become add-on charges.
Hybrid models: Base monthly fee plus percentage of collections above a threshold. Some vendors also charge per-claim fees for specific services like appeals or patient statements.
When comparing quotes, calculate your annual cost under each fee structure using your current collection volume. Request quotes from multiple providers to establish a realistic price range for your practice size and complexity.
Collect 5-7 Vendor Quotes
Request detailed proposals from multiple billing companies. Make each vendor specify their complete scope of services, not just headline rates. The details in these quotes matter more than advertised percentages.
Essential questions for each vendor:
Fee structure: Percentage of collections, flat monthly fee or hybrid? What's the minimum monthly charge?
Included services: Does the quote cover claims submission only, or also denial management, patient billing and payment posting?
Claim submission process: Daily submission or batched? What's their clean claim rate?
Denial management: Who handles appeals? What's their denial overturn rate?
Technology integration: Do they work inside your practice management software, or require separate logins and manual data transfer?
Reporting: What visibility do you get into claim status, aging and collections performance?
Staffing model: US-based team, offshore or hybrid? Dedicated account manager or shared support?
Contract terms: What's the minimum commitment? What's the termination notice period? Are there early termination fees?
Ask for references from practices similar to yours in size, specialty mix and payer composition. Contact those references and ask about actual costs versus quoted rates and responsiveness. Find out whether collections improved after switching.
Tap Peer Networks and Professional Resources
Your peers face identical challenges and often share pricing information when approached professionally. Non-competing practices in different markets make ideal sources for honest cost data. Building these relationships pays dividends beyond this single decision.
Ask peers about their actual monthly costs and services included versus add-on charges. Find out how responsive their provider is when issues arise. Learn whether collections improved after outsourcing.
Engage dental practice management consultants with proprietary benchmarking data. They've reviewed actual contracts across dozens of practices and can provide realistic cost expectations for your market.
Join professional associations for member-only resources. The American Association of Dental Office Management provides members access to cost surveys and peer networks that public sources can't match.
When Revenue Justifies Each Model
Your annual insurance collection volume provides the clearest starting point for this decision. Staff costs that make sense at high volume become unsustainable at lower collection levels. These thresholds help you identify which model deserves deeper evaluation.
Under $200,000-$300,000 in annual insurance collections: Full-time staff costs exceed the value they produce at this volume. You're paying $55,000-$70,000 annually (including benefits) for work that doesn't justify dedicated headcount. Outsourcing typically delivers better results at lower cost.
$300,000-$500,000 in annual insurance collections: Hybrid models work best at this revenue range. Your front desk handles patient inquiries and payment posting while you outsource complex denial management and insurance follow-up. This approach splits expertise where it matters most, allowing you to maintain direct control over routine operations while leveraging specialized capabilities for high-complexity tasks.
Over $500,000-$1M in annual insurance collections: Dedicated in-house billing staff become cost-justified at this volume. Economies of scale make the investment worthwhile. You gain direct oversight and immediate access to billing personnel.
These thresholds provide starting points for your evaluation, but your current performance also matters.
How Your Current Performance Affects This Decision
Your existing metrics reveal whether you need a billing model change or process improvements within your current structure. Poor performance doesn't automatically mean outsourcing will help. Understanding root causes guides you toward the right solution.
Evaluate where you stand using industry benchmarks from specialized dental consultants and healthcare revenue cycle experts.
Denial rate: The top 10% of dental practices achieved a 123% collection rate in 2023 according to Henry Schein One's 2024 Industry Report, which benchmarked over 2,500 practices. Practices with denial rates significantly above your regional peers face expertise gaps that specialized billing companies might solve better than entry-level in-house staff.
Collection rate: A collection rate of 98% or higher signals a healthy revenue cycle according to Dental Economics. Practices collecting well below this benchmark indicate operational problems that need addressing regardless of billing model.
Accounts receivable aging: According to Dental Economics, no more than 20% of your accounts receivable should be aged 60 days or more. Your total accounts receivable should equal approximately one month of average production (A/R ratio of 1.0).
Consider a mid-sized practice collecting $450,000 annually in insurance payments. If your denial rate sits well above your peers, you're losing significant potential revenue. That gap often indicates you need specialized expertise, not just more staff hours.
Practice complexity adds another layer. More insurance payers, higher specialty procedure volume and multi-provider credentialing increase expertise requirements. Complex practices may benefit from specialized outsourced providers even when revenue would otherwise justify in-house staff.
Making Your Decision
A structured framework prevents this decision from becoming purely emotional or reactive. Weigh each factor against your specific practice circumstances rather than defaulting to what peers have chosen. The right answer depends on your numbers, your team and your goals.
Compare in-house versus outsourced billing using this framework:
Annual Insurance Collection Volume: Calculate whether dedicated billing staff costs fall within your administrative cost benchmark of 6-8% of practice revenue. Use the revenue thresholds above as starting guidance.
Current Performance Metrics: Your collection rate should target 98% minimum. Your A/R ratio should stay at or below 1.0 (total receivables equal to one month's production). Significant gaps indicate whether you need specialized expertise or better execution of basic processes.
True Employment Costs: Budget $55,000-$70,000 annually for experienced billing coordinators when including the 25-40% benefits burden, not just base salary.
Practice Complexity: Multiple insurance payers, specialty procedure coding requirements and multi-provider credentialing increase expertise demands. High-complexity practices may benefit from outsourced specialists even when revenue would justify in-house staff.
Denial Root Causes: Review your current denial reasons. If most denials stem from coding errors or payer follow-up failures, a billing model change addresses the problem. If denials trace back to incomplete clinical documentation, you need upstream process improvements regardless of which billing model you choose.
Transition considerations: Switching billing models creates a temporary disruption. Budget 60-90 days for full transition when moving from in-house to outsourced. Expect a learning curve as new staff or vendors adapt to your payer mix and workflow. Factor transition costs into your comparison, including potential productivity loss during handoff and any contract overlap periods.
Stop Managing Billing and Start Collecting
Every hour your team spends chasing claims, managing denials and posting payments is an hour pulled away from patient care. Hiring and training billing staff creates overhead that compounds with turnover. Managing billing performance adds another responsibility to an already full workload.
Outsourced billing eliminates these burdens, but only if your provider delivers real expertise and works inside your existing systems.
Teero's remote dental billing handles claims submission, denial management, patient billing and payment posting through a dedicated team that operates directly in your practice management software. US-based billing experts submit claims daily following clean claim guidelines. You get full visibility into every claim, every verification and every patient balance through real-time reporting.
Ready to stop managing billing and start collecting? Get started with Teero's remote dental billing.