Ultimate Guide to Outsourcing Your Dental Billing

Outsourcing billing is useful for solo practitioners and growing clinics alike, with more dentists now turning to professional billing services to improve collections, reduce overhead, and reclaim their time. 

In this guide, we’ll walk you through everything you need to know about outsourcing your dental billing, from the benefits and drawbacks to choosing the right partner and estimating costs.

What Is Dental Billing Outsourcing?

At its core, dental billing outsourcing means hiring a third-party company to handle your revenue cycle management. Instead of assigning a staff member or doing it yourself, you delegate tasks such as:

• Insurance verification
• Claim creation and submission
• Payment posting
• Denial management and appeals
• Patient billing and collections

These services are typically performed offsite, using secure cloud-based systems that integrate with your practice management software (PMS). The goal is to streamline and simplify the process so you can focus on patient care, not paperwork.

Outsourcing is different from hiring an in-house billing coordinator. With in-house staff, you manage payroll, training, and performance. With an outsource dental payment processing provider, you pay a service fee for expert help and performance-based results.

Why Dental Practices Choose to Outsource Billing

Dental billing is complex. Insurance policies vary, coding rules change, and staff turnover can leave your front desk in chaos. Here are the main reasons practices choose to outsource:

Reduce Denials and Errors

Professional billing companies specialize in accurate coding, timely submissions, and proactive follow-ups. They understand insurance quirks and appeal processes, which translates to more accepted claims and faster payments.

Save Time

Billing can take hours each week. By outsourcing, dentists and staff gain valuable time for patient care, follow-ups, and business development.

Improve Cash Flow

Many practices see a boost in monthly collections because of reduced errors, consistent follow-up, and faster reimbursements.

Scale More Easily

If you’re expanding your practice or opening additional locations, outsourcing helps you avoid the cost and hassle of hiring more staff.

Lower Overhead

Hiring and training billing staff can cost thousands. Outsourcing can be more cost-effective, especially for small or mid-sized practices.

Pros and Cons of Dental Billing Outsourcing

Let’s weigh the pros and cons before you jump into outsourcing:

Pros

• Increased revenue collection: Billing specialists stay on top of claims and follow-ups.
• Expertise: Get access to certified, trained dental billers.
• Administrative relief: Reduce workload for your front desk or office manager.
• Faster turnaround: Many claims are submitted and paid more quickly.

Cons

• Less control: You won’t have billing staff onsite, which may feel like a loss of oversight.
• Security risks: You’ll need to vet partners for HIPAA compliance and data security.
• Adjustment period: Your team may need time to adapt to the new process.

What to Expect From a Dental Billing Outsource Company

A reputable dental billing outsource company offers more than just claim submissions. You should expect:

• Seamless integration with your existing PMS and EHR software
• Regular performance reporting (collections, outstanding claims, etc.)
• Dedicated account managers or billing teams
• Onboarding and staff training support
• Transparent pricing with no hidden fees

Good companies act as an extension of your team, not just a faceless vendor.

How to Choose the Right Outsourcing Partner

Not all billing companies are created equal. Here’s what to look for:

• Industry Experience: Choose a partner that specializes in dental billing, not just general medical billing.
• Software Compatibility: They should know how to work with your practice management system (Dentrix, Open Dental, Eaglesoft, etc.).
• Clear Pricing: Are they charging a flat monthly fee, or a percentage of collections? What’s included?
• Support and Service: Do they offer responsive support? Do they guarantee turnaround times or results?
• HIPAA Compliance: Ask about encryption, secure access, and data privacy policies.

Costs of Outsourcing Dental Billing

How much should you expect to pay? Most dental billing outsourcing services use one of the following pricing models:

• Percentage-based: Typically 4–10% of monthly collections. Ideal for smaller practices with fluctuating volume.
• Flat fee: A set monthly fee (e.g., $1,000–$2,500) for specific services.
• Hybrid: A base fee plus a performance bonus.

Here are the common inclusions:

• Claim submissions and tracking

• Denial management and appeals
• Patient invoicing and billing
• Insurance aging reports
• Monthly performance dashboards

When comparing costs, don’t forget to factor in what you’re currently paying for in-house billing, such as salary, taxes, benefits, and training. Over time, outsourcing often has a better return on investment (ROI).

How to Transition to an Outsourced Billing System

Making the switch is easier than you think, but preparation is crucial.

Step 1: Assess Your Current Process

What’s working? What’s not? Identify areas of inefficiency (delayed claims, aged receivables, etc.).

Step 2: Prepare Your Team

Inform staff, set expectations, and explain how the transition will help streamline their work.

Step 3: Onboard with Your Billing Partner

You’ll typically share:

• Practice info and provider credentials
• PMS access and EHR data
• Recent billing reports and open claims

Expect an onboarding period of 1–3 weeks to get fully operational.

Step 4: Monitor and Adjust

Check reports regularly. Stay in touch with your billing team to fine-tune processes and address concerns.

Whether you’re running a solo clinic or scaling to multiple locations, outsourcing billing can help you take back control of your time—and your finances.

If you’re still debating how much does it cost to start a dental practice, outsourcing billing early on can actually help you manage startup costs better and avoid cash flow hiccups. With a reliable payment processing provider and the right dental merchant accounts setup, you’ll be running a more efficient, profitable practice in no time.

Frequently Asked Questions (FAQ)

Is it safe to outsource dental billing?

Yes, when working with HIPAA-compliant companies that use secure platforms and encryption.

How quickly will I see results after outsourcing?

Most practices notice improved collections and fewer denied claims within 1–3 billing cycles.

Will I lose control over my practice’s finances?

No, reputable outsourcing firms provide full transparency and detailed reporting.

Do I need to change my practice management software?

Not necessarily, many billing companies integrate with popular dental PMS platforms.

Can small practices benefit from outsourcing too?

Yes, especially if they lack the staff or expertise for consistent, accurate billing.

References

American Dental Association. (2022). Survey of dental practice: Income from operations. https://www.ada.org/resources/research/health-policy-analysis/survey-of-dental-practice 

Dental Economics. (2021). Outsourcing dental billing: Is it the right move for your practice?https://www.dentaleconomics.com/money/article/14201544/outsourcing-dental-billing-is-it-the-right-move-for-your-practice Henry Schein One. (2023). Improving dental practice efficiency through outsourcing. https://www.henryscheinone.com/resources/articles/improving-dental-practice-efficiency-through-outsourcing