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.
More than three-quarters of health systems are currently unable to fill essential revenue cycle roles. That vacancy doesn’t disappear. It shows up in your AR aging report.
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. Coding errors that a more experienced specialist would catch get submitted, denied, and added to the rework pile.
MGMA data shows that one in three medical groups failed to meet productivity targets in 2023, with staffing cited as the primary cause. 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 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.
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
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 under time pressure and lacking specialty-specific expertise, the instinct is to code conservatively. That conservatism is not compliance. It is permanent, unrecoverable revenue loss on work that was already done.
Organizations without a formal revenue integrity program typically lose 3 to 8% of net collectible revenue to undercoding, missed charges, and unrecovered denials. For a 10-physician surgical group generating $5 million in allowable charges annually, the difference between a 94% and a 97% net collection ratio is $150,000 per year — 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. Certified coders command higher compensation. The pool of qualified candidates is limited. 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.
- No vacancy riskWhen an outsourced team member leaves, that is the partner’s operational problem. Your billing does not pause while someone posts a job listing.
- Specialty coding depthA generalist biller cannot maintain expert-level knowledge across every specialty’s coding rules and payer-specific requirements. A dedicated RCM partner can and does.
- Denial management as a core functionUp to 65% of denied claims are never resubmitted by in-house teams that are stretched thin. An outsourced partner works denials systematically because that is the job, not an afterthought.
- Scalability without recruitingNew provider, new location, volume spike? An outsourced partner scales without a three-month hiring timeline and onboarding curve.
- Compliance stays currentIn 2024 alone, CMS introduced 395 new ICD-10 codes and 230 new CPT codes. Keeping current is a full-time function, not something a billing generalist can layer onto existing responsibilities.
- Cost structure converts to variableFixed salaries, benefits, and training costs become a percentage of collections. The overhead scales with revenue instead of running regardless of performance.
You Don’t Have to Go All-In to Find Out
The most common objection to outsourcing RCM is concern about disruption. 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.
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.
According to Black Book Research’s Q2 2025 survey, 91% of large physician groups plan to expand or initiate third-party RCM partnerships within the next year, up from 68% in 2023. Among current outsourcing users, 77% called their partner crucial to financial sustainability.
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.