Who Is Actually Doing Your Medical Billing? Subcontracted vs. In-House RCM, and 20 Questions to Ask

You hired a billing company. But who is actually doing the work? The answer should be simple. Sometimes it is not. Medical billing vendors use very different staffing models. Some directly employ the people working client accounts. Others subcontract portions of the revenue cycle to separate organizations. Both models can work, but they create different questions about turnover, training, PHI access, quality control and accountability — and your practice should know who is touching its revenue cycle.

Outsourcing and subcontracting are not the same thing

When a medical practice hires an outside billing company, it has deliberately outsourced the revenue cycle. The practice can evaluate the organization it hired: its leadership, experience, security, reporting, contract and performance. Subcontracting adds another organizational layer. A primary billing company may assign part of the work to a separate organization that employs its own staff and manages its own operations.

Subcontracting can be legitimate. Hidden subcontracting is where transparency starts to matter.

How AMS staffs client accounts

AMS Solutions does not hand client billing operations to an unrelated third-party billing company. The people working AMS accounts are AMS employees who operate inside our management structure: AMS hires them, trains them, supervises them, evaluates their performance, manages their system access, performs quality control, owns escalation and owns the result. That is what we mean by in-house — the work is performed by AMS employees, not by a white-labeled third-party billing vendor. Our team is an in-house global team, US-led, and the company has been physician-founded and Dallas-headquartered since 1992.

We do not subcontract the accountability we were hired to assume. If something goes wrong, there is no outside billing company for AMS to point at. The work carries our name, so the responsibility belongs to us.

Why this matters to me personally

Most of the guides I write for AMS are intentionally written from an organizational perspective. This one is different.

Before joining AMS, I worked for a healthcare organization that outsourced its medical billing. Over time, one of my responsibilities effectively became policing the billing company we had hired to do the work. There was repeated turnover among the people working our account. New people had to learn our practice, providers, payer mix, recurring problems, workflows and expectations. Mistakes happened. Institutional knowledge disappeared when people left. Problems that should have been recognized quickly had to be rediscovered.

We hired a company to reduce the burden of managing billing. Then we had to dedicate internal resources to managing the company that was supposed to be managing the billing. That experience changed the question for me. It is not simply “Should we outsource billing?” It is: who is actually doing the work, who manages them, and who is accountable when something goes wrong?

The lesson was accountability, continuity and control — not geography

There are talented revenue-cycle professionals all over the world. Geography was never the lesson. A directly employed member of a billing company’s workforce and an employee of an unrelated subcontractor are different operating relationships. The issue is not the employee’s nationality; it is the management and accountability chain around the work.

For the related question of onshore versus offshore staffing, see US-based vs. offshore medical billing.

Why billing companies subcontract work

Usually the answer is economics and scale. Third-party outsourcing can give a company access to lower-cost labor, rapid capacity, extended working hours and standardized task processing without building the entire workforce internally. Those can be legitimate advantages. The practice simply needs to understand the tradeoff: lower operating cost for the vendor does not automatically mean lower operational risk for the client. A subcontracted model can perform extremely well when the primary vendor has strong contracts, low turnover, transparent staffing, mature security controls, strong QA and direct oversight. The model itself is not the verdict. The controls are.

Turnover is not just an HR problem

An experienced biller gradually learns a practice in ways that are difficult to capture completely in a procedure manual: provider-specific billing patterns, payer behavior, common denial patterns, contract quirks, credentialing issues, location-specific issues, escalation paths and the solutions already attempted. When that person leaves, a replacement can be capable and still require time to rebuild context. Documentation and SOPs reduce the impact, but every turnover event creates some degree of institutional-memory reset. When the staffing model experiences repeated churn, the practice can become the keeper of institutional knowledge that the billing company was hired to maintain.

High-turnover outsourcing markets deserve extra due diligence

India is one of the world’s largest technology and business-process services markets. The workforce is sophisticated and enormous, but several outsourcing-oriented sectors have also reported meaningful employee churn.

The same data show why geography alone is a poor shortcut: mature operating models retain talent far better than broad market averages. So do not ask only “Is work performed in India?” Ask: what is the turnover rate on the team actually performing our work, and how do you protect continuity when someone leaves? Sources: EY, Future of Pay 2024; Future of Pay 2024-25; Future of Pay 2026; GCC Pulse Survey 2025. Sector and survey populations differ, so treat the figures as context rather than a universal rate.

Ask about account-level turnover, not just company turnover

A corporate retention statistic can look impressive while telling you very little about the people touching your account. Ask: How many people worked this function on our account in the last 12 months? How long has the average team member been with your organization, in medical billing, and in our specialty? How often are employees moved between accounts? What happens when our primary biller leaves, how much overlap occurs before a replacement takes over, and who retains account knowledge during transitions? Every billing professional has to learn somewhere. The concern is when the practice repeatedly absorbs the cost of a staffing model built around constant replacement.

The skills gap is about judgment, not intelligence

Medical billing contains different levels of work. Many tasks can be standardized and trained efficiently. Other parts of revenue-cycle management depend heavily on judgment, pattern recognition and experience.

Consider a payer that suddenly begins denying a service that historically paid. A strong RCM professional may need to determine whether the issue involves coding, modifiers, authorization, credentialing, location setup, contract configuration, claim routing or payer processing. That is not simple task completion. That is judgment. So ask who analyzes denial trends, who reviews payer behavior, who monitors A/R deterioration, who connects billing issues to credentialing, who decides when an issue needs escalation and who communicates findings to practice leadership. If the answer to every question is “your account manager,” ask how much of the underlying work that person actually sees.

The PHI question: what HIPAA says about subcontractors

Medical billing professionals may access patient names, dates of birth, diagnoses, procedures, insurance information, medical records and other protected health information. Under HIPAA, a billing company handling PHI for a covered healthcare provider is generally a business associate — and HHS states that a subcontractor that creates, receives, maintains or transmits PHI on behalf of a business associate is itself a business associate. Subcontracting does not make HIPAA obligations disappear; it extends the compliance chain. HHS requires a business associate to ensure that subcontractors with PHI access agree to the same applicable restrictions, conditions and safeguards, and contracts between business associates and downstream subcontractors are subject to those requirements.

The HHS Security Rule also requires workforce security and information-access management controls so that people working with ePHI have appropriate authorization, supervision and role-based access. When a third party performs the work, understand exactly who approves access to the EHR, practice-management system, payer portals and clearinghouse; who limits access by role; who removes access after termination; who audits it; and whether the primary billing company controls those decisions directly. Sources: HHS, Business Associates; HHS, Business Associate Contracts; HHS, Summary of the HIPAA Security Rule. Subcontracting is expressly contemplated by HIPAA; the question is whether the relationship is transparent, appropriately contracted, securely managed and subject to meaningful oversight.

Who trains and audits the person working your account?

Training and QA are where staffing models become real. Ask who owns them, not whether they exist. Training: who hires, what experience is required, who provides specialty training, how competency is tested, who coaches after an error. Quality: who audits claims, who reviews posting accuracy and write-offs, who audits denials, who performs independent QA. “The subcontractor told us quality is good” is not quality assurance. If subcontractors are involved, ask whether the primary billing company conducts its own independent review or simply relies on reports generated by the subcontractor.

Productivity can become the wrong incentive

High-volume operations naturally measure productivity. But revenue-cycle performance cannot be reduced to accounts touched, claims worked, calls completed or tickets closed. An employee touches 75 A/R accounts — but were balances resolved, payer errors identified, deadlines protected, appeals filed? Consider an account history that reads: Week 1, checked payer portal, claim pending. Week 3, still pending. Week 5, claim remains pending. Week 7, called payer, processing. Touches are easy to count; judgment is harder. An experienced biller asks whether the claim has exceeded normal processing time, whether information is missing, whether similar claims are affected and whether a filing or appeal deadline is approaching.

The hard money is where the difference shows

Almost anyone can process the happy path: clean claim, correct payer, correct provider, correct coding, payment arrives. Revenue-cycle expertise becomes visible when the claim does not pay — complex denials, appeals, chronic payer problems, credentialing-related denials, underpayments, recoupments, authorization issues, A/R over 120 days, timely-filing threats and contract discrepancies. Ask who handles the hard money, then ask who employs them. A domestic account manager does not answer that question by itself.

20 questions to ask before hiring a billing company

1. Are the people working our account employees of your company?
2. Do you subcontract any part of our billing operation?
3. Which functions are subcontracted?
4. Does another company employ anyone who will access our systems?
5. How many people have worked our function during the last year?
6. What is turnover like on the team handling our account?
7. How much medical-billing experience does the team have?
8. How much experience do they have in our specialty?
9. Who handles complex denials and escalations?
10. Who analyzes payer and A/R trends?
11. Who directly supervises the people doing our work?
12. Who provides training?
13. Who performs QA?
14. How are errors documented and corrected?
15. Who can terminate access immediately?
16. If subcontractors are used, who are they?
17. Are downstream subcontractors permitted?
18. Will we be notified before work moves to another subcontractor?
19. Are appropriate Business Associate Agreements in place?
20. How do you independently audit subcontractor security and performance?

Red flags and the follow-up question for each

A “no” to direct employment is not automatically disqualifying. It should simply lead to a deeper conversation about the operating model. There are excellent outsourcing organizations and secure subcontracting models; a mature vendor will have transparent subcontractor relationships, appropriate BAAs and security controls, low and monitored turnover, specialty training, independent QA, clear escalation paths, defined access controls and documented continuity plans. If the model is good, the vendor should be comfortable explaining it. You should not discover who is performing the work only after an error, data incident or staffing problem occurs.

Oversight is responsible. Doing the vendor’s management job is not.

A medical practice should absolutely monitor its billing company — review reporting, A/R, denials, collections, write-offs and performance. But there is a difference between oversight and having internal staff constantly rescue the vendor: finding missed claims, catching repeated posting errors, identifying obvious denial patterns, reminding billers to follow up, teaching replacement staff the account, rebuilding institutional knowledge after turnover. You hired help. You should not have to become the help desk for the help you hired. That is the operational leverage outsourced medical billing is supposed to create: less time managing individual billing tasks, with better visibility into the revenue cycle.

Ask your current billing company

You do not have to wait until you are shopping for a replacement. Ask the company you have today: Who actually performs our billing? Are those people your employees? Is any portion subcontracted? Who works our A/R, our denials, our payment posting? Who has access to our EHR, and how long have those people been on our account? How much turnover have we experienced? Who performs quality assurance, who owns escalation, and who is ultimately accountable? A good partner should be comfortable answering those questions.

The AMS answer

Before hiring a medical billing company, ask: who actually does my billing? Not who the salesperson is, where the account manager sits, or which logo is on the proposal — who performs the work, who employs them, who trains them, who manages them, and who owns the result. At AMS Solutions, the people performing client billing work are AMS employees. We do not subcontract client billing operations to third-party billing companies. That gives us direct responsibility for hiring, training, management, quality assurance, access, performance and escalation, across medical billing and credentialing under one roof. When you put the AMS name on a revenue cycle, we believe AMS should be responsible for the result.

Want to know who would work your account? Start with a no-obligation billing and revenue-cycle review or call (866) 488-6308.

FAQs

What is the difference between outsourcing and subcontracting medical billing?

Outsourcing is the practice’s decision to hire an outside billing company, which the practice can evaluate directly. Subcontracting is when that billing company assigns part of the work to a separate organization with its own employees and management — a company the practice usually did not evaluate and may not know about.

Is it legal for a medical billing company to subcontract work involving PHI?

Yes. HIPAA expressly contemplates it: a subcontractor that creates, receives, maintains or transmits PHI on behalf of a business associate is itself a business associate, and the primary billing company must ensure the subcontractor agrees to the same applicable restrictions and safeguards through a business associate agreement. The question is whether the arrangement is transparent, contracted and overseen.

How can I find out whether my billing company subcontracts?

Ask directly: “Are the people working our account employees of your company, and do you subcontract any part of our billing operation?” Then ask which functions, who the subcontractor is, whether downstream subcontractors are permitted, and whether you will be notified before work moves. A vendor with a sound model will answer comfortably.

Does AMS Solutions subcontract client billing work?

No. The people working AMS client accounts are AMS employees; AMS does not hand client billing operations to a third-party billing company. AMS hires, trains, supervises, controls system access for, and performs quality assurance on its own team, so accountability for the result stays with AMS.

Why does billing-team turnover matter so much?

An experienced biller carries knowledge of a practice’s providers, payer behavior, denial patterns, contract quirks and prior fixes that a procedure manual cannot fully capture. Each departure resets some of that institutional memory, and with repeated churn the practice ends up re-teaching its own account to the vendor’s replacements.

About the author. Brad Becker, CRCR, is Regional Billing Manager at AMS Solutions, a physician-founded medical billing and credentialing company headquartered in Dallas since 1992. This article is an operational resource, not legal advice; practices should review vendor agreements, BAAs, security requirements and applicable law with appropriate legal and compliance professionals.