5 Signs It's Time to Outsource Dental Billing

Every dental practice reaches an inflection point where managing billing in-house can hinder growth, profitability, and patient satisfaction. Below are helpful indicators that it may be time to outsource your dental billing operations to an experienced third-party provider:

1. Delayed Payments and Increased Accounts Receivable

A healthy dental practice typically maintains an average Accounts Receivable (AR) of 30 to 45 days. When AR days extend beyond this benchmark, it reflects inefficiencies in claims submission, follow-up, or patient collections, which can significantly constrain cash flow.

High AR directly impacts your ability to reinvest in your practice, from upgrading equipment to expanding services or staffing. If your collections are consistently lagging, outsourcing can bring in a dedicated team focused solely on reducing outstanding balances, accelerating reimbursements, and optimizing cash flow.

2. High Rate of Claim Denial

The industry standard clean claim rate should be at or above 95%. If your practice falls below 85%, it's a clear sign that billing errors are undermining your revenue cycle.

Claim denials can become a financial liability. 

On average, each denial costs $25 to reprocess, not including the indirect costs of delayed revenue and administrative overhead. Denials often stem from outdated coding, missing documentation, or inadequate insurance verification—all areas where specialized billing partners can provide significant value. 

Outsourcing ensures your claims are submitted accurately and promptly, with proactive follow-up and appeals processes in place.

3. Staff Overload and Burnout Due to In-House Billing

Front office staff are the face of your practice. When they are stretched thin handling scheduling, patient intake, insurance checks, and billing, aspects of the patient experience suffer.

Over time, this workload imbalance can lead to burnout, increased turnover, and compromised service quality. 

An approach where experts handle billing off-site frees your in-house team to focus on patient engagement and clinical coordination. It also supports better hiring practices and team retention.

4. Escalating Operational Costs Without Clear Returns

The cost of in-house billing goes well beyond salaries. 

Training, benefits, software, and education in billing practices contribute significantly to your dental practice overhead, pushing the real expense to 1.5-2 times the base salary of your billing staff.

If these costs aren’t directly contributing to increased collections and cash flow, your practice is likely losing money. 

Outsourcing offers a leaner model—providing access to skilled billing professionals and advanced tools at a lower overall cost.

5. Complexity Around Compliance and Insurance

Dental billing today demands more than basic administrative skills. 

Insurance carriers frequently update their documentation requirements, CDT codes, and reimbursement policies, adding layers of complexity that can overwhelm in-house teams.

Even minor oversights, such as using outdated codes or missing payer-specific documentation, can trigger claim denials or delays. 

More serious errors may lead to audits, repayment demands, or accusations of fraud. 

Most front-office staff aren’t equipped with the time or training to stay current with these evolving requirements. Outsourced billing partners specialize in this space. They employ certified experts, stay up to date with guidance from the ADA, CMS, and insurers, and implement proactive systems to stay compliant.

Many also use advanced tools (such as AI-driven insurance verification and real-time eligibility checks) that catch issues before claims are submitted. These systems actively adapt to payer rules to reduce errors and speed up reimbursement.

As dental and medical care become more integrated, new billing challenges are also emerging. Procedures like sleep apnea appliances, oral cancer screenings, and TMD therapy may cross into medical coding territory. Experienced billing firms can help navigate these crossover claims, and unlock new revenue streams.

Beyond billing, practices must also meet OSHA, HIPAA, and infection control standards. Offloading billing responsibilities gives your team more capacity to prioritize clinical quality, patient safety, and documentation.

What Are the Benefits of Outsourcing Dental Billing?

Moving your billing to specialists offers several advantages that boost your bottom line and contribute to dental practice management:

Improved Cash Flow

Outsourced billing services typically submit claims within 24 hours of service, compared to 3–5 days for in-house teams.

Practices that outsource billing tend to improve net collections and remove days spent in A/R. This happens because specialists submit cleaner claims the first time and chase unpaid balances aggressively.

Access to Expertise

Billing companies employ specialists who handle dental insurance and coding exclusively, which is an expertise that's tough to maintain in-house.

These professionals stay current with coding changes that happen quarterly, insurance policy updates, and best practices for claim submission. Their specialized knowledge typically boosts collection rates compared to general administrative staff.

Cost Savings

Practices save about thousands of dollars yearly through outsourcing by cutting expenses for salaries, benefits, training, office space, and technology. If you cut these expenses, you can maximize practice profit, and improve your office efficiency.

6 Steps to Successfully Outsource Dental Billing 

1. Define Your Practice’s Needs and Set a Baseline

Begin by evaluating your current billing performance. Run key reports to assess:

• Monthly claims volume

• Average days in accounts receivable (AR)

• Clean claim rate

• Collections as a percentage of adjusted production

• Outstanding insurance claims segmented by 30, 60, and 90 days

These benchmarks provide insight into where inefficiencies exist and establish a baseline for measuring future success. Ideally, monitor these metrics for 2–3 months prior to making a transition, so you can identify trends and areas of risk or opportunity.

Also consider qualitative factors: Is your front office overwhelmed? Are you consistently following up on unpaid claims? This broader context helps frame the outsourcing decision in line with your operational goals.

2. Vet Potential Dental Billing Partners Thoroughly

Not all billing companies are equipped to meet the specific demands of dental practices. Look for partners with:

• Deep experience in dental billing (not just medical RCM)

• Proven success with practices of similar size or specialty

• Strong client references and case studies

• Active industry certifications and a commitment to continuing education

Ask pointed questions:

• What is their average reduction in AR days?

• What is their typical clean claim rate?

• How quickly do they resolve denials or follow up on unpaid claims?

3. Assess Technology Integration and Regulatory Compliance

Your billing partner must integrate securely with your existing systems. Confirm that they:

• Work seamlessly with your practice management software (Dentrix, Open Dental, Eaglesoft, etc.)

• Maintain HIPAA compliance with signed Business Associate Agreements (BAAs)

• Use secure, encrypted data transfer protocols

• Conduct regular internal security audits and provide breach response plans

Note that billing systems are a common entry point for healthcare data breaches. Your agreement should clearly outline data security responsibilities, breach notification timelines, and liability coverage.

4. Clarify Pricing Models and Total Cost of Service

Dental billing companies typically offer one of the following pricing structures:

• Percentage of collections (typically 4–8%)

• Flat monthly fee, based on claim volume or practice size

• Hybrid models that combine a base rate with performance incentives

While percentage-based pricing often aligns incentives with practice revenue, you should request a detailed breakdown of all fees—including any costs associated with patient statements, appeals, credentialing, or software integration.

5. Set Clear Communication Protocols

Strong communication is necessary to have a successful outsourcing relationship. Establish expectations early regarding:

• Your dedicated point of contact

• Frequency and format of reporting (e.g., weekly AR updates, monthly performance reviews)

• Response time for general questions and urgent issues

• How documentation, EOBs, and audit requests will be handled

Consider using shared dashboards or collaborative platforms to track claims and collections in real time. Weekly or biweekly check-ins are recommended during the first 90 days.

6. Track Performance and Adjust as Needed

After transitioning, continue to monitor key metrics against your original baseline:

• AR days

• Clean claim rate

• First-pass resolution rate

• Collections as a percentage of net production

Conduct monthly reviews internally and quarterly meetings with your billing partner to discuss trends and address challenges. Gathering feedback from your front desk team can also help identify workflow adjustments.

Start with a 90-day trial period that includes specific performance targets. This allows both parties to evaluate fit and results before signing a long-term agreement.

Potential Challenges and How to Navigate Them

Outsourcing dental billing offers significant benefits, but it’s important to plan for potential challenges:

• Feeling a loss of control: It’s natural to feel uneasy about handing over your billing. Maintain oversight by requesting view-only access to the billing system, so you can monitor activity without interfering. Set a regular reporting schedule and include clear performance expectations in your contract.

• Concerned about data security: Before moving forward, confirm the company has cyber liability insurance and that their staff is HIPAA-trained. Ask about their data encryption protocols and breach notification process. A recent security audit or documented procedures can offer peace of mind that your patient data is in good hands.

• Disruptive transitions: The onboarding phase may create temporary disruptions, but thoughtful planning can keep things running smoothly. Consider transitioning during a slower time of year and running your current system in parallel for the first month. Cross-train a few team members to support coordination during the handoff, and use a shared timeline to keep everyone on track.

To help maintain revenue stability during this period, it’s also a good idea to implement or reinforce a no-show policy. This keeps appointment flow steady while the new billing process settles in. Most practices see results begin to normalize after the first 30 days, with full optimization typically achieved within 60–90 days.

Improve Patient Care Through Strategic Outsourcing and Staffing Solutions

​Outsourcing dental billing can improve a practice's financial health by reducing errors and improving cash flow. However, administrative burdens, including staffing challenges, often persist, leading to staff burnout and diminished patient care.​

To address these challenges, Teero offers an easy-to-implement dental staffing solution. Our platform connects dental practices with qualified hygienists for both temporary and permanent positions, and simplifies the hiring process. See for yourself how Teero can benefit your practice today.