Market Size & Trends

The US medical billing outsourcing market is expected to reach USD 6.28 billion by 2024, with a projected CAGR of 12.00% from 2025 to 2030. As healthcare providers face significant challenges in managing their claim and reimbursement processes, the demand for outsourced medical billing services is on the rise. With an increasing patient load and the need to address a growing records and bills burden, medical practitioners are turning to outsourcing as a solution to alleviate revenue losses. By outsourcing medical billing, hospitals can focus on providing quality patient care while relying on specialized third-party providers to handle administrative tasks. This strategic shift is driving market growth as healthcare organizations seek more efficient ways to manage their operations.

 

Furthermore, hospitals often partner with companies that possess in-depth understanding of the Affordable Medical Care Act, Medicaid, and other healthcare and insurance programs. The healthcare industry is also witnessing a rise in outsourcing billing activities by physicians and hospitals, largely due to the mandatory implementation of ICD-10 coding structure, increasing care costs, and regulatory pressure to adopt electronic medical records. This presents complex challenges for medical services in terms of accurate billing and precise payment, which is expected to drive demand for innovative Revenue Cycle Management (RCM) solutions. The availability of advanced RCM solutions offered by well-established third-party service providers can enable healthcare organizations to capitalize on the economic value and efficacy of these RCM solutions while simultaneously prioritizing patient care improvements.

While outsourcing billing services offers numerous benefits, including streamlined claims settlement processes and access to experienced coders familiar with current medical codes, a pressing concern remains the elevated risk of data breaches in the medical billing industry. The Department of Health and Human Services Office for Civil Rights (OCR) reported over 500 data breach incidents in 2024, as per its annual Healthcare Data Breach Report published in January 2025.

The COVID-19 pandemic had far-reaching implications for the medical billing industry, presenting both opportunities and challenges. The introduction of new coding systems, such as Current Procedural Terminology (CPT) and diagnosis codes for COVID-19 billing, added complexity to the billing process for healthcare providers. However, the shift towards Revenue Cycle Management (RCM) gained significant momentum during this period. A survey conducted by AKASA in April 2021 revealed that approximately 75% of health systems in the US had deployed RCM solutions by the end of 2020, indicating a notable increase in its adoption rate.

Market Concentration & Characteristics

The dynamics at play in a concentrated industry can be better understood by examining its relationship with key characteristics that shape its landscape. The chart illustrates this dynamic, where industry concentration is plotted against various industry attributes such as competition levels, partnership & collaboration activities, innovation degrees, regulatory impacts, and regional expansions. In a highly consolidated market, the presence of dominant players holds sway. This results in a competitive environment where companies must continually innovate to stay ahead. As a consequence, innovation levels are elevated, reflecting an industry's ability to adapt and evolve. Meanwhile, moderate merger & acquisition activity underscores the strategic shifts that occur when industry concentration increases. Regulatory environments, however, exert considerable influence on industries with significant consolidation. High regulatory impacts can either stifle or facilitate growth, depending on how effectively they address industry challenges. Lastly, regional expansions demonstrate an industry's desire to expand its reach beyond geographical boundaries. By examining these interdependencies, businesses and policymakers can gain a deeper understanding of the complex forces shaping their industry landscape.

Several industry players are continually expanding their product offerings to bolster their portfolios. For example, in February 2023, Experian Health introduced AI Advantage, a tailored solution specifically designed to address the increasing problem of healthcare insurance claims denials. This innovative system harnesses the power of artificial intelligence and combines Experian's expertise in big data solutions to offer an integrated and comprehensive approach to claims management within the healthcare sector.

 

The industry is witnessing a moderate surge in merger and acquisition activities driven by several prominent players seeking to bolster their market position and stay ahead of the curve. This strategic move enables companies to leverage each other's strengths, expand their technological capabilities, and capitalize on the growth opportunities presented by an increasingly competitive landscape. For example, in September 2024, The Rawlings Group, Apixio Payment Integrity, and VARIS joined forces to establish a pioneering platform that prioritizes accurate and reliable payments in healthcare, ultimately enhancing patient care and operational efficiency.

Regulatory environments have a profound impact on the market, with frequent policy updates and changes often leading to hindered growth prospects. The relatively low adoption rate of Revenue Cycle Management (RCM) can be attributed to evolving regulatory landscapes, healthcare organizations' unique demands, and varied reimbursement policies across the U.S. However, as digital healthcare solutions continue to gain traction and the need for efficient RCM becomes increasingly pressing, the market is poised for substantial growth in the years to come.

The healthcare industry is experiencing moderate regional growth, fueled by the expanding demand for medical billing and RCM solutions. Notably, in September 2024, Tritent International Corp. and Burst Technologies, Inc. collaborated on a Memorandum of Understanding (MoU) to develop AI-driven healthcare billing solutions specifically tailored for U.S. nursing homes.

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Component Insights

The outsourced segment dominated the market with a significant revenue share of 58.90% in 2024 and is poised for rapid growth over the forecast period. By outsourcing medical billing services, small and medium-sized practices can substantially alleviate financial burdens, allowing them to better manage their finances. Many hospitals and independent physicians are opting for this service to minimize healthcare costs, increase profit margins, and foster stronger patient-physician relationships. Moreover, doctors are unable to devote their full attention to delivering high-quality care due to the administrative tasks involved in recovering claims and bills. To prioritize medical care, large hospitals have started outsourcing these services, enabling them to focus on providing exceptional patient experiences.

As the healthcare industry continues to evolve, many companies are shifting towards cutting-edge cloud-based medical billing solutions to safeguard patient data and streamline operations. For instance, MyMedicalBillingService.com has recently launched a comprehensive medical billing platform catering to healthcare providers across the United States. By leveraging the cloud, these firms can significantly enhance security measures, reducing the risk of data breaches and protecting sensitive information. Furthermore, outsourcing medical billing services offers numerous benefits, including substantial cost savings by eliminating the need to hire an accounting team. This not only reduces labor costs but also eliminates the requirement for ongoing training and staff development, thereby saving additional expenses associated with personnel management and professional development.

Service Insights

In 2024, the front-end services segment accounted for a significant revenue share of 38.60%, underscoring its importance in driving business growth. This segment encompasses a range of critical services including scheduling, pre-registration, registration, eligibility verification, insurance verification, and pre-authorization. By effectively managing these services, organizations can significantly reduce repetitive workloads, enhance patient satisfaction through streamlined processes, and ultimately drive improved operational efficiency. Consequently, the demand for outsourcing front-end services remains robust, as companies seek to maximize their resources and minimize unnecessary labor expenditures.

The growth of middle-end services is expected to accelerate in the coming years, driven by the emergence of new market players, heightened awareness among healthcare practitioners, and growing adoption rates. As a result, claims denials due to suboptimal claim management processes are likely to rise, placing additional pressure on front-end service providers. In response, there will be an increasing need for back-end services, which can help alleviate the burden on their counterparts.

End-use Insights

The hospital sector dominated revenue generation with 46.95% share in 2024, primarily due to high claim volumes. Consolidation within the hospital network has further complicated billing and reimbursement procedures, driving segment growth. Hospitals are increasingly leveraging revenue cycle management (RCM) services to minimize errors and reduce costs. By partnering with vendors, they're pioneering innovative RCM solutions that aim to revolutionize reimbursement processes. As a result, this is likely to enhance segment growth. Furthermore, hospitals are prioritizing process optimization to boost efficiency and productivity. For example, Allied Digestive Health formed a strategic alliance with athenahealth in December 2021, integrating medical billing and patient engagement services to streamline their operations. This partnership seeks to refine billing processes and patient interactions, ultimately leading to better healthcare delivery and enhanced patient satisfaction within the organization.

 

The physician office sector is poised for accelerated growth over the forecast period, driven primarily by an increase in expenditures on healthcare services delivered by small to mid-sized practitioners. This trend is largely attributed to an enhanced focus on risk management and regulatory compliance, as well as the intricacies of technology and staffing requirements. As physicians strive to adapt to evolving government regulations and expanding service offerings, a significant proportion are opting for Revenue Cycle Management (RCM) solutions at their facilities.

Key U.S. Medical Billing Outsourcing Company Insights

Industry heavy-hitters in the U.S. medical billing outsourcing market are bolstering their positions with targeted efforts, aimed at expanding their customer base and enhancing the breadth of their offerings. Strategic initiatives, including strategic acquisitions and collaborations, are driving growth by increasing market visibility and reach.

Key U.S. Medical Billing Outsourcing Companies:

• R1RCM Inc.
• Veradigm LLC (Allscripts Healthcare, LLC)
• Oracle (Cerner Corporation)
• eClinicalWorks
• Kareo, Inc.
• McKesson Corporation
• Quest Diagnostics
• Promantra Inc.
• AdvancedMD, Inc.

View a comprehensive list of companies in the U.S. Medical Billing Outsourcing Market

Recent Developments

• In February 2025, Athelas partnered with Resilient Healthcare to streamline outpatient care and hospital billing processes. 

• In November 2024, a startup founded by Brown University students, Kyron Medical, aims to revolutionize medical billing using AI.

• In May 2024, SmarterDx raised USD 50 million in Series B funding to enhance its clinical AI platform, which automates medical billing processes for hospitals. By analyzing over 30,000 data points per patient visit, it improves billing accuracy and reduces claim denials, helping healthcare providers recover millions in lost revenue.

• In March 2022, Connecticut Children's Hospital started implementing Nym's coding technology. This innovative system aims to automate medical billing processes, enhancing patient care journeys by streamlining administrative tasks and allowing healthcare providers to focus more on patient needs.

• In January 2022, R1RCM Inc. entered into a definitive agreement to acquire Cloudmed. The deal was worth USD 4.1 billion and is expected to enter into an 18-month lock-up agreement.

U.S. Medical Billing Outsourcing Market Report Scope

Report Attribute	Details
Revenue forecast in 2030	USD 12.26 billion
Growth rate	CAGR of 12.00% from 2025 to 2030
Actual data	2018 - 2024
Forecast period	2025 - 2030
Quantitative units	Revenue in USD million/billion, and CAGR from 2025 to 2030
Report coverage	Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Segments covered	Component, service, end-use
Country scope	U.S.
Key companies profiled	R1RCM Inc.; Veradigm LLC (Allscripts Healthcare, LLC); Oracle (Cerner Corporation); eClinicalWorks; Kareo, Inc.; McKesson Corporation; Quest Diagnostics; Promantra Inc.; AdvancedMD, Inc.
Customization scope	Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope.
Pricing and purchase options	Avail customized purchase options to meet your exact research needs. Explore purchase options

U.S. Medical Billing Outsourcing Market Report Segmentation

This comprehensive forecast assesses revenue growth and delves into the current state of industry trends across key sub-segments between 2018 and 2030. Grounded in meticulous research, our analysis segments the U.S. medical billing outsourcing market by component, service, and end-use to provide actionable insights for stakeholders.

• Component Outlook (Revenue, USD Million, 2018 - 2030)

  • In-House

  • Outsourced

• Service Outlook (Revenue, USD Million, 2018 - 2030)

  • Front-end Services

  • Middle-end Services

  • Back-end Services

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • Hospitals

  • Physician Offices

  • Others