AI-automated: software plus people

Formula

Not implemented on January 1, 2026; CMS will reevaluate

For epidural steroid injections, it asks for radiculopathy, radicular pain or neurogenic claudication supported by history, exam and imaging; at least 4 weeks of pain with failed or poorly tolerated conservative care; a baseline pain or function scale repeated at follow-up; no more than four sessions per spinal region in a rolling 12 months; and the planned image guidance, approach and levels.

Each request covers one WISeR service and must include:

Physician name, NPI, PTAN and address, plus the requester’s contact details

• Whether it is an initial request or a resubmission, and whether expedited review is needed and why

• Clinical documentation that meets the NCD or LCD criteria

• Perform within 120 days and report the UTN on the claim

Fix gaps and resubmit, request peer-to-peer review, or issue an ABN if the patient proceeds

1. Billed the health plan instead

In Texas, confirm the employer has coverage, since coverage is optional for most private employers.

There are three broad ways to run billing in an independent orthopedic practice: an in-house team, an outsourced billing company, or software that automates parts of the work with AI while people handle the rest. Each can work. The right choice depends on your size, payer mix, and how much control you want over data and decisions.

Interest in changing models is real. In a November 19, 2024 MGMA Stat poll (352 responses), 36% of practice leaders said they would outsource or automate part of their revenue cycle in 2025. This comparison is neutral and names no vendors. It uses public wage data, federal rules and published surveys, and it flags where you will need quotes.

What does each billing model cost?

In-house: salaries, benefits and overhead

Staff drive the cost of in-house billing. The Bureau of Labor Statistics reports a May 2025 median annual wage of $51,140 for medical records specialists, the occupation that includes medical coders, and $48,500 for billing and posting clerks. In physicians’ offices specifically, the medians were $47,120 and $47,570.

Benefits add to that. In June 2026, benefits made up 31.3% of employer compensation costs for private-industry office and administrative support workers. At that ratio, a $48,500 salary implies roughly $70,600 in total compensation per person, before software, clearinghouse fees, training and supervision. Staff costs are also rising as a share of orthopedic revenue: AAOE reports staff cost as a percentage of revenue rose from 31% in 2020 to 36.6% in 2024 among practices in its survey.

Outsourced: a percentage of collections

Billing companies often charge a percentage of collections. A 2015 Physicians Practice article put the typical range at 4% to 8% of collections; treat that as a dated reference point and get current written quotes. What the fee covers matters more than the rate. Coding, charge entry, appeals, patient statements, credentialing, old A/R cleanup, and workers’ comp or personal-injury follow-up may be included or billed separately.

Percentage fees also carry compliance questions. The OIG’s 1998 compliance guidance for third-party billing companies, now archived but still available, said OIG had a longstanding concern that percentage arrangements may increase the risk of upcoding. Build coding audits into any contract, and have counsel review the fee structure under your state’s rules.

AI-automated: software plus people

AI-automated billing tools can read documentation, suggest codes, check claims against payer and NCCI rules before submission, and draft appeals, while staff handle exceptions and judgment calls. Ask whether pricing is per provider, per encounter, per claim or a percentage, and what implementation and integration cost. Budget for review time: in Experian Health’s 2025 survey, providers said 90% of denied claims are reworked with at least some human review.

To compare all three fairly, use HFMA’s cost-to-collect formula: total revenue cycle cost divided by total patient service cash collected. HFMA counts salaries and benefits, outsourced arrangements, software fees, contingency fees and transaction fees as revenue cycle costs.

How do the three billing models compare?

How much control and visibility will you have?

With an in-house team you can see every claim and decision. With a vendor, visibility is only as good as the contract: which KPIs are reported, how they are defined, and whether you can pull raw data yourself. Ask for the core metrics defined the way our orthopedic RCM benchmarks guide describes them, including denial rate by count and by dollars, and for read-only access to the systems where the work happens.

Who brings the orthopedic expertise?

Orthopedic billing has its own pressure points. Medicare’s 90-day global surgical package and the modifiers that go with it, NCCI edits on same-session procedures, braces billed to a DME MAC instead of your Part B MAC, workers’ compensation rules that vary by state, and personal-injury cases paid from a judgment or settlement all need specific know-how. Whoever does the work should show how they handle each one. Ask for orthopedic client references and sample reports by payer class, and see our workers’ comp billing guide for that payer class.

How do scalability and turnover risk differ?

An in-house team grows one hire at a time, and knowledge leaves when people do. In a May 26, 2026 MGMA Stat poll (303 responses), 29% of practice leaders said staff turnover was higher than the year before, and some of them pointed to billing and revenue cycle departures. In Experian Health’s 2025 survey, 43% of providers reported being understaffed.

Outsourcing moves staffing risk to the vendor, but you still need someone inside who understands the numbers. AI tools reduce manual volume, not the need for trained reviewers.

What technology and data access should you expect?

Your billing data is a practice asset. Ask where the work happens: in your own EHR and practice management system or in a vendor platform. Make sure you can export claim, remittance and adjustment data on demand, in a usable format, during the contract and after it ends.

For AI tools, ask how they connect to your EHR, what they can change without a human, and whether every suggestion and edit is logged. Adoption is still early: Experian found that only 14% of providers were using AI to reduce denials in 2025.

What do HIPAA and compliance require?

A billing company, coding service or AI vendor that handles PHI on your behalf is a business associate. HIPAA’s definition expressly lists billing and claims processing, and it extends to the vendor’s subcontractors. Your business associate agreement must, among other things, limit how the vendor uses PHI, require safeguards and breach reporting, bind subcontractors to the same terms, and require return or destruction of PHI when the contract ends.

Responsibility is shared, not transferred. Claims still go out under your practice’s billing NPI, and the OIG’s billing-company guidance recommended that contracts spell out which functions are shared and which belong to each party. Confirm the details with your compliance counsel.

How long does implementation take?

Timelines depend on scope, so ask every vendor for a written plan with milestones. In-house changes hinge on hiring and training. Outsourcing usually involves system access, clearinghouse and remittance setup, payer enrollment updates where needed, and a plan for who works the existing A/R. AI tools depend on EHR integration, rule configuration and changes to staff workflow.

Whatever you choose, run old and new processes in parallel long enough to confirm that days in A/R and clean claim rate hold steady.

Which model fits a practice of your size?

1 to 3 surgeons

• One or two in-house billers can work, but cross-train or arrange backup so one absence does not stop cash flow.

• Outsourcing can fit when volume will not support a full team or you cannot recruit orthopedic coding experience.

• AI-assisted coding and claim checks can extend a small team, as long as someone qualified reviews the output.

4 to 10 surgeons

• At this size, volume can support a dedicated team with a manager, coders and A/R specialists.

• A hybrid often fits: keep coding and front-end work in-house and outsource overflow, old A/R, or workers’ comp and personal-injury follow-up.

• AI tools can absorb growth without adding staff at the same pace, if they integrate with your EHR.

More than 10 surgeons

• Complexity rises with ASC or imaging lines, more locations and more payer contracts.

• Keeping revenue cycle leadership and analytics in-house preserves control even if you outsource tasks.

• Require detailed reporting, audit trails and EHR integration from every vendor, and compare vendors on cost to collect.

What does a hybrid model look like?

A hybrid splits the work by strength. Patterns to consider:

• In-house coding and charge capture, with outsourced A/R follow-up and patient statements.

• An in-house team using AI-assisted documentation review, code suggestions and pre-submission checks.

• Outsourced billing with an internal revenue cycle lead who owns KPIs, audits and payer relationships.

• Carve-outs that send workers’ comp or personal-injury accounts to a team that focuses on them.

Hybrids work only with one set of KPI definitions, one dashboard, and a named owner for each denial category. Track net collection rate for each piece so no one can push losses onto another team.

What should you ask billing vendors before you sign?

Use these questions in an RFP or vendor interview:

1. KPIs reported: Which metrics will you report monthly, how is each defined, and can you break them out by payer, location and provider? At minimum ask for gross or net days in A/R, A/R over 90 and 120 days, clean claim rate, initial denial rate by count and dollars, and net collection rate.

2. Access to raw data: Will we have read-only access to the systems where work happens, and can we export claim, remittance and adjustment data at any time at no extra charge?

3. Audit trail: Is every coding change, adjustment and write-off logged with who made it and when, and who can approve write-offs?

4. BAA: Will you sign our business associate agreement, list every subcontractor that touches PHI, and tell us where data is stored and processed?

5. Denial workflow: How do you triage, categorize and appeal denials, how quickly, and how do you report root causes back to us?

6. EHR integration: Do you work inside our EHR and practice management system or your own, and who maintains the interfaces?

7. Exit terms: What notice is required, who works run-out A/R, what fees apply after termination, and how and when do we receive a complete data export?

8. Pricing scope: What exactly does the fee cover, what is billed separately, and is any percentage calculated on net collections?

9. Coding compliance: Who audits coding, how often, and how are errors corrected and overpayments refunded?

How Rette helps

Rette AI provides AI-assisted documentation integrity and coding software for orthopedic practices. Its agents read operative and clinical notes in the EHR your practice already uses, suggest codes, and check claims against NCCI, NCD and LCD rules before submission. Prior authorization, denials, appeals and workers’ compensation work sits in one prioritized queue, so Rette can support an in-house team or work alongside a billing partner.