# Offshore, US-Based or Hybrid Medical Billing: What to Check - URL: https://practicevendors.com/guides/offshore-vs-us-medical-billing/ - By: PV Editorial Team - Updated: 2026-10-16 > How the three delivery models differ, what HIPAA and Medicaid rules mean for each, and the questions that separate a safe billing partner from a risky one. ## Key Takeaways - Offshore, US-based and hybrid billing teams can all work well; what matters is how each handles your data, money and claims. - HIPAA requires a business associate agreement wherever the work is done (45 CFR 164.502(e) and 164.504(e)). - Medicaid managed care rules exclude payments to entities outside the US from plan rates (42 CFR 438.602(i)), so keep payer deposits in your practice's own US account. - Ask which tasks happen where, who reviews the work and which hours your contact keeps. Many medical billing companies that serve US practices do part or all of their work outside the United States, most often in India, Pakistan or the Philippines. Others keep every role in the US, and many mix the two. None of these models is good or bad on its own. What matters is what each company does with your data, your money and your claims. This guide explains the three models and the questions that separate a safe partner from a risky one. ## The Three Delivery Models | Model | What it usually means | What to check | | --- | --- | --- | | US-based team | Billers, coders and account managers work in the United States. | Whether that covers every role, including coding, A/R follow-up and any subcontractors. | | Offshore team | Most of the work is done by a team outside the US, often with a US sales or account contact. | Who your daily contact is, which hours they work, and how your data is protected abroad. | | Hybrid team | A US team handles client contact and sensitive tasks; an offshore team handles volume work such as charge entry and follow-up. | Which tasks happen where, and who reviews the offshore team's work. | On PracticeVendors, a company's team location is shown only when its own website states where the team works. When it does not, the profile says so, and you should ask. ## HIPAA Applies Wherever the Work Is Done A billing company that handles patient information for you is a business associate under HIPAA, and you need a business associate agreement before it starts (45 CFR 164.502(e) and 164.504(e)). That is true whether the team sits in Texas or in Chennai. The agreement must require the company to protect the information, report problems to you, hold its subcontractors to the same rules, and return or destroy the data when the contract ends. For an offshore or hybrid company, also ask: - Do staff work in a secured office, from home, or both? - Is patient data kept on your systems and reached through a secure connection, or copied to their systems? - Can staff download, print or save files locally? - Which outside audits or certifications do they hold, and can you see the current report or certificate rather than a logo? ## Keep Medicaid Money in the United States Federal Medicaid managed care rules require that the plans themselves are not located outside the United States, and that claims they pay to providers, subcontractors or financial institutions located outside the United States are left out when states set plan payment rates (42 CFR 438.602(i)). In practice, this is one more reason payer payments should always go into a US bank account in your practice's name, never into an account the billing company controls. Some state Medicaid programs and some commercial contracts also limit where their members' data may be handled, so check your own payer contracts before you sign with an offshore team. ## Communication and Time Zones - Who is your named contact, and what hours are they reachable in your time zone? - How fast are questions answered, in hours, and is that written in the contract? - Who joins the monthly review call, and who on their side can make decisions? - Will your front desk talk to the offshore team directly, or through a US account manager? ## Quality Control The quality question is the same for every model: who checks the work? Ask what share of claims is reviewed before submission, how coding is audited, and what happens when an error is found. Ask for the same monthly reports you would expect from any billing company: collections, denials by reason and A/R aging by payer. Our guide to [choosing a medical billing company](https://practicevendors.com/guides/how-to-choose-a-medical-billing-company/) lists the questions in full. ## Contract Points That Matter More Offshore - A list of every location where your data will be handled, and a duty to tell you before that list changes. - The right to approve or refuse subcontractors. - Which country's law governs the contract and where a dispute would be heard. - How your data and open claims come back to you if you leave. Our guide to [billing contract terms](https://practicevendors.com/guides/medical-billing-contract-terms/) covers this clause by clause. ## How to Compare Companies on PracticeVendors Use the team location filter on any [billing companies](https://practicevendors.com/billing-companies/) page to see US-based, offshore and hybrid companies side by side, then put up to three in the [comparison table](https://practicevendors.com/compare/). If a profile does not state its team location, ask the company directly, or [send one request](https://practicevendors.com/get-quotes/) and we will point you to companies that fit. ## Common Questions ### Is it legal for a medical billing company to work offshore? Yes, for most work. HIPAA does not ban offshore work, but it requires a business associate agreement, and some Medicaid programs and payer contracts limit where their data may be handled. Check your contracts. ### Is offshore medical billing cheaper? It is often lower cost for high-volume work, but compare the total cost against collections and quality, not the rate alone. ### How do I know where a billing company's team works? Ask for every location where your data will be handled and put that list in the contract. On PracticeVendors, profiles show team location when the company's own website states it. ## Sources - [45 CFR 164.502(e), disclosures to business associates (eCFR)](https://www.ecfr.gov/current/title-45/section-164.502) - [45 CFR 164.504(e), business associate contracts (eCFR)](https://www.ecfr.gov/current/title-45/section-164.504) - [42 CFR 438.602(i), entities located outside the United States (eCFR)](https://www.ecfr.gov/current/title-42/section-438.602) --- General information from PracticeVendors, not legal or coding advice.