If you are thinking about outsourcing your billing, the first question is usually the price. The honest answer is that it depends on how the company charges, what it includes and how your practice bills. This guide explains the pricing models you will see, the fees that are easy to miss, and how to compare quotes so you are comparing the same thing.
The Short Answer
Most medical billing companies charge a percentage of what they collect for you. Quotes commonly fall somewhere between 4% and 10% of collections. Lower rates usually come with higher claim volume, simpler specialties or fewer services included. Higher rates usually include more work, such as patient statements, denial appeals or credentialing.
Some companies charge a flat monthly fee or a fee per claim instead. Whatever the model, the number that matters is what you pay in total for the services you actually need.
The Three Ways Billing Companies Charge
| Model | How it works | Works well when | Watch out for |
|---|---|---|---|
| Percentage of collections | The company keeps a share of the money it collects for you each month. | You want the company paid only when you are paid. | What the percentage is applied to, and whether patient payments and old A/R are included. |
| Flat monthly fee | A fixed amount each month, often per provider. | Your volume is steady and predictable. | Volume limits, and whether the fee rises when you add providers. |
| Per claim | A fixed amount for each claim submitted. | You have high volume and simple claims. | Whether resubmitted and denied claims are charged again. |
The percentage model is the most common because it ties the company’s income to your collections. That alignment is real, but it only works if the contract says clearly what “collections” means.
What Moves the Price
- Specialty. Specialties with complex coding, frequent prior authorizations or many modifiers take more work per claim.
- Claim volume and average payment. A practice with many low-value claims costs more to bill, per dollar collected, than one with fewer high-value claims.
- Payer mix. Some payers deny more often or require more follow-up.
- Your starting point. A clean, current A/R is cheaper to take over than one with a large backlog of old claims.
- Who does what. If your staff enter charges and the company does everything after that, the price is different from a company that also handles charge entry, eligibility checks and patient calls.
- Systems. Working inside your EHR and practice management system is usually included. Asking a company to use its own software may add licence costs.
What Should Be Included
Ask for the full list in writing. A typical full-service contract includes:
- Claim scrubbing and electronic submission
- Payment posting, including electronic remittances
- Denial review, corrections and appeals
- Follow-up on unpaid claims
- Monthly reports on collections, denials and A/R
These are often extra and worth asking about: patient statements and patient phone calls, eligibility checks before visits, credentialing and payer enrollment, coding audits, and work on old A/R from before the contract started.
Fees That Are Easy to Miss
- Setup or onboarding fees for the first month or two.
- Monthly minimums that apply even when collections are low.
- Old A/R recovery charged at a higher percentage than current claims.
- Patient statement printing and postage.
- Clearinghouse or software fees passed through to you.
- Termination fees or a long notice period, and any fee to hand back your data.
A Worked Example
The numbers below are an example to show the math, not a quote. Imagine a practice that collects $80,000 a month and submits 1,200 claims a month.
| Quote | Monthly cost |
|---|---|
| 6% of collections | $4,800 |
| Flat $3,500 a month, patient statements extra | $3,500 plus statements |
| $5 per claim | $6,000 |
The cheapest line is not always the cheapest contract. If the flat-fee company does not chase denials as hard, a few points of lost collections can cost more than the fee you saved. Compare the total cost and the expected collections together.
How to Compare Quotes
- Ask what the percentage is applied to. Net collections, gross collections, insurance payments only, or all payments including patients? The same rate on a different base is a different price.
- Ask every company the same questions and get the answers in writing.
- Ask for an all-in monthly estimate for your volume, including the extras you need.
- Ask for a reference from a practice in your specialty and of your size.
- Read the exit terms before the price. How you leave matters as much as how you start.
Questions to Ask Before You Sign
- What exactly is included in the rate, and what is billed separately?
- How quickly are denials worked, and who decides when a claim is written off?
- Which reports will we receive each month?
- Will you work inside our EHR and practice management system?
- How much notice is needed to end the contract, and how do we get our data and open A/R back?
- Will you sign a HIPAA business associate agreement?
Where to Start
Most billing companies do not publish a price list, because the price depends on your volume and specialty. At the time of writing, none of the companies listed on PracticeVendors shows a price on its profile, so plan to request two or three quotes and compare them with the questions above.
You can compare medical billing companies by specialty, state and EHR system, see which ones work in your EHR, or send one request and we will point you to companies that fit.