# Medical Billing Company Contracts: Terms to Review Before You Sign - URL: https://practicevendors.com/guides/medical-billing-contract-terms/ - By: PV Editorial Team - Updated: 2026-10-11 > The clauses that decide who controls your money and data, what you can expect each month and how hard it is to leave, with the question to ask about each one. ## Key Takeaways - If a service is not listed in the scope section, assume it is not included. - A percentage rate means little until the contract defines what "collections" includes. - Payments should go to an account in the practice's name, and you should keep your own login to every system. - HIPAA requires a business associate agreement, and the rule lists what it must contain (45 CFR 164.504(e)). - Read renewal, notice, run-out and data return terms before you look at the price. The contract with a billing company decides more than the price. It decides who controls your money, who owns your data, what happens when collections fall and how hard it is to leave. Most problems practices have with billing companies were already written into the agreement they signed. This guide goes through the terms worth reading twice, and the question to ask about each one. ## Scope of Services The scope section should be a list, not a phrase like "full revenue cycle management". If a task is not written down, assume it is not included. Check that each of these is either listed or clearly excluded: - Charge entry and coding review - Claim scrubbing and submission, and how soon after the visit - Payment posting - Denial corrections and appeals, and how many levels of appeal - Follow-up on unpaid claims - Patient statements and patient billing calls - Eligibility checks and prior authorizations - Credentialing and payer enrollment - Work on old A/R from before the start date ## Fees and What the Rate Applies To A percentage means little until the contract defines the base. Look for the exact definition of "collections": insurance payments only, or patient payments too? Copays collected at your front desk? Payments on claims the previous company submitted? Refunds and takebacks should reduce the base, and the contract should say so. Then find every other fee and put them on one page: setup, monthly minimum, statements and postage, clearinghouse or software charges, old A/R at a different rate, and any fee on exit. Our guide to [what medical billing costs](https://practicevendors.com/guides/medical-billing-cost/) explains how these change the real price. ## Who Controls the Money Payments from payers and patients should go into a bank account in the practice's name, and the billing company should invoice you for its fee. Be careful with any arrangement in which payments land in an account the billing company controls. Medicare pays a billing agent directly only under narrow conditions, one of which is that the agent's pay is not tied to the amounts billed or collected (42 CFR 424.73(b)(3) and 424.80(b)(5)). With a percentage fee, that is one more reason to keep deposits in your own account. ## Your Data and System Access - **Ownership.** The contract should state that patient, claim and financial data belong to the practice. - **Access.** You should have your own administrator login to the billing system, the clearinghouse and the payer portals at all times, not reports sent on request. - **Software.** If the company bills in its own software, ask what you receive when you leave: a full export in a usable format, by a stated date, and at what cost. ## The Business Associate Agreement A billing company handles patient information on your behalf, so HIPAA requires a business associate agreement (45 CFR 164.502(e)). The rule lists what that agreement has to contain (45 CFR 164.504(e)). In plain terms, the company must agree to: - Use and disclose patient information only as the agreement allows - Use appropriate safeguards to protect it - Report to you any use or disclosure the agreement does not allow, including breaches - Hold its subcontractors to the same restrictions - Return or destroy the information when the contract ends, where that is feasible Ask where the work is done and whether any subcontractors are used. The same obligations follow the data wherever it goes. ## Performance and Reporting Many contracts say nothing about results. You can ask for terms that make the work visible: - How many business days from receiving charges to submitting claims - How many days to post payments and to start work on a denial - Named monthly reports with a delivery date: collections, denials by reason, and A/R aging by payer - Your approval before any balance above a set amount is written off - A regular review call and a named contact Be cautious about a guaranteed increase in collections. No company can know that number before it has worked your claims. ## Who Is Responsible for Errors Claims go out under your name and NPI, so the practice remains responsible for their accuracy even when a company prepares them. The HHS Office of Inspector General's compliance guidance for third-party billing companies describes what a billing company's own compliance program should cover, including how it handles errors and overpayments it discovers. Check what the contract says about correcting mistakes the company made, who pays for rework, and any limit on the company's liability. ## Term, Renewal and Exit | Clause | What to look for | Question to ask | | --- | --- | --- | | Initial term | The length of the first term and whether you can leave during it. | Can we end for any reason with notice, or only for cause? | | Renewal | Whether the contract renews automatically and when you must give notice to stop it. | What is the last date to cancel before it renews? | | Notice period | How many days of notice either side must give. | Does the company keep working claims fully during the notice period? | | Run-out | Who works claims already submitted, for how long and at what fee. | Do you charge on payments that arrive after the end date? | | Data return | What you receive, in what format and by when. | Is there any charge to hand back our data and open A/R? | | Termination fee | Any fee for leaving early. | Is it waived if agreed service levels are missed? | If you are already leaving a company, our guide to [switching billing companies](https://practicevendors.com/guides/how-to-switch-medical-billing-companies/) covers the handover step by step. ## Before You Sign - Ask for the full agreement and the business associate agreement before the final call, not after. - Mark every place where the contract is silent on something the salesperson promised, and ask for it to be added. - Have a healthcare attorney review the agreement. An hour of review costs less than one bad exit. - Keep a signed copy where the practice owner and manager can both find it. Still comparing options? You can [compare medical billing companies](https://practicevendors.com/billing-companies/) by specialty, state and EHR system, read [how to choose one](https://practicevendors.com/guides/how-to-choose-a-medical-billing-company/), or [send one request](https://practicevendors.com/get-quotes/) and we will point you to companies that fit. ## Common Questions ### What is a run-out period in a billing contract? It is the time after the contract ends during which the outgoing company keeps working claims it already submitted. The contract should say how long it lasts and what fee applies. ### Is a business associate agreement part of the billing contract? It can be a section of the contract or a separate document, but HIPAA requires one whenever a company handles patient information for you. Ask for it together with the main agreement. ### Should a practice have an attorney review a billing contract? Yes. This guide is general information, and a healthcare attorney can check the agreement against your state's law and your own situation. ### Can a billing company hold our data when we leave? The contract decides. It should state that the data belongs to the practice and set out what is returned, in what format, by when and at what cost. ## 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) - [HHS, Business Associates under the HIPAA Privacy Rule](https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/business-associates/index.html) - [42 CFR 424.73(b)(3), payment to a billing agent (eCFR)](https://www.ecfr.gov/current/title-42/section-424.73) - [42 CFR 424.80(b)(5), payment to an agent of a supplier (eCFR)](https://www.ecfr.gov/current/title-42/section-424.80) - [HHS OIG, Compliance Program Guidance for Third-Party Medical Billing Companies, 63 Fed. Reg. 70138 (December 18, 1998)](https://www.federalregister.gov/citation/63-FR-70138) --- General information from PracticeVendors, not legal or coding advice.