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How Much Does a Medical Billing Service Cost?

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Medical Insurance Billing Software Prices

The financial performance of your health care facility is impacted greatly by medical billing, patient accounting, and account receivable management. Great organization is important in maintaining clear records and keeping patient confidence high. Medical billing services handle the day-to-day accounts receivables functions to alleviate these concerns and let you do what you do best, treat patients.

Top reasons practices lose money:

  • For one reason or another, not collecting co-pays, co-insurance, or deductibles directly from patients.
  • Due to insurance contract exclusions or incorrect billing of services, non-covered services going unpaid. Bottom line, the insurance company and patient do not pay.
  • Negligence, inexperience, and/or sloppiness of in house billing staff (un-submitted claims, coding errors, under-coding insurance forms, and lack of proper follow up on denied claims.
  • Employee theft. Methods of accountability for all collections are a must.

A well qualified and accountable billing service can realistically increase revenue up to 25% to 35%. Today, many specialty clinics, hospitals, private practices, and physician groups are finding a medical billing service is often more cost effective than in-house billing.

Medical Billing Service Average Costs

  • Most medical billing companies charge a percentage of collections. Typical rates are between 5% to 10%, although it is possible for rates to be 4% to 15%. This is a major earning incentive that will make you more money. They don't get paid unless you get paid.
  • Some services or specialty billing services (i.e. Medicaid/Medicare specialists or other compensation specialists) charge a flat fee, per claim. Fees range from $1 to $8. A typical practice often pays $4 to $6, per claim. Make sure to find out if the cost of submitting inpatient and outpatient claims is separate.

Cost of service can be a deceiving and is, ultimately, not the only way to select a billing company. A service may demand a higher percentage of profits. However, their performance will often boost your total collections. The resulting increased revenue may quickly account for the difference of paying that slightly higher rate.

Tasks, other than basic claims processing, are sometimes priced with either an upfront licensing fee or a per user monthly charge, independent of your collections activities. This is vendor specific, so be sure to get a full breakdown of ALL costs, especially if you are entering a service contract. Always ask for references.


Examples of typical contracts:

  • Auto-renewing 30 or 60 day contract. There may be an upfront setup cost. But, the service is yours until you choose to cancel. Cancellation policies usually call for 1 to 2 months notice.
  • Longer-term contract, anywhere from 1-3 years. Sometimes the provider will assume the setup costs.

Sample costs:

  • Medeye Services - All-Inclusive Service Package- Includes full charge entry, payment posting, insurance follow-up, and patient billing. Rates start at 2% of the collected amount.
  • Imperia Medical Billing - 4% of your total practice collections.
  • MedPro Services - No set fee. Percentage fees are individually customized and determined according to the type of practice, specialty, monthly volume, and the length of contract. Fees are all-inclusive (telephone fees, CMS forms, printing, and all office-related expenses). Clients only pay for electronic claims submissions and postage costs related to their account.

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