How Much Do Medical Billing Companies Charge Customers?

Most medical billing companies charge customers in between 2% to 10% of claim price. However, there are other ways billing companies charge for specialty clients or practices having special requirements.
In this comprehensive guide for medical billing costs in 2022, we have covered every aspect for practices to know, “how they will be charged for medical billing”.
In addition, we have compiled a bonus guide for you to gauge every third-party company. You can download it here.

How much do medical billing companies charge?

Billing charges are costs incurred to physicians when a third-party medical billing company charges them. Such a company would charge a physician when a claim is repaid (Would you call it a cost?).
Service charges are a combination of some upfront charges & running costs.
Upfront charges include training, setup, administration licensing or other charges. While running costs are subscriptions, collection rates & more.

Upfront or one-time charges:

Most billing companies charge an upfront fee not more than $1500. However, this could go up depending on different specialty requirement that might be required.

Monthly charges or running costs:

Monthly charges are mostly the actual billed amount; a physician will pay to get more reimbursements.
The most common way billing companies charge physicians are following:

Flat fee charge:

Normally a company would charge $3 to $7 for each claim.

Percentage of claim price:

This is the most common way for physician billing services (PBC offers tailored pricing according to your needs) to charge their customers. Average rate for this type of costing are generally between 2% to 10%.

Hourly basis:

Another way, RCM companies charge physicians is on hourly basis. This type of charge is quoted to smaller practices having fewer claims but complex.

What is the average cost of medical billing services?

The biggest factor that can affect the below mentioned figure is, the size of the practice/organization.
Average cost of billing services in percentage price claims is $5 – $8. While for flat fee charge, it is $5.
However, the chart below can accurately explain the average cost/services for any physician, lab, hospital or an independent physician.

Service offered Lowest rate services Medium rate services Average rate services Higher rate services
Credentialing & Enrollment
Claim Submission
Payment Posting
AR management
Patient inquiries
Dedicated Support managers
HIPAA compliance
Patient scheduling
Eligibility verification
Full suite of RCM services

In-house billing cost vs outsourced billing cost:

For practices still confused between choosing in-house or outsourced billing, here is our detailed cost analysis sheet.

Cost/collection In-house billing Outsourced billing
Billing department cost
Subscriptions (EHR, Software, etc.)
Claim processing cost
% of collected claims
Cost of collections
Net collections of incurred cost

Furthermore, healthcare-billing malpractice can pose a significant damage & increase the risk of lawsuit. Therefore, it is always a better choice to outsource.
Get our no-obligation in-depth cost calculator for your own practice.

Questions to gauge any billing company’s billing quote:

  • Ask billing service for reporting & analytics dashboard, they provide for financial insights.
    • This will help you know what the key metrics the billing service focuses on are. Also, help you to figure a little about their RCM services.
  • Ask for a free revenue cycle analysis.
    • Any qualified company like PBC will be more than happy to offer a free RCM analysis. This will help you to understand your practices inefficiencies, while you can also ask them for the resolution steps. Get our FREE RCM analysis here.
  • Always check reviews before outsourcing your billing, “Physician Billing Company has been recognized as one of Top Medical Billing Companies by DesignRush
  • For 4-more of such expert questions, download our guide here.