By Optimus Billing Solutions Editorial Team · Published · Last reviewed
Key takeaways
- Four models cover most quotes: percentage of collections, flat fee, per claim and hybrid.
- A percentage ties the biller's pay to yours. A flat fee gives you a fixed cost.
- Compare what is included, not just the headline number.
- Ask how collections are defined and whether there are setup fees, minimums or contract terms.
How do medical billing companies charge?
There are four common ways, and a quote can combine them.
- Percentage of collections. The company takes a share of the money it collects for you.
- Flat monthly fee. A fixed amount, often tied to the number of providers or an expected claim volume.
- Per-claim fee. A set price for each claim submitted.
- Hybrid. A smaller percentage plus a flat fee, or a flat fee plus charges for extra services.
Prices differ widely, and a number on its own tells you little. What it covers is the real comparison.
Percentage of collections
The company is paid only when you are paid, so it has a direct reason to work every denial. Your cost rises and falls with your revenue, which suits a growing practice.
The downside is that the cost grows as collections grow. A practice with very high, steady collections may pay less under a flat fee. At Optimus, billing starts at 2.9%* of collections, and the final rate depends on average monthly collections, number of providers and number of locations.
Flat monthly fee
A flat fee gives a predictable bill and works well for steady, high-volume practices. The risk is that the biller is paid the same whether or not claims are collected, so ask what performance reporting you get and what happens when volume jumps.
Per-claim fee
Per-claim pricing is simple to understand. It can penalise practices with many low-value claims, and it may not include denial work or follow-up. Always ask whether resubmissions and appeals cost extra.
Hybrid pricing
Hybrids try to balance the two. They can be fair, but they are the easiest to misread, so ask for an example bill for a typical month.
Questions to ask before you sign
- What exactly counts as collections, and is it before or after adjustments?
- Is there a setup, onboarding or software fee?
- What does the fee include: denials, appeals, patient statements, credentialing?
- Is there a minimum monthly charge or a contract term?
- Will they sign a Business Associate Agreement? The sample provisions from HHS show what one should cover.
- Who owns the data, and what happens to it if you leave?
- What reporting will you see, and how often?
If a company will not answer these plainly, treat that as the answer.
What else costs money
Billing is one part of the revenue cycle. Credentialing and a virtual front desk are usually priced separately. At Optimus, credentialing is from $100 per payer plan and a virtual front desk agent is $1,750 per dedicated agent, so you can see the cost before you start.
When a percentage is not the right fit
If your collections are very high and stable, a flat fee may cost less. If your volume is so low that a percentage will not cover the work, a per-claim arrangement may be fairer, and we will tell you so. If you only want billing software and plan to keep the work in-house, you do not need a billing service at all.
How to compare quotes fairly
Ask each company to price the same month: your actual collections, providers and locations. Then compare the total, the inclusions and the exit terms. See our pricing page, learn what medical billing services include, or get a free billing audit to see where revenue is leaking before you decide. For background on how the whole cycle fits together, read what is revenue cycle management. Medicare fee schedules are published by CMS.
This article is general information, not legal or compliance advice. Payer rules and regulations change, so confirm current requirements with the payer or the governing agency.