How much do medical billing services cost?

Most medical billing companies charge a percentage of the money they collect for you. Others charge per claim, a flat monthly fee, or by the hour for a dedicated biller. There is no official standard rate: quotes vary with your specialty, claim volume and what the fee covers. Reliable Care charges 3% to 6% of monthly collections for the full revenue cycle, from eligibility checks and prior authorizations to A/R follow-up, set by volume, with no setup or onboarding fees and flexible monthly-minimum plans for new and smaller practices.

Billing in-house has a price too, and it is rarely one person. One biller at the national median pay costs about $62,600 a year with benefits. The full team behind a revenue cycle, from insurance checks to A/R follow-up, costs a three-provider practice about $184,000 a year. Here is how each model works, what to ask about, and the arithmetic to compare them on your own numbers.

How medical billing companies charge

Four pricing models cover almost every quote. Outsourced billing is usually priced as a percentage of collections, according to an article in HFMA’s journal, but you will see the other three too.

Percentage of collections

You pay a share of what the company collects, usually monthly. When collections fall, so does the fee, and the company earns only when claims are paid. That alignment is real but partial: the same HFMA article points out that a flat percentage rewards working large volumes of claims efficiently, but gives a company no real incentive to work the claims that need extra effort, such as denials.

In its compliance guidance for billing companies, the HHS Office of Inspector General also notes a longstanding concern that percentage billing arrangements may increase the risk of upcoding. Neither point is a reason to avoid this model. Both are reasons to ask who works the hard claims and how coding is checked against documentation.

Per claim

You pay a fixed fee for each claim submitted. Because the fee does not grow with the claim’s dollar value, it tends to favor practices with higher-value claims and a steady count of them. Ask whether a resubmitted claim is billed again, and whether follow-up, appeals and posting are inside the fee. A per-claim biller is paid when the claim goes out, not when the money comes in.

Flat monthly fee

You pay the same amount every month, whatever you bill. It is easy to budget and suits a practice whose volume barely changes. The fee is earned whether claims pay or not, and it gets renegotiated when you add a provider.

Hourly or a dedicated biller

You pay for a person’s time, by the hour or as a full-time biller working in your systems. You decide what they work on and you own the outcome: if A/R ages, that is your management problem, not the vendor’s. It suits a practice that already has someone who knows billing and needs more hands.

What the fee should include

A full-service fee should cover the work from charge to deposit: charge entry and coding review, claim scrubbing and electronic submission, fixing rejections, payer follow-up on unpaid and underpaid claims, denials and appeals, payment posting from ERAs, and a monthly report. If a quote leaves any of these out, the low number is low for a reason.

Then ask about everything else. An AMA article on third-party billing vendors warns that their costs can vary greatly and practices have to be on guard against hidden fees. Get these in writing:

Old A/R deserves its own line in the agreement. Claims that are 90 or 120 days old are the extra-effort work a flat percentage does little to reward. If you have a backlog, ask how it will be worked and reported, or treat it as a separate A/R recovery project with its own terms.

How to compare medical billing quotes

Put every quote on the same footing: the total monthly cost at your volume, with every fee included, next to what each company will actually collect.

What counts as “collections”

A percentage means nothing until you know what it is a percentage of. Ask whether it applies to insurance payments only or to patient payments too, including copays your front desk collects. Ask whether payments on claims filed before the company started count, and whether refunds and payer recoupments are subtracted. Two quotes with the same percentage can differ a lot on these definitions alone.

Net collection rate

This shows whether a biller collects what you are owed. The AAFP calls it the adjusted collection rate: payments, net of credits, divided by charges net of contractual adjustments, over 12 months. It sets 95 percent as the minimum and puts the highest performers at 99 percent or better. Watch the write-offs: denials written off as contractual adjustments, instead of appealed, make the rate look better than it is.

A few points of collection rate can outweigh a few points of fee. Take two hypothetical quotes on $100,000 a month in allowed charges:

• Quote A, 4% fee, 95% net collection rate: $95,000 collected, $3,800 in fees, $91,200 kept.
• Quote B, 6% fee, 98% net collection rate: $98,000 collected, $5,880 in fees, $92,120 kept.

The higher fee leaves you $920 a month better off, because it comes with $3,000 more collected.

Who works denials, and what you see each month

Ask who works denials, how quickly, and whether appeals are in the fee; then ask the same about A/R past 90 days. Denial management belongs in the written scope, with denials reported by payer and reason. Ask for a sample monthly report showing collections, days in A/R, A/R over 90 days, denial rate, first-pass acceptance and net collection rate.

Contract length and where the money goes

Ask how long the term is, whether it renews automatically, how much notice you give and what it costs to leave. Ask who works claims still open when it ends and how your data comes back. The HFMA article recommends writing those exit terms, including the return of billing data, into the contract.

Keep payer deposits going to an account in your practice’s name. Medicare pays a billing agent on your behalf only if the agent’s compensation is not related in any way to the amounts billed or collected, and those conditions do not apply when the agent only prepares the bills and does not receive the payments, as the Medicare Claims Processing Manual sets out. A company paid a percentage should prepare your claims, not receive your Medicare money.

Questions to ask a medical billing company

1. What exactly counts as collections for your percentage?
2. Which fees sit outside the rate: setup, minimums, credentialing, statements, old A/R, software, clearinghouse, termination?
3. Who works denials and A/R over 90 days, and is old A/R priced differently?
4. Which numbers do you report, and how often?
5. Who codes our claims, and how do you check coding against documentation?
6. Will you sign a business associate agreement, and a service-level agreement that sets out what each side owes?
7. Where do payer deposits go, and who controls that account?
8. What notice do we give to leave, and what happens to open claims and our data?
9. Can we speak with one of your current clients? Reliable Care arranges this with that client’s permission.

What in-house medical billing really costs

Start with pay. BLS publishes pay by occupation rather than job title, and three occupations cover the jobs in a practice’s revenue cycle. The newest figures are for May 2025:

• Billing and posting clerks, who calculate charges, generate bills and review records such as charge slips and hospital records to work out what is owed: a median annual wage of $48,500.
• Medical records specialists, whose BLS profile covers medical coders: a median annual wage of $51,140, and $47,120 in physicians’ offices.
• Medical secretaries and administrative assistants, the closest occupation for staff who verify insurance, request authorizations and take patient billing calls: a median annual wage of $45,930.

A biller who mostly submits claims, posts payments and follows up is closest to the first. One who also codes is closer to the second. The person who checks eligibility and benefits before each visit is closest to the third.

Add benefits the right way

In the BLS Employer Costs for Employee Compensation release for June 2026, published September 9, 2026, benefits were 30.0 percent of total compensation for private industry workers. BLS counts paid leave, supplemental pay, insurance, retirement and savings, and legally required benefits.

One adjustment matters. Paid leave was 7.5 percent of compensation, and an annual salary already pays for vacation and holidays, so counting it again would inflate the total. Leave it out and the benefits on top of salary are 22.5 percent of total compensation. That is a share of the total, not of pay, so divide rather than multiply:

1. Annual pay ÷ (1 − 0.225) = yearly cost. $48,500 ÷ 0.775 = $62,581.
2. Yearly cost ÷ 12 = monthly cost. $62,581 ÷ 12 = $5,215.
3. Multiply by the number of billers you need.

A biller-coder at the medical records specialist median comes to $65,987 a year, or $5,499 a month. These are national averages; if your benefits differ from the average private employer’s, use your own figures.

Costs that vary too much to price here

• Software: a practice management or billing system seat, plus eligibility or coding tools.
• Clearinghouse: claim, ERA and eligibility transaction fees under your contract.
• Training: code sets and payer rules change, and someone pays for the time and courses to keep up.
• Coverage gaps: paid leave is in the benefits figure, but the claims that do not go out while your biller is away, or while a replacement learns your payers, are not.
• Supervision: someone has to check the work, usually the practice manager or you.

Outsourced vs in-house billing cost

Compare cost against what gets collected. HFMA’s standard measure, cost to collect, divides total revenue cycle cost by the patient service cash collected, counting staff salaries and benefits, outsourced vendors, software, IT, transaction fees and office overhead. Do the same with your in-house cost and you get a percentage to set next to any quote.

Count the whole team, not one biller. Before a claim is paid, someone checks eligibility and benefits, gets the authorization, codes and enters the charge, submits the claim, posts the payment, works the denial and follows up on A/R. A common in-house rule of thumb is one billing person for every two providers, and the front end needs people too. Even a solo practice needs two people to run the full cycle, or claims stop when one of them is out.

Take three providers collecting $120,000 a month. Two billing staff at $48,500 and one eligibility and authorization specialist at $45,930 cost $184,426 a year with benefits, or $15,369 a month. That is 12.8 percent of collections, before software, a clearinghouse, hiring and turnover. A fixed team does get cheaper per dollar as you grow, which is why large groups with a full billing department can still keep billing in-house.

Put in your own numbers:

The calculator compares cost, not results. It cannot show what your current setup fails to collect or what unworked A/R is worth, and the quote comparison above shows how a few points of collection rate can outweigh a point or two of fee. Outsourcing also leaves some work in-house: your front desk still checks patients in, collects copays and sends complete charges.

What Reliable Care charges for medical billing

Reliable Care’s full-service rate is 3% to 6% of your monthly collections. Where you fall depends on volume: the more you collect, the lower your percentage. There are no setup or onboarding fees, and new and smaller practices can choose a flexible monthly-minimum plan.

The rate covers the full revenue cycle with a dedicated team: eligibility and benefits checks before each visit, prior authorizations, charge entry and coding review, claim scrubbing and electronic submission, payer follow-up on unpaid and underpaid claims, denial management and appeals, ERA and payment posting, patient billing calls, and a monthly report with a dedicated account manager. Credentialing is priced separately, per payer application: see provider enrollment and credentialing. We work inside the EHR or practice management system you already use.

Your exact rate comes after a free review of 90 days of your A/R, in writing, before anything starts. You are not locked into a long contract, and your data, payer enrollments and reports stay yours. Ask us every question on the list above, and see how we run medical billing end to end.