How Much Do Medical Billing Services Cost?
Medical billing pricing isn’t one-size-fits-all. Most companies use one of three models, and the “cheapest” rate isn’t always the best value. Here’s how pricing works, typical ranges, and what should be included so you can compare fairly.
The three pricing models
1. Percentage of collections (most common)
You pay a percentage of what the billing company actually collects for you — commonly 4%–8%, depending on volume and specialty complexity. Higher-volume practices generally get lower percentages. This model aligns incentives: the biller earns more only when you collect more, so they’re motivated to work denials and AR aggressively.
2. Per-claim fee
A flat fee per claim submitted (often a few dollars per claim). Predictable, but it can misalign incentives — the biller is paid whether or not the claim is ultimately paid, so denial follow-up may get less attention unless the contract specifies it.
3. Flat monthly fee
A fixed monthly rate, sometimes used for very small or predictable practices. Simple, but it doesn’t scale with your revenue and may not include aggressive AR recovery.
What typical percentage rates look like
| Monthly collections | Typical rate |
|---|---|
| Lower volume ($40k–50k) | ~6% |
| $51k–100k | ~5.5% |
| $101k–150k | ~5% |
| $151k–200k | ~4.5% |
| $200k+ | ~4% |
Rates vary by specialty complexity and the scope of services. Interventional and surgical specialties may sit slightly higher because the coding and denial work is more intensive.
What should be included
Compare scope, not just the headline percentage. A full-service rate should include eligibility verification, coding, charge entry, claim scrubbing and submission, payment posting, denial management and appeals, AR follow-up, and reporting. Some companies quote a low rate and then charge extra for denial work or credentialing — which is where the real value is. At PRMS, for example, credentialing and enrollment are included free for billing clients.
Cheapest isn’t the metric — net collections is
A 4% company that collects 92% of what’s owed is more expensive than a 6% company that collects 99%. The number that matters is your net collection rate and how much total revenue reaches your account, not the percentage on the invoice. Ask any prospective biller what net collection rate they deliver.
Estimate your own numbers
The best way to compare is against your actual data. A free revenue analysis shows your current collection rate, denial rate, and recoverable revenue, so you can weigh any quote against real value rather than a percentage alone.
FAQs
What is the average cost of medical billing services?
Most practices pay a percentage of collections, commonly 4%–8%, with higher-volume practices at the lower end. Per-claim and flat-fee models also exist. Specialty complexity and service scope move the rate within that range.
Is a lower percentage always better?
No. The number that matters is your net collection rate and total revenue collected. A cheaper percentage that collects less can cost you more than a higher rate that collects nearly everything owed.
What should be included in the price?
Full-service billing should include eligibility verification, coding, scrubbing and submission, payment posting, denial management and appeals, AR follow-up, and reporting. Confirm whether denial work and credentialing are included or billed extra.