How to Choose a Medical Billing Company: Questions to Ask and Terms to Check

Before you compare

Know your own numbers first

You cannot judge a billing company’s proposal without a baseline. Before talking to vendors, pull your last twelve months of charges, payments and adjustments, a current A/R aging report by payer, and a denial report if your system produces one. Ask every company you speak to how they would measure improvement against those figures, and use the same definitions throughout.

Scope

1. What exactly is included?

“Full-service billing” means different things to different companies. Ask for a written list and check each of these:

• Eligibility verification — who does it, and when?
• Coding — do they code from documentation, or only review codes your providers choose?
• Charge entry, claim submission and rejection work
• Payment posting, including paper checks and lockbox payments
• Denial management and appeals — all denials or only some?
• Patient statements, patient phone calls and payment plans
• Credentialing and payer enrollment
• Prior authorizations
• Work on old A/R from before the start date

Pricing

2. How is the fee calculated?

Most billing companies charge a percentage of collections; others charge per claim, a flat monthly fee, or a mix. Whatever the model, ask:

• Is the percentage applied to all collections, or only insurance payments? Are patient payments included?
• Is there a minimum monthly fee, a setup fee or a separate fee for old A/R?
• Which costs are passed through — clearinghouse, statements, postage, software?
• Are credentialing and authorizations priced separately?

A percentage-of-collections fee links the company’s income to what you collect, but only if it is charged on payments actually received, not on charges. See how our pricing works.

Fit

3. Do they know your specialty and payers?

Ask what proportion of their work is in your specialty, which payers in your state they work with most, and how they keep up with changes to coding and payer policy. Ask them to explain two or three rules specific to your specialty — the answers show quickly whether their experience is real. Our specialty pages for cardiology, orthopedics, gastroenterology and behavioral health show the level of detail to expect.

Visibility

4. What will you see every month?

Ask for a sample monthly report. It should show charges, payments, adjustments, days in A/R, aging by payer, denials by reason and payer, and what is being done about the largest problems. Ask whether you keep direct access to your practice management system and whether there is a regular review meeting.

Security

5. How do they protect patient data?

• Will they sign a Business Associate Agreement before receiving any patient data?
• How is access controlled — individual logins, role-based permissions, multifactor authentication?
• Where is work performed, and does any of it happen outside the United States? Some payer contracts and state Medicaid programs restrict offshore access to patient data.
• Do they conduct regular HIPAA risk analyses and staff training?

Contract

6. What happens if you leave?

Read the termination clause before you sign. Check the notice period, any early termination fee, whether you own your data and reports, and what happens to claims submitted before the end date — whether the company keeps working them and how fees on those collections are charged. A clear exit makes it safer to start.

Warning signs

Red flags

If you are still deciding whether to outsource at all, read our comparison of in-house and outsourced billing.