How Much Do Medical Billing Services Cost? Pricing Models, Fees and How to Compare Quotes

The short answer

What medical billing companies typically charge

U.S. medical billing companies use four main pricing models. The ranges below are the ones most commonly quoted in published price guides from billing companies in 2025–2026. They are not audited survey data, so treat them as a benchmark for the first conversation, not as a price list.

The headline rate is only part of the cost. What the rate is applied to, what is included, and which fees are charged on top usually matter more than a one-point difference in the percentage. The rest of this guide explains each model, the fees that sit outside the headline rate, and how to turn different quotes into one comparable number.

Model 1

Percentage of collections

The billing company keeps a percentage of the money it collects on your claims. If your practice collects $80,000 in a month and the rate is 6%, the fee is $4,800. When collections fall, so does the fee, which gives the company a reason to work every claim until it is paid.

The most important question is what the percentage is applied to:

• Net collections — payments actually received from payers (and, depending on the contract, patients) after contractual adjustments. This is the usual and fairest base.
• Gross charges — your billed amounts before any adjustment. A fee on charges is paid whether or not the money arrives, and a lower percentage on charges can cost more than a higher percentage on collections.
• Patient payments — check whether copays and balances collected at your front desk are included. Some contracts charge on all deposits, including money the billing company did no work to collect.
• Old A/R — claims from before the start date are often excluded or priced at a different rate. Get the rule in writing.

Percentages are lower for practices with high volume and simple claims, and higher for small practices, complex specialties and scopes that include coding, authorizations or patient calls. Our net collection rate definition explains the measure most percentage contracts should be tracked against.

Model 2

Per-claim fees

A per-claim fee is easy to budget: multiply your monthly claim count by the rate. It tends to suit practices whose claims are each worth a lot, such as surgical or procedure-heavy specialties, because the fee does not grow with the size of the payment.

Ask exactly what counts as a claim. If corrected claims, resubmissions and secondary claims are each charged as a new claim, the cost rises with your denial rate. A per-claim fee also gives the billing company no direct financial reason to keep working a claim after it has been sent, so check what follow-up and appeals are included.

Model 3

Flat monthly and per-provider fees

A flat fee covers a defined scope for a fixed monthly price, sometimes set per provider. It gives the most predictable invoice, but the price is only as good as the scope behind it. If volume grows or the work gets harder, expect the fee to be renegotiated; if collections fall, the fee does not. Flat pricing works best when the scope is narrow and stable, for example claim submission and posting while your own staff work denials.

Model 4

Project and contingency pricing

One-off work is usually priced separately from the monthly fee:

• Old A/R recovery — often a percentage of the money recovered, usually higher than the ongoing rate because aged claims take more work. Claims past the payer’s timely filing limit may not be recoverable at all, so ask how the backlog will be sorted. See A/R management and recovery.
• Credentialing and enrollment — commonly priced per provider, per payer application, with a separate fee for ongoing CAQH upkeep and revalidation. See credentialing services.
• Coding audits — priced per chart sample or per provider.

Hidden costs

Fees that are not in the headline rate

Two quotes with the same percentage can differ by thousands of dollars a year once the extras are added. Ask every company to state, in writing, whether each of these is included, charged separately, or passed through at cost:

• Setup or onboarding fee, and what it covers (system access, payer set-up for electronic remittances, workflow mapping)
• Monthly minimum fee, and whether it applies only in the first months or for the whole contract
• Clearinghouse fees for claims, eligibility checks and remittances
• Patient statements, postage and online payment processing
• Practice management or billing software licences, if you have to use theirs
• Patient phone calls about balances
• Prior authorizations
• Credentialing, enrollment and revalidation
• Work on claims from before the start date
• Early termination fees, and fees on collections that arrive after the contract ends

What moves the price

What changes your rate

• Specialty — specialties with complex modifiers, global periods, drug units or frequent authorizations take more work per claim.
• Volume — fixed costs are spread over more claims, so the percentage usually falls as collections rise.
• Average payment per claim — when each claim pays little, the same work earns less on a percentage, so rates go up.
• Payer mix — Medicaid, workers’ compensation and out-of-network claims tend to need more follow-up than large commercial plans.
• Scope — coding, eligibility checks, authorizations and patient calls each add work. Claims-only service costs less than full revenue cycle management.
• Starting point — a large backlog, high denial rate or missing payer enrollments mean more work in the first months.

Worked example

Comparing three quotes for the same practice

Take a three-provider practice that collects $90,000 a month from about 900 claims, sends 400 patient statements a month, and has around 10% of claims corrected and resubmitted. It receives three quotes. The figures are illustrative:

The per-claim quote looked cheapest at first sight and turns out to be the most expensive. Quote C is now the lowest, but the comparison is not finished: if Quote C excludes denial appeals or patient calls and Quote A includes them, the practice would have to do that work itself or pay for it elsewhere. Compare the scope line by line before choosing on price.

A difference of one or two points also matters less than results. If one company collects 3% more of what you are owed, that gain is larger than most fee differences. Ask each company how it will report your days in A/R, denial rate and net collection rate each month, using the same definitions.

The other side of the comparison

What in-house billing really costs

Outsourcing should be compared with the full cost of billing in house, not with one salary. The U.S. Bureau of Labor Statistics reports a median annual wage of $50,250 for medical records specialists, the occupation group that includes medical coders, in May 2024. Benefits add more: in December 2025, benefits made up about 30% of employer compensation costs in private industry ($13.79 of $46.15 per hour worked). On those figures, one full-time biller at the median wage costs a practice roughly $72,000 a year in wages and benefits, or about $6,000 a month.

Then add the costs that do not appear on payroll:

• Billing software, clearinghouse and statement costs
• Training and coding updates each year
• Cover for vacation, sick leave and turnover, when claims and follow-up often stop
• Time the practice manager or physician spends supervising billing
• Revenue lost to denials that are never appealed and claims that pass their filing deadline

A quick break-even check: divide your total monthly in-house billing cost by the quoted percentage. At $6,000 a month and a 6% rate, outsourcing costs the same as one biller when the practice collects $100,000 a month. Below that, the fee is lower than the salary alone; above it, the comparison depends on how many staff the practice would otherwise need and on the results each option delivers. Our page on outsourced vs in-house billing covers control, risk and transition in more detail.

Step by step

How to compare quotes fairly

1. Collect your own numbersTwelve months of charges, payments and adjustments, a current A/R aging report by payer, your monthly claim count and a denial report if your system produces one.
2. Give every company the same scenarioShare the same figures and the same list of tasks you want covered, so each quote prices the same work.
3. Ask for an all-in monthly estimateIncluding setup, minimums, clearinghouse, statements, software and any per-transaction fees.
4. Convert each quote to an effective rateDivide the all-in monthly cost by your monthly net collections, as in the example above.
5. Compare scope line by lineEligibility, coding, denials and appeals, patient calls, authorizations, credentialing and old A/R: included, extra or not offered.
6. Read the contract termsTerm length, notice period, early termination fees, fees on collections after the contract ends, data ownership and a signed Business Associate Agreement before any patient data is shared.
7. Agree how results are measuredMonthly reporting on the same measures, calculated the same way, so you can tell whether the fee is paying for itself.

Our guide to choosing a medical billing company lists the questions to ask about each of these points.

Warning signs

Red flags in a billing quote

• The fee is a percentage of charges rather than collections.
• A guaranteed increase in collections, or a promised denial rate, before anyone has looked at your claims.
• A scope described only as “full service”, with no written list of tasks.
• A long initial term with a large early termination fee.
• Fees on payments the company did no work to collect, without that being made clear.
• No Business Associate Agreement, or a request for patient data before one is signed.
• No clear answer on who owns your data and reports if you leave.

Our pricing

How we price our medical billing

We charge a percentage of net collections, quoted in writing after a short review of your specialty, volume, payer mix and scope. The quote lists what is included and anything priced separately. See our pricing and the medical billing services it covers, or request a free RCM assessment to get a baseline you can use with any billing company.

Sources

Sources and notes

• U.S. Bureau of Labor Statistics, Occupational Outlook Handbook: Medical Records Specialists — median annual wage $50,250, May 2024.
• U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation — private industry, December 2025: total compensation $46.15 and benefits $13.79 per hour worked.
• Industry pricing ranges are those most commonly published by U.S. medical billing companies in 2025–2026. They are not drawn from an independent survey; actual quotes vary by specialty, volume, payer mix and scope.
• The worked example and break-even figures are illustrations, not quotes or client results.