How Much Does Outsourced Medical Billing Cost?
This is one of the first questions practices ask when they start looking at outsourcing. The answer is more nuanced than most billing company websites let on.
The standard pricing model: percentage of collections
Most medical billing companies charge a percentage of your monthly collected revenue, not what you bill. That distinction matters. You pay based on what actually comes in, not what you submitted.
The standard range is 4% to 9% of net collections. Where you fall in that range depends on several factors:
- Specialty complexity. Cardiology, orthopedics, and neurology billing involves more complicated coding and higher denial management demands. These specialties typically land at the higher end of the range.
- Claim volume. Higher volume practices often get better rates because the billing company’s fixed costs are spread across more claims.
- Scope of services. Some companies quote a low headline rate and then charge extra for denial management, patient billing, credentialing, and reporting. Make sure you know what’s included.
- Practice size. Solo and small group practices generally pay more as a percentage than large multi-provider groups.
Per-claim pricing
Some billing companies charge a flat fee per submitted claim, typically $4 to $10 per claim. This model works well for practices that perform a small number of high-value procedures. It can get expensive for practices that see a high volume of lower-value visits.
What does that actually mean in dollars?
For a small family practice collecting $400,000 per year:
- At 4%: $16,000 per year
- At 7%: $28,000 per year
- At 9%: $36,000 per year
Compare that to the true cost of an in-house biller: $65,000 to $90,000 per year when you include salary, benefits, software, and overhead.
The math usually favors outsourcing for practices with fewer than 10 providers.
Watch out for these fee structures
Some companies advertise rates as low as 2% to 3%. Read the fine print. Rates that low almost always exclude denial management, coding, patient collections, or all three. What looks like a bargain can end up costing you more in unresolved denials than you save in fees.
Is there a setup fee?
Most reputable billing companies don’t charge a setup fee, or if they do it’s a one-time charge in the $200 to $500 range. Be cautious about any company asking for thousands upfront.
How to evaluate whether it’s worth it
The real question isn’t the percentage; it’s what you get for it. Ask any billing company you’re evaluating for their average denial rate, their average days in AR for clients in your specialty, and what’s included in their base fee. Those numbers tell you more than the rate does.
FluxCura offers transparent pricing and a free billing audit before you commit to anything. Start at [/contact/#get-quote]. Get your free quote.
