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How Much Does a Medical Billing Service Cost?

Most medical billing services are paid about 5.67% to 6.18% of the money they are able to collect.
Percentage pricing is the most common fee structure. Your practice will pay the billing service a set percentage of the money collected from the insurance company and/or patient. Under this type of agreement, the billing company only gets paid if you get paid.

The cost of using a medical billing service will depend on several factors, including:

1. Number of doctors in the practice. The overall expense for using a medical billing services will be higher for larger medical practices.

2. Patient volume. How many patients are seen each day? Each week? Each time a patient is seen by the doctor a new claim will need to be processed. However, larger practices may be able to negotiate a lower rate - based on the increased patient volume.

3. Average claim amount. This dollar amount of each insurance claim can vary greatly. Claims amounts can range from $40 to thousands of dollars. For example, a chiropractor usually collects much less than an anesthesiologist. The claim for an office visit will typically be much less than one for a surgical procedure.

4. Scope of work. How much of the process your practice is looking to outsource. A wide variety of services are available, including medical coding, patient invoicing, denial and appeal follow-up, patient customer service, claim research, and credentialing. The amount of time required to complete these tasks will also depend on the complexity of each claim and how much followup is required.

5. Add-on services. Many billing services offer additional products and services. They are often designed to improve the efficiency of your medical practice. For example, they may offer you access to their practice management software or electronic medical record (or EMR) solutions.

6. Signing a contract. Signing a contract can be a great way to secure a discounted rate. By agreeing to a multi-year contract, the billing service may be willing to accept a lower percentage of the money they collect on your behalf.

7. Initial set-up fees There are some additional costs associated with setting up this type of service. Set-up fees are often based on the number of clinicians in the practice. Larger practices can expect higher startup costs.

Average Medical Billing Service Rates by City
Austin, TX5.19% - 5.64% of amount collected
Baltimore, MD6.48% - 7.06% of amount collected
Boston, MA7.19% - 7.83% of amount collected
Columbus, OH5.00% - 5.44% of amount collected
Denver, CO5.56% - 6.05% of amount collected
Indianapolis, IN4.73% - 5.15% of amount collected
Jacksonville, FL5.04% - 5.49% of amount collected
Los Angeles, CA7.42% - 8.07% of amount collected
Oklahoma City, OK4.98% - 5.42% of amount collected
Philadelphia, PA6.87% - 7.48% of amount collected
Phoenix, AZ5.47% - 5.95% of amount collected
Seattle, WA6.59% - 7.17% of amount collected
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