MB Claims insights
How Much Do Medical Billing Companies Charge?
Most outsourced medical billing companies charge a percentage of collections, commonly 4% to 10%, and many add a monthly minimum for smaller practices (Physician Side Gigs). MB Claims charges 2.99%–6% of collections, or $1,000 per month, whichever is higher. What you actually pay depends on the percentage, the minimum, and what's included versus billed separately.
Summary
Compare billing quotes on four things: the percentage, the monthly minimum, what's included, and what's billed separately (credentialing, old A/R cleanup, patient statements). Then calculate your effective rate at your real monthly collections. A low headline percentage with a high minimum or a narrow scope can cost more.
What pricing models do billing companies use?
| Model | How you're charged | Works well when | Watch out for |
|---|---|---|---|
| Percentage of collections | A % of the payments collected each month | Most practices. The vendor earns more only when you collect more. | How "collections" is defined, minimum fees, what's excluded |
| Flat monthly fee | A fixed amount every month | Stable, predictable volume | Less incentive to chase hard claims; scope limits |
| Per claim | A fixed fee per claim submitted. Physician community members report roughly $3–$10 per claim (Physician Side Gigs). | High-volume, low-complexity claims | Paid whether or not the claim gets paid; follow-up may be extra |
| Hybrid | A base fee plus a percentage | Practices that want stable vendor cost with some incentive | Two moving parts to compare |
What's the typical percentage?
Physician community and industry guides commonly cite 4%–10% of collections for full-service outsourced billing. Private practices in one large physician community most often report 5%–7% (Physician Side Gigs). Smaller practices and practices that need extra services, such as coding or heavy denial work, tend to sit toward the higher end.
Make sure the percentage applies to collections (money actually received), not to billed charges.
What drives the percentage up or down?
- Specialty and coding complexity: behavioral health authorizations, cardiology diagnostics, DME documentation and timed therapy units take more work per claim
- Claim volume: steady, higher volume usually supports a lower rate
- Payer mix: Medicaid managed care, authorization-heavy plans and secondary claims need more follow-up
- Denial levels and backlog size
- Scope: coding, eligibility checks, patient statements, credentialing and reporting
- Systems: one EHR/PM system versus several portals
How do monthly minimums work?
A minimum protects the billing company when a practice's collections are low. Each month, you pay whichever is higher: the percentage fee or the minimum.
Here's how that works with MB Claims' pricing (2.99%–6% of collections or $1,000 per month, whichever is higher). The rates below are examples picked to show the math, not quotes:
| Monthly collections | Example rate | Percentage fee | You pay | Effective rate |
|---|---|---|---|---|
| $15,000 | 6% | $900 | $1,000 | 6.7% |
| $20,000 | 4% | $800 | $1,000 | 5.0% |
| $25,000 | 4% | $1,000 | $1,000 | 4.0% |
| $60,000 | 4% | $2,400 | $2,400 | 4.0% |
| $100,000 | 2.99% | $2,990 | $2,990 | 2.99% |
Takeaway: if your collections are low, the minimum matters more than the percentage. Always compute the effective rate at your real numbers.
What costs might not be in the percentage?
Ask every vendor whether these are included or billed separately:
- Setup or onboarding fees
- Cleanup of old A/R from before they start
- Credentialing and provider enrollment (often per provider or per payer)
- Patient statements and patient balance follow-up
- Clearinghouse or software fees
- Coding audits
- Termination fees, and how your data is handed over at the end
How does outsourced billing compare with in-house?
In-house billing costs more than a biller's salary. Count benefits, payroll taxes, software and clearinghouse fees, training, management time, and the cost of covering vacations and turnover. Compare that full monthly cost with a vendor's effective rate at your collections. Our outsourced vs in-house medical billing guide walks through each cost category.
How should you compare billing quotes?
- Get each vendor's percentage, minimum and exact scope in writing.
- Calculate the effective rate at your last 6–12 months of collections.
- List everything that's billed separately.
- Ask what they report monthly (denial categories, days in A/R, aging by payer) and how each KPI is defined.
- Confirm they'll sign a BAA before accessing PHI, and ask how access is granted and removed.
- Read the term and termination sections, including data handover.
Be cautious with "guaranteed" collection increases. Collections depend on documentation, payer rules, eligibility and enrollment, and no vendor controls all of those.
What does MB Claims charge?
- 2.99%–6% of the collections on the claims we manage, or $1,000 per month, whichever is higher
- Your exact percentage is set after a free medical billing audit, based on specialty, volume, payer mix and scope
- The standard billing workflow is included: charge entry or review, coding review when in scope, claim scrubbing and submission, payment posting, denial follow-up and appeals, A/R follow-up, and monthly reporting
- Credentialing, old A/R cleanup and virtual assistant support are quoted separately after the audit
- We sign a BAA with every client before we access PHI (HIPAA & security)
Sources and further reading
- Physician Side Gigs: What percentage of collections should you pay a billing company?
- AAFP: Practice finances and revenue cycle management
Related: Pricing · Medical billing vs RCM · Medical billing services · Medical billing onboarding checklist
Common questions
FAQ
What percentage do medical billing companies charge?
Commonly 4%–10% of collections, with 5%–7% often reported by private practices. MB Claims charges 2.99%–6%, with a $1,000 monthly minimum.
Is a percentage of collections better than a flat fee?
For most practices, yes, because the vendor only earns more when you collect more. Flat fees can suit very stable volume. Compare effective cost either way.
Why do billing companies have minimums?
Every account has fixed setup and follow-up work, whatever its volume. A minimum covers that work in low-collection months.
Does the percentage include credentialing?
It depends on the vendor. At MB Claims, credentialing is quoted separately after the free audit.
How do I find my effective rate?
Divide what you'd pay in a month by that month's collections. For example, $1,000 ÷ $20,000 = 5%.