What Should Be in a Medical Billing Service Agreement?

A medical billing service agreement should clearly define the scope of services, how you are charged, what reports you receive, who owns your data, and how either side can exit. It should also include a signed business associate agreement (BAA). MB Claims signs a BAA with every client, and you should expect the same from any vendor. MB Claims supports this through its medical billing service.

Which services should the scope list?

The scope should name every task the vendor owns, from charge entry and claim submission to payment posting, denial follow-up, and patient statements. Anything left vague tends to become a dispute later, so list inclusions and exclusions in plain words.

Ask the vendor to spell out each workflow rather than rely on a phrase like "full billing." A clear scope of services typically addresses:

• Front end: eligibility verification, charge capture review, and coding support if coding is included.
• Claims: submission, clearinghouse rejection handling, and corrected claims.
• Back end: payment posting, A/R follow-up, denial management, and appeals.
• Add-ons: credentialing, payer enrollment, and patient statement or collections work, listed separately if priced separately.

If you want billing and credentialing handled together, confirm both appear in the same document. Our medical billing page outlines how these pieces fit.

How should pricing and reporting be written into the contract?

The contract should state exactly what you pay and what that fee is based on, such as a percentage of collections or a flat fee, and which charges fall outside it. It should also list the reports you receive and how often, so you can verify performance yourself.

Pricing language should leave no room for surprise. Confirm the following:

• The pricing basis (percentage of collections, per-claim, flat fee, or a hybrid) and what counts as collected revenue.
• Whether setup, onboarding, software, clearinghouse, or statement fees are extra.
• The reporting schedule, such as monthly financial summaries, A/R aging, denial reports, and clean claim rate.
• Any performance expectations, written as measurable targets you can review.

Pricing varies by specialty, volume, and scope, so compare quotes on the same basis. Avoid agreements that promise specific results, since collections depend on payer mix and documentation.

What termination terms protect the practice?

Look for a reasonable notice period, the right to exit without a long lock-in, and a defined runout period for claims already submitted. The agreement should also say how your data and records are returned so a transition does not interrupt cash flow.

Termination terms are where many practices get stuck. Check for:

• Notice period: how many days either party must give, and whether early termination carries a penalty.
• Termination for cause: your right to leave if reports are missed or obligations are not met.
• Runout terms: who works open A/R after you leave, for how long, and how fees apply to late collections.
• Data return: delivery of claims history, A/R detail, and payer correspondence in a usable format.

If you are planning a change, see how to switch medical billing companies smoothly and keep revenue moving during the handoff.

Why does a BAA matter?

A business associate agreement governs how a vendor may handle protected health information on your behalf. Without one, you have no written assurance about safeguards or breach responsibilities. It should be signed before any patient data is shared.

Because a billing vendor sees patient and claim data, a BAA is a standard part of the relationship, not an optional extra. It generally covers permitted uses of PHI, required safeguards, breach notification duties, and what happens to PHI when the contract ends.

Confirm the BAA is signed before onboarding and that the service agreement refers to it. This article is general guidance, not legal advice, so have your attorney or compliance advisor review the final language.

Who owns the data and records?

Your practice should own its patient accounts, claims history, payer correspondence, and reports, and the agreement should say so. It should also state how you can access that data during the contract and in what format it is returned afterward.

Data ownership is easy to overlook until you want to leave. The agreement should confirm that your practice owns its records, that you can access billing system data on request, and that exports come in a standard, usable format. Ask who holds the clearinghouse and payer portal logins, since access tied only to the vendor can complicate a transition.

How MB Claims handles this

MB Claims signs a business associate agreement with every client before patient data is shared. We put the scope of services in writing, including which billing, coding, and credentialing tasks we own, so responsibilities are clear from day one. You receive regular reporting so you can review performance yourself, and your practice keeps ownership of its records. We do not promise specific collection results, because outcomes depend on payer mix and documentation. If you want a second opinion on your current agreement or billing performance, we offer a free medical billing audit that you can use to compare terms before you sign.

Frequently asked questions

Should a billing contract include a performance guarantee?

Be cautious of guarantees, since collections depend on payer mix and documentation. It is better to see defined reporting and measurable targets you can review, such as clean claim rate and A/R aging, rather than a promised outcome.

How long should a medical billing contract last?

Term lengths vary by vendor. What matters more is a fair notice period, termination for cause, and clear runout terms. Be wary of long lock-ins that make it costly to leave if service falls short.

Who is responsible for credentialing in a billing agreement?

Only the vendor, and only if the agreement says so. If you want credentialing or payer enrollment included, list it in the scope of services explicitly, or it may be treated as a separate engagement.

Does the vendor need to be HIPAA compliant?

Any vendor handling PHI should operate under a signed BAA and follow HIPAA safeguards. Ask how they protect data, and confirm specifics with your compliance advisor, since this article is not legal advice.

MB Claims · www.mbclaims.com

Add us as a preferred source on Google

← Back to blog