The first few months of the year are hard on a medical practice's cash flow. Many patients' deductibles reset in January, so more of each visit lands on the patient. Insurance plans change, claims get denied for new reasons and front-desk staff are learning new rules on the fly. By March, plenty of owners look at their aging reports and wonder whether it's time to hire a medical billing company, or to replace the one they have.
This guide walks practice owners and managers through what billing companies do, what to ask and what to watch for. It's general business guidance, not legal or compliance advice. Review any contract with a healthcare attorney.
Signs it may be time to outsource your billing
Not every practice needs outside help. These signs suggest it's worth a look:
- Claim denials keep rising, or denied claims sit without follow-up
- Accounts receivable keep getting older, and no one has time to work them
- Your biller left, or one person holds all the knowledge
- Credentialing with new insurers drags on and delays new providers
- You're adding a location, provider or specialty and your team can't keep up
- You don't trust your numbers, or no one can explain them
If you already use a billing company and these problems persist, that's a sign too.
What a medical billing company actually does
Most companies offer some or all of what's often called revenue cycle management, which covers the path from appointment to payment:
- Eligibility checks before visits, to confirm coverage
- Medical coding review, so diagnoses and procedures are coded correctly
- Claim submission to insurers, usually through a clearinghouse
- Payment posting and reconciliation
- Denial management: finding out why a claim was rejected, fixing it and resubmitting or appealing
- Patient statements and payment follow-up
- Credentialing with insurers for new providers
- Reporting so you can see what's happening
Ask exactly which of these are included. "Full service" means different things to different companies.
Questions to ask a medical billing company before you sign
About experience
Which specialties do you work with most?
Billing for physical therapy, behavioral health, dental, labs and surgery each has its own quirks.
Do you work with practices our size?
A solo practice and a multi-site group need different service.
Who will handle our account?
Will we have a named contact? How long have they worked there?
Are your coders certified?
Ask about credentials such as CPC or CCS.
About pricing
- How do you charge? Common models include a percentage of collections, a fee per claim or a flat monthly fee. Each has trade-offs.
- What counts toward the fee? For percentage-based pricing, ask whether it applies to all collections or only what the company collects.
- Are there setup, software or termination fees?
- What will it cost to work old receivables from before you signed?
About performance and reporting
- What reports will we get, and how often? Monthly reports should cover collections, denials and aging receivables at minimum.
- What do you track? Ask how they measure things like claim denials, clean claims, days in accounts receivable and net collections, and how they've improved those numbers for similar practices. Be cautious of anyone who promises specific results before seeing your data.
- How fast do you submit claims and work denials? Ask for their standard timelines.
About compliance and security
- Will you sign a business associate agreement? Any company that handles protected health information on your behalf should. If they hesitate, walk away.
- Where is the work done, and by whom? Ask whether any work is done by subcontractors or teams in other locations, and how they protect patient data.
- How do you control access to our practice management system?
About data and leaving
- Who owns our data? It should be you.
- How do we end the contract, and what notice is required?
- What happens to claims in progress if we leave? Get the transition plan in writing.
Red flags in outsourced billing
- Guaranteed collection increases before they've reviewed your accounts
- Vague answers about who does the work or where
- No business associate agreement, or reluctance to sign one
- Long contracts with heavy penalties for leaving
- No regular reporting, or reports you can't understand
- Suggestions to code more aggressively to raise payments. Coding should reflect the care provided, nothing more.
Treat it like any important vendor decision. Our checklist for choosing an IT services provider uses the same logic: scope, price, security and exit terms, all in writing.
Making the switch smoothly
Changing billing arrangements can briefly slow cash flow if it's rushed. Plan for:
- A start date that gives time for setup and system access
- Clear ownership of old claims, so nothing falls between the cracks
- A short overlap where your team and the new company both watch the numbers
- A weekly check-in for the first couple of months
- Training for your front desk, since accurate insurance details at check-in prevent many denials later
Where to find medical billing companies
On Listings Junkie, many billing and revenue cycle firms are listed under health and medical, such as health and medical in Texas, while others appear under business services, like business and professional services in New Jersey and New Mexico.
A few examples listed on the site:
- StreamRCM in El Paso, Texas, describes revenue cycle management services aimed at accurate billing, faster reimbursement and steady cash flow.
- Cosmos Medical Management in Krugerville, Texas, describes serving physicians with billing, coding, credentialing and new practice setup since 2007.
- EZE Medical Billing describes itself as a medical billing and revenue cycle management company based in Albuquerque.
These are examples, not endorsements. Interview at least three companies and compare their answers side by side.
Don't forget your own practice's listing
Billing problems often start before the visit, when patients book with the wrong insurance or show up at the wrong time. Keep your practice's listing current with the insurance you accept, your hours and how to book. Our guide to what makes a great business listing has a simple checklist.
Frequently asked questions
How much does a medical billing company cost?
It varies by specialty, volume and services. Many charge a percentage of collections, while others charge per claim or a flat monthly fee. Get written proposals and compare total cost, not just the headline rate.
Is it better to keep billing in-house?
It depends on your size, specialty and staff. In-house billing gives more direct control. Outsourcing can add expertise and coverage when staff leave. Some practices use a mix.
What is a business associate agreement?
It's a contract required under federal health privacy rules when a vendor handles protected health information for a healthcare provider. It sets out how the vendor must protect that information.
How long does it take to switch billing companies?
It depends on your systems and the company. Plan for several weeks of setup and a period of overlap, and agree in writing on who handles claims already in progress.
If you own a practice or run a billing firm, you can list your business free on Listings Junkie. There's no credit card, listings are checked before they go live, and you can update your services and insurance details whenever they change.
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