Before comparing billing companies on service quality, it helps to understand how they’re priced — because the pricing model itself changes the incentives at play, not just the monthly cost.
Percentage of Collections
The most common model: the billing company is paid a percentage of what they actually collect for you, typically in a range roughly between 4% and 9% depending on specialty, claim complexity, and volume. This model aligns incentives well — the billing company only gets paid when you get paid — but total cost scales with revenue, which matters to model at higher volumes.
Flat Fee
A fixed monthly fee regardless of collections volume. This gives predictable budgeting, but removes some of the built-in incentive alignment of percentage-based pricing — it’s worth confirming what level of denial follow-up and appeals work is included at a flat rate versus billed separately.
Per-Claim Pricing
A set fee per claim submitted, regardless of the claim’s value or whether it’s ultimately paid. This can work for low-complexity, high-volume practices, but claim value and denial complexity vary enough by specialty that it’s worth confirming per-claim pricing doesn’t create a disincentive to spend time on complex appeals.
What to Ask Regardless of the Model
- Is denial management and appeals work included, or billed separately?
- Is patient statement generation and support included?
- Are there setup fees, minimum monthly fees, or cancellation terms?
- How does pricing change as claim volume grows?
Matching the Model to Your Practice
High-volume, high-value specialties (like cardiology or orthopedics) often do well on percentage-of-collections, since the incentive to chase every dollar scales with claim value. Very high-volume, lower-complexity practices sometimes find flat-fee or per-claim pricing more predictable — the right fit depends on specialty, volume, and payer mix.
Frequently Asked Questions
What’s a typical percentage-of-collections rate?
Rates commonly range from roughly 4% to 9% of collections, varying by specialty, claim volume, and the scope of services included — always confirm exactly what’s bundled into that percentage.
Are there hidden fees to watch for?
Setup fees, minimum monthly charges, and separate fees for denial appeals or patient statement handling are the most common extras — ask for a complete fee schedule before signing.
Does pricing model affect service quality?
Not directly, but it can affect incentives — percentage-of-collections aligns the billing company’s payment with your revenue, which is worth weighing alongside cost when comparing options.
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