Medical billing services handle claim submission, payment posting, denial follow-up, and patient statements for physician practices, therapists, chiropractors, dental offices, and other providers. Most are solo billers or small firms that bill each client monthly, usually as a percentage of what the practice collects or as a flat monthly fee. Invoices need to tie the fee back to collections, claim volume, or specific projects so the practice can see what it paid for.
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The most common model is a percentage of net collections, typically 4% to 9% depending on practice size, specialty, and how much of the revenue cycle you handle. Larger practices with high volume pay toward the low end, while small solo practices often pay more. Some billers charge a flat monthly fee based on provider count, or a per-claim fee, commonly $3 to $8 per claim submitted. Hourly rates apply to project work such as credentialing, AR cleanup, and coding review. Many billers add a monthly minimum so that a slow collection month does not leave them underpaid. One-time setup fees cover clearinghouse enrollment, EDI and ERA setup, and loading the fee schedule into the practice management system. Credentialing is usually a separate flat fee per payer or per provider. Make clear whether your percentage applies to payments received or to charges billed, and whether patient payments collected at the front desk are included.
| Service | Priced | Typical range |
|---|---|---|
| Full-service billing (claims, posting, denials, statements) | percent of net collections | 4%-9% |
| Flat monthly billing fee, small practice | per provider per month | $350-900 |
| Claim submission only | per claim | $3-8 |
| Accounts receivable cleanup (aged claims over 90 days) | per hour | $40-85 |
| Payer credentialing and enrollment | flat fee per payer | $150-400 |
| Practice setup and clearinghouse enrollment | flat fee | $250-1,000 |
| Denial appeals and reprocessing | per appeal or per hour | $25-75 per appeal |
| Patient statement mailing and phone follow-up | per statement or per month | $1-3 per statement |
Typical US ranges. Rates vary by region, experience, and job size.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Billing services, March 2025 - 6% of net collections ($38,400 collected) | 1 flat fee | $2,304.00 | $2,304.00 |
| Patient statements mailed (print and postage) | 142 statement | $1.75 | $248.50 |
| AR cleanup, claims over 120 days (Aetna and UnitedHealthcare) | 6 hour | $55.00 | $330.00 |
| Credentialing application, Blue Cross Blue Shield (Dr. Patel) | 1 flat fee | $275.00 | $275.00 |
| Total | $3,157.50 | ||
Notes: Collections figure is based on ERA and patient payments posted March 1-31 and is attached in the monthly report. Payment due within 15 days of invoice date. Payments by ACH preferred. A 1.5% monthly fee applies to balances over 30 days past due.
A percentage fee needs a clear dollar figure and date range so the practice can check it against its own deposits and your reports.
Multi-provider practices often allocate costs by provider, and credentialing or per-provider fees need to be traceable.
Per-claim and per-statement charges are easy to dispute without volume numbers that match your system reports.
AR cleanup, appeals, and credentialing are tied to specific payers, and listing them shows what was done and for whom.
Clearinghouse fees, postage, printing, and paper claim costs should be shown apart from your service fee so they are not mistaken for markup.
Noting the BAA on file reminds the client that you handle protected health information under HIPAA, and keeps the paperwork connected to the billing relationship.
The fee percentage, minimums, and what counts as collections are defined in the contract, so referencing it settles most questions.
Most medical billing services invoice monthly after the month's payments have been posted, so the invoice reflects actual collections. Net 15 is common, and net 30 is also seen, especially with larger groups. Some billers pull their fee directly by ACH from the practice account under a signed authorization, which cuts down on late payments. Setup and credentialing fees are often collected upfront or at 50% deposit, since they require work before any revenue arrives. Late fees of 1% to 1.5% per month are typical when written into the contract. Avoid taking payment out of the practice's deposits without written authorization, and keep your fee accounting separate from patient funds. Do not accept payment by sending patient information over unsecured email.
Specify whether your percentage applies to insurance payments only or also to patient payments, copays collected at the desk, and recoupments. Also state how refunds and payer takebacks are handled, because a payer clawback months later can change what the base amount should have been.
A percentage fee falls when a provider takes vacation, a payer delays payment, or a practice has a slow month. A minimum monthly fee based on provider count covers your fixed workload.
Send the collections summary, aging report, and denial report with each invoice. Clients who can see the work are less likely to question the fee or ask for discounts.
New clients often arrive with months of unbilled charges or unworked denials. Bill that work hourly or as a flat project, or negotiate a higher percentage on recovered old AR, rather than burying it in the standard rate.
Waiting to invoice until all payments are posted keeps the amount accurate, but delay past the first week or two of the following month stretches your own cash flow. Pick a fixed invoicing date and stick to it.
Collections is the standard for percentage billing because it aligns your pay with the practice getting paid. Billing on charges would mean you earn the same when claims are denied, and most practices will not agree to that.
Many contracts include a tail period, often 60 to 90 days, in which you are paid a percentage on claims you submitted before termination. This must be written in the service agreement, since it is difficult to enforce otherwise.
Yes, if your agreement says so. List them as a separate pass-through line at cost, or include them in the base fee and say so. Hidden charges cause more disputes than higher honest rates.
If you handle protected health information for a covered entity, HIPAA generally requires a business associate agreement before you start. It is separate from your invoice, but you should have it signed before accessing any patient data.
Point to the collections report and the contract definition. If the dispute is about timing, the invoice should be based on posted payments in the billing period, so payments received later fall into the next invoice.
Send a Medical Billing Service estimate for approval, then turn it into an invoice when the work is done.
Medical Billing Service estimate template