Key takeaways
- Most medical billing companies charge 4% to 10% of collections; flat per-claim fees typically run $4 to $10 per claim.
- Always pay on money collected, never on charges billed.
- Low-volume, high-complexity specialties such as behavioral health often pay toward the top of the range.
- Compare total cost against the extra revenue collected, not the percentage alone.
Medical billing company fees are one of the first questions practice owners ask, and one of the hardest to compare, because companies price in different ways and include different services. A 5% quote and an 8% quote can end up costing the same once setup fees, extras and collection performance are counted.
This guide explains how medical billing companies charge, what percentage is typical in 2026, what drives the price up or down, and how Florida practices can compare quotes fairly.
How Medical Billing Companies Charge
There are four common pricing models:
- Percentage of collections. The most common model. The company earns a percentage of the money actually paid by insurers and patients, typically 4% to 10%. It aligns the company with getting you paid.
- Flat fee per claim. Often $4 to $10 per claim submitted. Predictable for high-volume practices with simple claims, but it pays the company whether or not the claim is collected.
- Flat monthly fee. A fixed amount, common for very small practices with stable volume.
- Hybrid. A lower base fee plus a smaller percentage, used by some larger groups.
What Percentage Do Medical Billing Companies Charge?
| Practice profile | Typical percentage of collections |
|---|---|
| High-volume primary care or multi-provider group | 4% to 6% |
| Typical specialty practice | 5% to 8% |
| Low-volume or solo practice | 7% to 10% |
| Behavioral health, therapy and complex specialties | 6% to 10% |
These are common market ranges, not quotes. The right percentage depends on claim volume, average claim value, specialty complexity and how much of the revenue cycle the company runs.
What Drives Medical Billing Fees Up or Down
- Claim volume: more claims usually means a lower percentage.
- Average claim value: low-value claims cost the same effort to process, so percentages are higher.
- Specialty: time-based codes, authorizations and modifiers add work.
- Scope: coding, credentialing, eligibility checks, patient statements and old A/R clean-up may be included or extra.
- Payer mix: Medicaid managed care and auto PIP claims in Florida take more follow-up.
- Software: whether the company uses your EHR or provides its own.
Hidden Costs to Ask About
- Setup or onboarding fees.
- Charges for working old A/R from a previous biller, often a higher percentage.
- Extra fees for appeals, patient statements or credentialing.
- Minimum monthly fees regardless of collections.
- Software or clearinghouse fees passed through to you.
- Termination fees or long notice periods.
Percentage vs Value: A Worked Example
Consider a practice collecting $60,000 a month with an in-house net collection rate of 90%.
- Billing company A charges 5% but keeps collections at 90%: fee $3,000 a month.
- Billing company B charges 7% but raises the net collection rate to 96% by working denials and old claims. Collections rise to about $64,000 and the fee is roughly $4,480.
Company B costs about $1,480 more in fees but brings in roughly $4,000 more revenue, leaving the practice about $2,500 a month better off. The lowest percentage is not always the lowest cost.
In-House Billing Costs for Comparison
One full-time biller in Florida typically costs $45,000 to $65,000 a year in salary and benefits, plus billing software, clearinghouse fees, training and cover for leave. For many small practices, an outsourced fee of 5% to 8% costs about the same as one employee but provides a whole team and better denial management.
How to Compare Quotes Fairly
- Ask each company to review 90 days of your claims and denials.
- Get every fee in writing, including extras and minimums.
- Ask for expected clean claim rate, denial rate and days in A/R after 90 days.
- Confirm fees are charged on collections.
- Check contract length, notice period and data ownership.
- Speak to two references with a similar specialty and size.
From Our Experience with Florida Practices
When Florida practices send us their current billing reports, the biggest cost is rarely the billing fee itself. It is usually unworked denials and claims that aged past timely filing, which can quietly reach several percent of annual revenue. That is why we start every engagement with a free A/R audit and show the recoverable amount before discussing price. See our medical billing services.
Questions to Ask Before Signing
- What exactly is the percentage applied to: insurance payments, patient payments or both?
- Is there a minimum monthly fee, and when does it apply?
- Are appeals, patient statements and credentialing included?
- How will you handle claims from before you started, and at what rate?
- What KPIs will you report monthly, and what targets do you commit to?
- What is the notice period, and how do I get my data back if I leave?
Clear written answers to these six questions remove almost every surprise from medical billing fees.
How Medihike Can Help
Want this done for your practice? These services put the ideas in this article into practice:
Related
- Medical billing services
- Outsource medical billing
- How to choose a medical billing company
- Outsourcing medical billing: pros, cons and costs
Frequently Asked Questions
What percentage do medical billing companies charge?
Most medical billing companies charge between 4% and 10% of collections. High-volume practices usually pay 4% to 6%, typical specialty practices 5% to 8%, and low-volume or complex specialties 7% to 10%. Always confirm the fee is based on money collected, not charges billed.
Is 7% a fair rate for medical billing?
Yes, 7% of collections is a common and fair rate for many small and mid-sized practices, especially if it includes coding review, denial management and patient statements. Judge it against the collection rate the company achieves, not the percentage alone.
Do medical billing companies charge per claim?
Some do. Per-claim pricing typically ranges from $4 to $10 per claim submitted. It is predictable for high-volume practices, but it pays the company whether or not the claim is collected, so performance guarantees matter more with this model.
Is outsourcing medical billing cheaper than hiring a biller?
Often, yes. One in-house biller in Florida costs around $45,000 to $65,000 a year plus software and training, while outsourcing at 5% to 8% of collections often costs about the same but adds a full team, coverage during leave and stronger denial follow-up.
What should be included in a medical billing fee?
At minimum: charge entry, claim scrubbing and submission, payment posting, denial management, A/R follow-up and monthly reporting. Ask separately about coding, credentialing, eligibility checks, patient statements and old A/R clean-up, which some companies charge extra for.
How do I know if a billing company is worth its fee?
Track net collection rate, days in A/R, denial rate and total collections for three months. If collections rise by more than the fee costs, the company is paying for itself. A good company reports these numbers monthly without being asked.
Sources
- CMS: Medicare billing
- HHS: Business associate agreement provisions
- MGMA: practice management benchmarks
This article is general information for practice owners, not legal, tax or clinical advice. Rules and payer policies change; confirm details with the relevant authority before acting.