How Much Do Medical Billing Companies Charge in 2026?

Medical billing companies price their work in three ways. Knowing which one a quote uses is the first step in comparing medical billing cost, and you can hold any of them against MedPrecision's published rates as a reference point.

1. Percentage of collections. A share of the money actually collected each month. It is the most common model: in Tebra's 2026 Medical Billing Benchmark Report, 28% of billing companies use a different, non-percentage payment model. The fee moves with what you collect. The OIG has flagged the other side of that arrangement: "The OIG has a longstanding concern that percentage billing arrangements may increase the risk of upcoding and similar abusive billing practices" (OIG compliance guidance for third-party billing companies, 63 FR 70138). Ask any percentage-priced vendor how its coding is audited.

2. Per-claim pricing. A flat fee for each claim submitted, whether or not the claim pays. Tebra's pricing guide for billing companies says many service providers quote per-claim fees ranging from $3 to $10; that is a vendor's guide, not a survey. Per-claim pricing gets cheaper as your average payment per claim rises, as the worked numbers below show.

3. Flat monthly fee. A fixed amount each month for a defined scope of work. We found no public source on how common it is. If you are quoted one, ask what claim volume and which tasks the fee assumes, and what happens when you exceed them.

Which of the first two actually costs less is arithmetic, not preference. Our side-by-side on percentage of collections vs per-claim pricing works the crossover point both ways and shows who absorbs the cost of a denial under each structure.

The only recent published distribution of billing-company pricing we found is Tebra's 2026 Medical Billing Benchmark Report. It surveyed 190 respondents from US medical billing companies, fielded December 1-17, 2025. These are shares of billing companies, not of practices, and the sample leans small: 48% of the responding firms report revenue under $250K.

The same report puts it as "more than half of billing companies (63%) charge 7.99% or less on percentage-based pricing." It does not break pricing down by practice size or specialty, and we found no public source that does. Treat any table of "fair" rates by practice size or specialty as one vendor's opinion unless it names its data.

What moves the percentage you are quoted is specific to your practice. Ask each vendor how these change its number:

1. Collections and claim volume, including whether the rate steps down at volume tiers and where the breakpoints sit.
2. Specialty, and which of your services the vendor treats as complex.
3. Payer mix, especially the share of Medicaid and Medicare Advantage claims.
4. Scope: claim submission only, or eligibility, denials, A/R follow-up, patient statements and credentialing too.
5. Locations and providers, since each one adds enrollment and setup work.

A percentage means little until you know what it applies to and what sits outside it. Before comparing quotes, get these terms in writing from every vendor:

MedPrecision's answers to each of these are on our pricing page: 7.0% of collections for a solo practice and 6.0% for a group of 2-15 providers, no setup fee, a 12-month initial term then month-to-month on 60 days' notice, and third-party costs passed through at cost. For specialty-level rules that shape a quote, see our pages on billing for specific specialties, such as orthopedic surgery billing.

Per-claim pricing charges a flat fee for each claim submitted; Tebra's guide says many providers quote $3 to $10 per claim. The fee is fixed per claim, so what it costs you as a share of revenue depends on your average payment per claim.

The math (MedPrecision arithmetic, not survey data). At $6 per claim and 800 claims per month, you pay $4,800 a month whatever those claims pay. As a share of what each claim brings in:

• If your average payment per claim is $30, that is a 20% effective rate.
• If your average payment per claim is $50, that is 12%.
• If your average payment per claim is $200, it is 3%.
• If your average payment per claim is $1,200, it is 0.5%.

When per-claim wins. Practices with a high average payment per claim pay a small share of revenue under a flat per-claim fee, so per-claim pricing tends to beat a percentage there.

When per-claim loses. Practices with many low-dollar claims pay a large share of revenue under a flat per-claim fee, so a percentage of collections usually costs less.

Run the math against your real claim volume and average payment before assuming either model is cheaper.

Medical billing service rates come in three units: a percentage of collections, a per-claim fee, or an hourly rate. The percentage and per-claim models are covered above; hourly pricing shows up mostly in part-time, overflow and project work, such as A/R cleanup, old-claim recovery or temporary cover while you hire, rather than in full-service engagements.

We found no published survey of hourly billing rates, so we do not print a market range here. For the in-house side, our billing cost calculator uses Bureau of Labor Statistics wage and benefit data for medical records specialists.

Two cautions on hourly quotes. First, hourly pricing pays for time, not results, so ask how unresolved denials are handled when the hours run out. Second, compare on effective cost, not the rate. As arithmetic: a contract biller at an assumed $35 an hour working 25 hours a week costs $45,500 a year before software; on a practice collecting $750,000, that is an effective 6.1%. Run the same effective-rate math from the hidden-fees section below on every hourly quote you receive.

These are illustrative calculations, not client results. MedPrecision publishes no case studies and no client outcomes, and every figure below is an input you should replace with your own. The collection-rate changes are assumptions used to show how the arithmetic works — not a rate we have produced for a practice, and not one we promise. We know of no public study showing that outsourcing by itself raises a practice's collection rate, so treat every collection-rate gain below as the assumption it is.

Example 1: 2-provider family practice. Annual collections: $750,000. Current in-house biller fully loaded: $68,000 (salary + benefits + payroll tax) + $9,000 software + $3,000 training/conference = $80,000/year, or 10.7% effective cost. Current net collection rate: 89%.

Quoted by outsourced billing service: 6.5% of collections, $0 setup, $0 software fee. Now assume the net collection rate closes to 95% — this is the assumption to test hardest, because the whole result comes from it, and nothing about a change of biller guarantees it. On the same allowed charges, 95% would be annual collections of $800,000. Outsourced cost: 6.5% × $800K = $52,000.

Net economic impact: +$50,000 collected (collection rate gain) + $80,000 in-house cost saved − $52,000 outsourced cost = +$78,000/year.

Example 2: 5-provider mental health group. Annual collections: $1.8M. In-house biller team: 1.5 FTE = $115,000 fully loaded + software = $130,000. Current net collection rate: 91%. Outsourced quote: 6% of collections.

Assume the net collection rate closes to 96%. New collections: $1.9M. Outsourced cost: 6% × $1.9M = $114,000.

Net impact: +$100,000 collection rate gain + $130,000 in-house savings − $114,000 outsourced = +$116,000/year, plus eliminated single-biller turnover risk.

Example 3: When NOT to outsource. 3-provider primary care group already collecting at 96% with a long-tenured biller (fully loaded $58,000) on stable software. Outsourced quote: 5.5% on $1.1M = $60,500. Even matching the current 96% collection rate, outsourcing costs slightly more than in-house. Migration risk + minimal upside = stay in-house.

The pattern: outsourcing wins when there's a collection-rate gap to close. When the gap is small or zero, the math is roughly neutral and the migration risk argues for staying.

A headline percentage can hide a higher effective rate once line items are added. These are the fees to ask about, line by line:

1. Setup or onboarding fees. These are common. In Tebra's 2026 Medical Billing Benchmark Report, 39% of billing companies always or often charge setup fees, and the share that never charges them fell from 36% in 2023 to 19% in 2025. Ask for the amount and what it covers.

2. Software or platform fees. A separate monthly charge for the vendor's system, on top of the percentage.

3. Patient billing fees. Statement printing, postage and electronic patient billing, billed outside the percentage.

4. Denial appeal fees. A charge per appeal. Ask whether appeals are part of the core service.

5. Credentialing fees. Credentialing is a separate service, and reasonable to price separately. In the same Tebra report, 72% of billing companies offer credentialing as an add-on service, up from 57% in 2023. Ask whether re-credentialing and keeping provider profiles current are included.

6. Termination fees. A charge for leaving before the term ends. Ask whether there is one and how it is calculated.

7. Statement printing and postage. Ask whether these pass through at cost or carry a markup.

8. Monthly minimum fees. A floor that raises your effective rate in a low-volume month. MedPrecision's solo tier carries one, so the test is whether the amount is in writing before you sign.

9. Auto-renewal language. Check whether the contract renews on its own, for how long, and how much notice ends it.

10. Implementation overage fees. Onboarding that includes a set number of integration hours, with extra hours billed by the hour.

The right way to evaluate pricing is total annualized cost as a percentage of collections, not the headline percentage. Always do the math:

Effective Rate = (Total Annual Fees + Amortized Setup + Software Fees + Other Line Items) ÷ Annual Net Collections

A low headline rate can be a real saving or a different scope of work. These questions tell the two apart:

1. Who does the work, and where? Ask about team size, location and specialty experience for your kind of practice.
2. What does the rate cover? Denial management, A/R follow-up, patient billing and reporting may each be included or extra.
3. What is the term? Ask for the initial term, the notice period after it and any termination fee.
4. What is billed on top? Get every add-on fee listed, then run the effective-rate formula above.
5. What will you see each month? Ask for a sample report, and whether you get direct access to claim status.
6. Is there a minimum? Ask for the monthly minimum in writing.
7. What happens to your data if you leave? Ask whose software the claims live in and how you export them.

A narrow scope or an offshore team is not a problem in itself. The point is to compare quotes that cover the same work.

Headline pricing matters less than what you net after fees. As illustrative arithmetic, with assumed collection rates rather than measured ones, take two billing companies on a practice with $1M in allowed charges:

Scenario A: 4% billing fee, 91% net collection rate.

• Collections: $910,000
• Fees: $36,400
• Net to practice: $873,600

Scenario B: 7% billing fee, 96% net collection rate.

• Collections: $960,000
• Fees: $67,200
• Net to practice: $892,800

The 'expensive' company nets you $19,200 more per year on a $1M practice. Over 5 to 10 years at the same assumptions, that is $96,000 to $192,000. The result turns entirely on the collection-rate difference, so ask each vendor how it measures and reports net collection rate.

Total Cost of Ownership (TCO) framework. TCO over a 3-year horizon includes:

• Monthly billing fees
• Setup fees amortized over contract term
• Software / platform fees
• Patient billing fees
• Opportunity cost of revenue NOT collected (collection rate gap × allowed charges × 36 months)
• Transition cost if you switch vendors mid-contract

The vendor with the best TCO is rarely the one with the lowest monthly percentage.

You can ask for terms as well as a rate. Reasonable requests to put to any vendor:

1. A lower rate for a longer initial term. Ask whether committing for longer changes the percentage.

2. Volume tier breakpoints. Ask where the percentage steps down as collections grow, and negotiate where the breakpoints sit.

3. A setup fee waiver. Ask whether the setup fee can be waived or credited against early invoices.

4. Software or platform fee bundling. If the vendor charges a separate platform fee, ask for it to be folded into the percentage.

5. Performance measures in writing. Ask which targets the vendor reports against, such as net collection rate, days in A/R, denial rate and clean claim rate, and how each is calculated.

6. Pricing reviews. Ask for a review cadence as your volume changes.

7. A shorter notice period. A shorter notice period after the initial term makes the relationship lower-risk for you.

8. Fees tied to results. Ask whether any part of the fee is linked to measured results, and how the baseline is set.

Whatever you agree, get it into the contract rather than the sales email.