How to Choose a Medical Billing Company

Before you start: know your own numbers

You can't judge a proposal without a baseline. Before the first call, pull twelve months of: claims submitted, net collections, denials by payer and reason, days in A/R, and A/R aging (0–30, 31–60, 61–90, 91–120, 120+ days). Your EHR or practice management system can usually produce these; if your current biller can't, that is itself a finding. The formulas are on the benchmarks page.

Write down, too, what is actually going wrong. Late claims? Denials no one works? Patient balances nobody chases? Turnover? The right company is the one that fixes your problem, not the one with the longest feature list.

The evaluation framework, step by step

1. 01

   Define the scope you're buying

   List each step of the cycle and mark who should own it: eligibility, prior authorization, coding, charge entry, scrubbing and submission, payment posting, denials and appeals, patient statements and calls, credentialing, reporting. Give every company the same list.

   • Does the proposal say in writing which steps it covers and which it doesn't?
   • Is coding included, excluded, or offered separately? Coding is a separate discipline: know which you're getting.
2. 02

   Check EHR and clearinghouse compatibility

   The company has to work with the system your clinicians already use, or you'll pay for the switch in staff time.

   • Do they work inside your EHR, integrate with it, or require a different system?
   • Which clearinghouse, and who pays for it?
   • How do charges get from your EHR to them, and how fast?
   • How many current clients use your EHR? Ask for a reference among them.
3. 03

   Test exception and denial handling

   Routine claims go through on their own; what you're paying for is what happens when one doesn't. Ask them to walk through a real denial from your specialty.

   • Who sees a denial first, a person or a work queue, and within how many business days?
   • Do they fix the root cause (a front-desk habit, a payer rule) or just resubmit?
   • What needs your staff's input, and how do they ask for it?
   • How do they track timely-filing and appeal deadlines? Medicare's filing limit is one calendar year after the date of service (42 CFR 424.44); commercial payers set their own.
4. 04

   Read the reporting before you buy it

   Ask for a de-identified sample of the monthly report you would receive.

   • Does it show collections, initial and final denial rates by payer and reason, days in A/R and aging?
   • Do you get live access to your own data, or only a monthly PDF?
   • Are the metric definitions written down, so you can recompute them? (definitions)
5. 05

   Look at staffing and continuity

   Billing knowledge lives in people. Ask who works your account and what happens when they leave.

   • Is there a named contact? How many accounts do they handle?
   • Where are billers located, and do they have access to your systems from there?
   • Who covers vacations and turnover?
6. 06

   Read the contract terms

   The contract decides what you can do if it isn't working.

   • Term, auto-renewal and notice period.
   • Termination fees and any minimum monthly fee.
   • What happens to claims in flight after termination, and what you pay on them.
   • Data ownership and the export format and deadline.
   • Fee basis, written precisely: what counts as a 'collection' or a 'claim'.
   • Where payer payments go. Medicare restricts paying a billing agent whose fee depends on amounts billed or collected (42 CFR 424.73(b)(3); CMS manual §30.2.4).
7. 07

   Confirm HIPAA safeguards

   A billing company is a HIPAA business associate: it performs billing and claims processing for you and must sign a business associate agreement (HHS).

   • Will they sign your BAA, or show theirs against HHS's sample provisions?
   • How do they meet the Security Rule: access controls, audit logs, encryption?
   • Which subcontractors touch your data, and do they have BAAs too?
   • How, and how fast, will they tell you about a breach?

A scorecard you can use

Score each company 0–2 on each criterion: 0 if they couldn't answer or show it, 1 if they answered but couldn't prove it, 2 if they showed you (a report, a contract clause, a walk-through). Proof beats promises.

Red flags

• Guaranteed collection increases or denial rates, with no definition and no client data behind them.
• No sample report before signing.
• Payer payments routed to the company's account rather than yours.
• A contract with no data-export clause, or one that charges to release your data.
• Reluctance to sign a business associate agreement.
• A percentage fee that applies to everything collected, including old A/R and patient payments at your front desk, without saying so up front. HHS-OIG has long flagged percentage billing arrangements as a risk for upcoding (OIG guidance).

Where to start

Shortlist one company from each model that could fit you (see types of billing companies): independent and small-to-mid-size practices that want a full service with automation can start with an AI-assisted service such as Altair Health, and score it alongside a traditional firm and, if you have billers in-house, a software option. Then take the questions to ask before you sign into every call.

Questions people ask