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The Best Medical Billing Services of 2022

Adam Uzialko
, Staff
| Updated
Jul 07, 2022

Medical billing services offer healthcare organizations the option to outsource their revenue cycle management (RCM) processes, including medical coding and billing.
Best for New Practices
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Low cost
Intuitive software
Good customer support
Best Flexible RCM Service
Exceptional usability
High flexibility
Consultative approach
Best RCM Service for Ease of Use
Kareo - Medical Billing Services
Inexpensive service
Intuitive software
Extensive training materials
Best for Free Implementation
Low cost
Certified coders and billers
Free implementation and training
Best for Hospitals and Large Practices
AdvancedMD - Medical Billing Services
Exceptional healthcare IT suite
Extensive reporting tools
Intuitive software
Medical billing services offer healthcare organizations the option to outsource their revenue cycle management (RCM) processes, including medical coding and billing.

Medical billing services can alleviate the burden of coding claims and chasing collections. The best services offer certified medical coders and billers who can create, submit, and follow up on claims to ensure they get paid quickly and in full. Most medical billing services also offer rejection and denial management services, employing a team to revise and resubmit claims that clearinghouses and payers refuse. To help you choose the best medical billing service for your business, we examined several medical billing companies, evaluating each on price, process, software and ease of use.

Did you know?Did you know? Medical billing consists of charge entry, medical coding, claims scrubbing, submission via clearinghouse, and denial management when a clearinghouse or payer kicks back a claim.

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

Compare Our Best Picks

RCM Editor's score Use case Pricing (% of monthly collections) End-to-end RCM? Contract requirement Practice management software First-pass claims rate* Credentialing support Operating systems
DrChrono 8.62/10 Best for new practices Requires quote Yes 1 year Required 96% Full service, recredentialing Windows 7 and above; macOS 10.12 and above
CareCloud 8.8/10 Best for flexibility 3% to 7% Yes 3 years Required ~97% Full service, recredentialing Windows 7 and above; macOS 10.6 and above
Kareo 8.6/10 Best for ease of use Varies among third-party billers Works with third-party billers 30-day cancellation notice Required >95% Full service, recredentialing Windows 10
ChartLogic 8.5/10 Best free implementation 3% to 6% Yes 2 years Required >95% Full service, recredentialing Windows 8.1 and 10
AdvancedMD 8.7/10 Best for large practices 3% to 8% No medical coding 1 year Required 96% (contractually guaranteed) Full service, recredentialing Windows 10; macOS
athenahealth 8.7/10 Best for reporting 7% to 8% No medical coding 2 years Required 93% Full service, recredentialing Windows 8.1, 10; macOS; iOS
RXNT** 8.8/10 Best for medical billers Starts at $65 a month plus per-claim charge N/A 1 year N/A N/A NPIs, DEA licensure Windows; macOS
MedClarity 8.2/10 Best for dermatologists Requires quote Yes Varies Required >95% Full service, recredentialing Windows 7 or above
CureMD 8.6/10 Best for tracking KPIs Starts at 4% Yes 1 year Required 98% Applications, follow-up Windows 10
SimplePractice 8.2/10 Best for paying as you go 3% to 7% Works with third-party billers 1 to 2 years Required Varies among third-party billers Third-party billers Windows 8.1, 10; macOS 10.14 and above; iOS 13; Android 7.0
MedicsPremier 8.2/10 Best for growing practices 3% to 6% Yes Varies Required ~99% Full service, recredentialing Windows 10

*Some billing companies rely on a composite first-pass claims rate, which may slightly inflate the percentage of claims truly accepted and paid on the first pass.
**Does not offer medical billing services; instead provides software used by medical billers in practices and at RCM companies.

Our Reviews

DrChrono: Best RCM Service for New Practices

DrChrono is a low-cost medical billing service that includes highly intuitive medical practice management software.
DrChrono offers a full healthcare IT platform that is simple to use and ideal for new practices.
DrChrono's software lacks some of the more advanced features that larger practices might want.
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DrChrono's medical billing service offers a staff of billing experts, coders, and compliance officers who maintain up-to-date billing and coding certifications. The service purportedly offers a 96% clean claims rate, which is competitive with the other RCM services we reviewed. It is a low-cost service with straightforward software in both its EMR system and medical practice management software, which makes it ideal for new practices looking to get started quickly, easily and within budget.

Editor's score: 8.62/10

As a client of DrChrono, you can review billing tasks in real time through the RCM task manager, which gives you a complete view of pending tasks that are necessary to collect payment from insurance companies. The billers generally complete these tasks and collect on claims within 60 days. Denials and rejected claims will be revised and resubmitted within 48 hours. The company claims to offer a 12% increase of gross collections to clients on average, while driving a $379.90 average monthly decrease in billing costs.

DrChrono's billing service also includes access to its healthcare IT suite, a set of simple tools that give new and small medical practices everything they need to get started. However, important features such as e-prescribing and lab integrations are only available at higher pricing tiers, so the basic suite may not be suitable for every healthcare organization.

The healthcare software-as-a-service business EverCommerce recently acquired DrChrono in. The acquisition has resulted in EverCommerce integrating DrChrono into its EverHealth suite of tools. Neither company has announced whether EverCommerce’s existing medical billing service, AlertMD, will absorb DrChrono’s offerings. As of March 2022, the two companies are operating as before the acquisition. We will consider this information the next time this category is updated.

Read DrChrono Review

CareCloud: Best Flexible RCM Service

CareCloud is an extremely flexible RCM service that can be used with any EMR or practice management software, as well as to outsource part or all of your medical billing.
CareCloud takes a consultative approach to help your practice grow over time.
CareCloud has a high implementation fee of $1,000 per provider and a lengthy contract term of three years.

With CareCloud's RCM services, you can outsource all of your medical billing or just a particular segment, making CareCloud the most flexible medical billing service we reviewed. Whether you want to outsource your practice's entire medical billing department or you just need coding support, CareCloud can tailor a plan for you. Other flexible billing services might break apart coding and billing, but few allow you to request specific support for denial management, for example, without the other components. For this reason, CareCloud is our best pick for a flexible medical billing service.

Editor's score: 8.8/10

CareCloud offers a medical billing service, healthcare IT suite, and consultative approach that is extremely flexible and tailored to the needs of each client. After CareCloud was acquired by MTBC in 2020, the company revamped its software to be platform-agnostic.

CareCloud uses the same criteria as other medical billing services to determine its price (charged as a percentage of your collections): your practice's size, specialty, claims volume and complexity of billing operations. Pricing also depends on which of the three service tiers your practice selects. CareCloud's average costs range from 3% to 7% of your net collections, which is lower than the costs of many other medical billing services we reviewed.


Kareo - Medical Billing Services: Best for Ease of Use

Kareo has one of the most intuitive software platforms, enabling you to review your collection progress in real time.
Kareo can match you with the medical billing partner from its network that best suits your practice's specialty and workflow.
Kareo does not directly provide medical billing services, acting instead as your intermediary with a third-party billing partner.

Kareo is a healthcare IT company that does not offer direct billing services, but instead maintains a network of third-party billing partners that it can match with clients based on their specialties and needs. While this gives you more options, it also means that multiple parties will be involved in your practice's billing cycle. This model is unique among the medical billing services we reviewed and could further complicate the already-complex medical billing and coding process.

Editor's score: 8.6/10

However, Kareo offers a highly intuitive healthcare IT platform, which includes its EMR system and medical practice management software. You can use the latter to monitor your medical billing partners' activities in real time, so direct communication with billers remains possible despite Kareo's unique model.

Kareo Patient Collect, the company’s own payment collections solution, gives providers several patient payment options. The service sends billing statements and reminders via email, text message and paper copies. Kareo Patient Collect can also store credit card information and create billing statements that are easy to read and understand.

When you sign up for Kareo, you participate in the discovery process for Kareo to determine your needs. When it understands the services you need, Kareo will match your practice with two medical billing companies it believes are good fits. On the upside, this means you can determine which of these two companies is the best fit for your practice and ensures that your medical billing service will be experienced with your practice's specialty and circumstances. On the downside, it means you have to trust both Kareo and a third-party company for a successful working relationship; practices that work with a single company may find it easier to manage the billing partnership.

Kareo recently merged with the patient acquisition platform PatientPop. As a result, signing up for Kareo’s medical billing services – and thus its EMR – also now gives you access to top-notch healthcare marketing tools.

Kareo Patient Collect, the company’s own payment collections solution, gives providers several payment options to offer patients. The service sends billing statements and reminders in the form of emails, text messages, and printed copies. Kareo Patient Collect can also store credit card information and create billing statements that are easy to read and understand.

Read Kareo - Medical Billing Services Review

ChartLogic: Best RCM Service for Free Implementation

ChartLogic is a low-cost solution, with typical prices ranging from 3% to 6% of your monthly collections.
ChartLogic's staff of medical coders and billers are all certified through a reputable medical billing and coding association.
ChartLogic's RCM clients are required to be on both the vendor's EMR and practice management software except in some special circumstances.

ChartLogic is a low-cost medical billing service that maintains a fully certified staff of medical coders and billers. The company assigns a dedicated account manager to onboard clients, who must also use the company's healthcare IT platform, including the EMR system, practice management software, and patient portal solution. ChartLogic conducts a series of pre- and post-implementation check-ins, so your dedicated account manager can address any issues directly. It provides this service at no extra cost to you beyond the 3% to 6% of monthly collections that ChartLogic charges all clients; this rate is competitive with other medical billing services we reviewed, including ones that do charge extra for implementation.

Editor's score: 8.5/10

In addition to managing billing processes, ChartLogic includes several features that can enhance your organization’s performance. Its appointment scheduler simplifies creating and editing appointments. It can check multiple doctors’ schedules and return feasible dates and times for requested appointments. ChartLogic also comes with automation tools for processing collections, generating reports and registering patients to help you further streamline your workflow.

ChartLogic's coders and billers are not only all certified, but also experienced in various specialties. Team members are assigned to you based on your practice's specialty and the complexity of your billing processes. Similarly, ChartLogic pairs coders and billers with your practice based on their understanding of your geographic region and local insurance company policies.


AdvancedMD - Medical Billing Services: Best RCM Service for Hospitals and Large Practices

AdvancedMD's powerful, user-friendly healthcare IT suite is included in the cost of the RCM.
Its extensive reporting tools make tracking financial performance and biller activity as easy as logging in to your practice management software.
AdvancedMD does not perform coding services, meaning your practice is responsible for properly coding claims in-house.

AdvancedMD offers a medical billing service that includes access to its powerful EMR system and practice management software. AdvancedMD is a competitively priced service that has the flexibility and expertise to serve practices of varying sizes across a wide range of specialties. For these reasons, AdvancedMD is our best pick for large practices, which likely have the resources to overcome the company's lack of coding services.

Editor's score: 8.7/10

AdvancedMD relies on the same rules engine as its preferred clearinghouse partner, Optum. This means claims scrubbing is virtually guaranteed to catch any coding or billing errors that would lead to a clearinghouse rejection. When payers deny a claim, AdvancedMD billers work to revise and resubmit the claim within 72 hours, an especially important turnaround time for large practices submitting a significant volume of claims every day.

Unfortunately, AdvancedMD's medical billing service does not include coding. This means your practice is responsible for coding claims internally, which requires an in-house medical coder. However, the billing services that AdvancedMD does offer are exceptional, generating a companywide first-pass claims rate guaranteed to exceed 95%. Many billing services promise numbers like this, but AdvancedMD will guarantee it in a written agreement.

Like most medical billing services, AdvancedMD charges a percentage of your monthly collections. Its typical pricing ranges from 3% to 8%, depending on practice size, specialty, billing process complexity and several other factors. While this range is indicative of the company's typical clients, there are outliers that are charged as little as 2% of monthly collections or as much as 9%. The typical contract term for AdvancedMD's RCM service is one year, which is shorter than many other medical billing services in our review require.

Read AdvancedMD - Medical Billing Services Review

athenaCollector: Best RCM Service for Reporting

Athenahealth offers one of the best reporting modules, which analyzes its network of healthcare providers.
It takes a consultative approach to medical billing, offering advice and tips for practices to improve their collections.
Athenahealth's pricing is on the high end of the standard industry range – typically about 7% or 8%, according to a company representative.

Athenahealth's RCM service includes access to its full suite of healthcare IT products, including its electronic medical records (EMR) system, athenaClinicals, and its medical practice management software, athenaCollector. What separates athenahealth from many other medical billing providers is its robust reporting module. This module allows you not only to review your claims and collections data, but also to benchmark your performance against similar practices in athenahealth's network. Through these benchmarks, you can see how to improve your practice's performance, with guidance from the athenahealth team based on high-performing network members' operations.

Editor's score: 8.7/10

Athenahealth's most basic functions are easy enough for a new user to figure out in a short time, but more advanced functionality will likely require additional training. It offers role-based training, which helps ensure your staff is familiar with the tools they will use on a daily basis. For self-starters, athenahealth also maintains a library of resources, including user guides and how-to videos.

AthenaCollector clients must also utilize athenahealth's practice management software, of the same name. You can review the activity of athenahealth's medical billers in real time, as if they were any other user on the system. Additionally, you can collect patients' out-of-pocket payments with the practice management software, helping your front-office staff streamline visits and accept patient payments the same day service is rendered.

Read athenaCollector Review

CureMD: Best RCM Service for Tracking KPIs

CureMD offers a KPI dashboard that lets you track your practice's performance with easily digestible graphs and charts.
CureMD supports 32 specialties, offering a breadth of experience to suit many types of healthcare organizations.
Customer reviews frequently cite implementation challenges with CureMD's healthcare IT platform – including its medical practice management software, which it requires its medical billing clients to use.

CureMD offers one of the most intuitive, flexible dashboards for setting and tracking your practice's key performance indicators. Regardless of your practice's specialty or size, you can adjust its KPIs and targets, then track their progress as CureMD performs charge entry, coding, claim submission, and denial management.

Editor's score: 8.6/10

CureMD is a low-cost medical billing service starting at a price of 4% of your monthly collections, which is more cost-effective than many of the medical billing services we reviewed, some of whose rates range from 5% to 10% of monthly collections. CureMD also supports 32 specialties, making it a good fit for a wide range of medical practices with differing needs. Certain specialties have unique needs, such as specific ICD-10 codes or payer rules.

In addition to the actual coding and billing, CureMD offers fee schedule review, insurance eligibility verification, credentialing, and denial management services. The company touts a 96% first-pass claims rate, meaning 96 out of 100 claims it submits are accepted by the clearinghouse and payers without delay or revision. The company will also manage the collection of patients' copays and other out-of-pocket charges.

CureMD's cloud-based software platform doesn't require user installation; CureMD manages the implementation process and provides training. However, some customers have complained that this process is arduous and leaves a lot to be desired in getting staff up to speed on the system. Because CureMD's medical practice management software is required for the medical billing service, billing clients must go through this implementation process to configure the system. A rocky implementation can disrupt operations and negatively impact collections.

To help practices respond to the COVID-19 pandemic and emerging variants, CureMD has launched a rapid testing platform. This software includes tools for submitting claims at the time of testing and alerting patients to appointment reminders and test results. Each patient also gets a “digital health card” that lets them access their testing and results history.

CureMD's software is lightweight, lacking the bells and whistles of more advanced healthcare IT platforms. But for practices that want a simple, intuitive solution with a modern aesthetic and seamless user experience, CureMD is a great choice.


MedClarity: Best RCM Service for Dermatologists

MedClarity offers a specialized medical billing service for dermatology practices, and it can support other specialties as well.
MedClarity offers medical coding and medical billing services separately or combined.
MedClarity requires a custom price quote depending on your practice's specialty, volume of claims, and scope of required services.

MedClarity offers an RCM service and healthcare IT platform that includes features specific to dermatologists. Dermatologists, like other specialists, have unique billing considerations, such as obscure ICD-10 codes or payer rules and expectations. Working with a billing company that has experience conducting coding and billing for dermatologists reduces their chances of rejections or denials and opens the door for a more collaborative, consultative relationship. MedClarity also offers a dermatologist-specific EMR, which you can choose to use as part of your RCM services.

Editor's score: 8.2/10

MedClarity isn't limited to dermatologists, though. The company works with a wide variety of healthcare organizations, from gastrointestinal specialists to general practitioners. The company offers both medical coding and medical billing services, allowing you to outsource your entire RCM process or just part of it. If your practice has in-house billers or coders, you can keep them on staff and supplement your workforce with MedClarity's team.

MedClarity does not offer transparent pricing, however. It requires you to get a quote from a sales representative, based on the scope of services you need, your practice's specialty, and your volume of claims. Like the other medical billing services we reviewed, MedClarity charges a percentage of your total monthly collections, so it earns more when you collect more payments. This pricing model is standard in the medical billing industry.


MedicsPremier: Best RCM Service for Growing Practices

MedicsPremier is a healthcare IT company that offers low-cost RCM services ranging from 3% to 6% of your monthly collections.
MedicsPremier submits test claims on behalf of clients, covering 50 to 100 patients over the first week of service.
MedicsPremier's software has a somewhat cluttered and dated user interface that can be difficult for new users to navigate, so extensive training is a must to make effective use of the system.

MedicsPremier, a software platform and medical billing service from Advanced Data Systems Corporation (ADSC), is an effective choice for growing practices looking for a competitively priced solution. For one thing, MedicsPremier begins your service with a test run on 50 to 100 patients, ensuring all key elements of your billing operations (such as insurance eligibility verification and patient statements) are running smoothly. This is key for scaling operations, helping you guarantee your systems won't break when your claim volume increases.

Editor's score: 8.2/10

MedicsPremier's pricing is on par with other billing services we reviewed. Ranging from 3% to 6% of your monthly collections, based on the specialty and claims volume of your practice, MedicsPremier beats the industry-standard pricing we discovered in our research.

MedicsPremier maintains a proprietary rules engine, which it says can boost a practice's first-pass claims rate to over 99%. The company also performs insurance eligibility verification, an essential feature of medical billing services, which guarantees that your patients have up-to-date insurance policies that cover the services they need. In the event of rejections or denials, MedicsPremier will handle the denial management process, focusing on fast turnaround of resubmitted claims.

The company helps providers get credentialed with insurance companies and clearinghouses, as well as posting EOBs and ERAs. MedicsPremier also offers insurance discovery for patients who don't have coverage, finding any available options – a service that not many medical billing companies offer.


SimplePractice: Best Pay-as-You-Go RCM Service

SimplePractice offers a cloud-based software platform as well as third-party RCM services.
SimplePractice provides a low-cost, pay-as-you-go service through third-party billers.
SimplePractice does not directly offer medical billing services; it relies on third-party billing companies, meaning clients have to deal with multiple RCM relationships instead of just one.

SimplePractice is a cloud-based healthcare IT company that offers medical practice management software and an EMR system, which can be combined with billing services through a third-party RCM company. SimplePractice does not directly provide RCM outsourcing services, so clients have to trust the third-party company as well.

Editor's score: 8.2/10

SimplePractice's software starts at just $39 per month per provider, an exceedingly low cost compared to other healthcare IT companies and medical billing services we reviewed. You simply use the medical practice management software to schedule appointments and confirm patients' insurance eligibility, and the third-party medical billers do the rest. Our research indicates that the typical costs range from 2.5% to 7% of your monthly collections, depending on your practice's specialty, claims volume, and scope of required services. The low end of this range is extremely cost-effective compared to other billing services we reviewed, and the high end is industry standard. This makes SimplePractice's medical billing service ideal for small or new practices on a budget.

There are no startup fees for SimplePractice's medical billing services. Most of the interaction with the third-party company occurs seamlessly through SimplePractice's software as well, so the drawback of dealing with multiple companies should be manageable for most practices. The company also doesn't require long-term contracts; all services can be cancelled with a simple 30 days' notice.


RxNT: Best RCM Service for Medical Billers

RXNT is unique among our best picks because it specializes in providing software for medical billers, rather than providing billing services directly to healthcare organizations.
RXNT has an integrated clearinghouse, which streamlines the claims process
RXNT is not right for practices looking to outsource their medical billing. It does not perform coding and billing on clients' behalf; it's a software provider.

RXNT is a software company that offers a full healthcare IT suite, which includes medical billing software. The software supports the creation and submission of claims, offering medical coders and billers an integrated clearinghouse. Unlike the other medical billing services we reviewed, RXNT focuses on providing billers the software they need, rather than outsourcing practices' billing operations. The software is effective because of its seamless integration with the clearinghouse and intuitive, biller-focused user interface. For these reasons, it is our best pick for medical billers.

Editor's score: 8.8/10

RXNT includes claim-scrubbing tools, which puts each coded claim through a rules engine prior to submission through the clearinghouse. The rules engine flags any known errors that might lead to claim rejections or denials, allowing billers to revise claims before submitting them. This improves the first-pass claims rate (also known as a "clean claims rate").

Denials and rejections that do occur can also be managed within RXNT's software. Billers can review feedback from payers as to why claims were rejected, then rework them accordingly. For billing companies managing multiple clients, RXNT's denial management tools allow easy organization and prioritization of client claims.

In addition, RXNT offers an EMR system and medical practice management software, which can be implemented as stand-alone modules or as part of an integrated healthcare IT system.

RXNT recently updated its mobile app to more closely resemble its cloud-based desktop software. Many of these updates concern RXNT’s EMR and PMS, but some pertain to the medical billing software. Now, with the RXNT app, you can directly access your state’s prescription monitoring program. You’ll also enjoy a streamlined sign-in interface and quick links to a patient’s medication history, forms, encounters and charts.

Read RxNT Review

Costs of Medical Billing Services

Pricing models are largely the same from company to company in the medical billing industry. Most companies in our review charge a percentage of your net monthly collections, meaning the more revenue they generate for you, the more they get paid. Those percentages typically fall between 3% and 9%, although there are outliers on both the low and high ends.

Some companies charge additional fees, such as setup, implementation, or clearinghouse fees. These fees can vary greatly by company, so it's important to ask sales representatives about their companies' policies.

Occasionally, medical billing services will institute a monthly minimum in case the practice's revenue for the month isn't high enough to be profitable for the billing company. Other services charge a monthly per-provider base price, taking a small percentage of collections on top of that, but this model is rare.

TipTip: Look for a medical billing service that doesn't charge implementation fees or add-on costs for its healthcare IT features. For some practices, hiring a medical billing service is a great way to gain access to a healthcare IT suite, which is virtually a requirement for a modern healthcare practice.

Buying Guide

What Are Medical Billing Services?

Medical billing services allow practices to outsource their medical coding and billing processes. Also known as revenue cycle management (RCM) services, medical billing companies remove the burden of coding claims, submitting them to payers, following up on unpaid claims and managing denied claims.

Outsourcing your RCM puts a dedicated team in charge of generating your claims, scrubbing them for errors, and chasing denials or underpayments, which reduces or eliminates the workload associated with in-house billing. Best of all, most services operate directly within your clinic's existing practice management software, allowing your staff to monitor the progress of your submitted claims.

While medical billing services offer significant benefits, it's important to choose the right one for your practice. The wrong partner could tie up your practice's money and possibly allow patients' payments to fall through the cracks. To ensure smooth cash flow, medical billing departments need to capture charges and create claims for them quickly, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges come in, the billers must keep tabs on previously submitted claims in case they are rejected or denied by payers. If they are, the billers must revise and resubmit those claims – without falling behind on the new claims. Medical billers are also responsible for sending statements to patients for copayments or out-of-pocket expenses and following up on unpaid patient accounts.

The challenges of medical revenue cycle management require billing departments to be nimble and adaptable. They must stay abreast of updates, such as changing regulations and shifts in payers' policies. No matter which way you slice it, in-house medical billing demands a lot of time, energy, and money. That's why many medical practices outsource the process to third-party medical billing companies, sometimes called RCM services.

The Benefits of Medical Billing Services

Medical billing services help medical practices in various ways. These are the major benefits of medical billing services:

  • Streamlined back-office processes: Outsourcing to a medical billing service reduces the staff and resources your practice must expend on back-office processes like billing and coding. Because these services minimize the administrative burden on your staff, they have been known to reduce burnout in the healthcare field.

  • Payment tied to success: A medical billing service's payment is connected to the success of your practice, since it generally costs a percentage of your monthly collections to outsource to an RCM service. The more money a medical billing service successfully collects on behalf of your practice, the more it gets paid, so it is invested in helping you succeed.

  • Faster reimbursements: Medical billing services are experts in coding and billing, so they can typically navigate the process much more easily than a single practice can. This is especially true if the RCM service has an existing relationship with clearinghouses and payers. This means less waiting around for payment on the services you've already rendered.

  • Lower denial and rejection rates: With its knowledge of payers' expectations and advanced claim-scrubbing software, a good medical billing service should immediately reduce the rate of your claims' denial or rejection by payers. Look for a first-pass claims rate above 95% to be sure you're partnering with an effective RCM service.

  • Patient statements and follow-up: Medical billing services don't just deal with insurance companies; they also manage your patients' statements. Whenever a patient owes money out of pocket and hasn't paid in your office, your medical billing service will send them a statement explaining their bill. If the bill goes unpaid, the billing service will follow up with the patient. In extreme cases, a medical billing service may even refer unpaid accounts to a collections agency.

  • Detailed financial reporting: Many medical billing services capture all the data related to your claims and couch it in easy-to-filter reports. The level of reporting and the usefulness of the visualizations varies by company, but this full accounting of your practice's finances can be extremely helpful.

  • HIPAA compliance: By law, medical billing services must comply with the Health Insurance Portability and Accountability Act. Any sensitive patient data required for coding claims and billing must be secure at all times, both at rest and in transit. Many medical billing services work directly within your practice's healthcare IT platform, leveraging the same security measures you trust on a daily basis.

While outsourcing isn't right for everyone, it can help medical practices that are having trouble operating the back office smoothly. Best of all, a good medical billing service can improve your overall cash flow.

Bottom LineBottom Line: Outsourcing your medical billing operations could reduce the burden on your team and free up resources for you to direct elsewhere. When choosing a billing service, you should request a breakdown of its RCM process in writing to confirm that it handles every aspect of billing that you need.

Outsourced Revenue Cycle Management vs. In-House Billing

Whether you should contract with a medical billing service or keep your billing in-house depends on how large your practice is, how much revenue you take in, and how you utilize your staff. To do billing in-house, you will need a certified medical coder on staff. You will also need to keep up with ever-changing medical laws and codes. So many things can go wrong with medical claims, such as simple coding errors, that will make insurance companies reject them. If you manage your billing in-house, it will be up to you and your staff to deal with rejected claims. Billing services take care of all of that for you, including staying on top of laws, codes, and policies.

Cost can ultimately determine the smartest choice for your practice. In-house billing requires payroll for a medical coder and usually an annual license for medical billing software. Someone with this certification will cost more to employ than an average clinical staff member, and taking care of claims will likely be their full-time responsibility. Billing services typically charge a percentage of net collections, often 4% to 9%. This should give you a general idea of what makes financial sense for your practice as you consider a medical coder's salary versus the speculative cost of a service's percentage. However, there are other costs to your practice to consider for each route.

Outsourced billing can be a good solution for small practices that need their staff to focus on other aspects of running the office. Having one person on payroll as a medical coder may not make sense with the number of patients the practice serves. For larger practices and hospitals, a billing service may not be worthwhile if you have the budget for medical coders, a large volume of claims, and the resources to handle them internally.

TipTip: If your in-house medical coding and billing is inefficient or can't keep up with your claims volume, hiring a medical billing service to support even just a portion of your billing needs could be the answer. You don't necessarily have to outsource 100% of your billing operations.

How Does Medical Billing and Coding Help Increase Cash Flow?

A dedicated medical billing and coding department can improve your practice's cash flow by reducing the time a claim spends in accounts receivable, a metric referred to as "days in A/R."

First-Pass Claims Rate

Many RCM services focus on reducing days in A/R by coding clean claims and scrubbing them for errors with the same or similar rules that clearinghouses use. This improves the chances that a claim will move through the clearinghouse to the payer and be reimbursed on the first pass. The rate at which claims are approved and paid after the first submission is known as a medical billing service's first-pass claims rate, or clean claims rate. This is a critical element of choosing a service: The higher a company's first-pass claims rate, the better.

However, not all services track clean claims rates in the same way. Some companies only tally a "clean claim" if it was accepted and paid. Others factor in unpaid claims that were not denied, inflating their first-pass claims rate. Ask a company for clarification on how it tracks its clean claims rate before basing your decision on that rate.

Faster Payments With Denial Management and Follow-Up

Medical billing services can also expedite the revision of rejected or denied claims. When a payer rejects a claim, it is usually due to a clerical error. Once edited, the claim can be resubmitted for payment. Good medical billing services keep close tabs on rejections and denials, acting swiftly to revise any errors and ensure timely payment.

Sometimes claims sit with a payer for a while without any response. In these cases, medical billing services follow up (sometimes rather aggressively) to get the payer to respond. This often results in faster approval and reimbursement. In other cases, it results in a denial or rejection; however, that also gives the billing service the opportunity to revise and resubmit the claim.

Each of these elements of an RCM service contribute to downward pressure on the days in A/R, which means you get paid sooner for the services your practice has rendered, keeping your cash flow regular and healthy.

Medical Billing Services FAQs

The answers to these frequently asked questions can shed additional light on the medical billing services space.


The medical billing process is complex and involves several third parties. However, it breaks down to these general components:

  1. The medical biller generates and codes claims based on clinical data.
  2. The claims are scrubbed (manually or using an automated system) and edited if any errors are found.
  3. Claims are transmitted through clearinghouses to the appropriate payers (insurance companies, Medicare, and Medicaid).
  4. When payment is received, the billing service posts it to the practice's account, minus the service's percentage fee.
  5. If a claim languishes unpaid, the medical billing service follows up with payers.
  6. If a claim is denied, the medical billing service revises and resubmits the claim, tracking it until it is paid.
  7. All financial data is stored for reporting, sometimes directly within the client's practice management system.

The process also includes tracking patient balances owed and following up on unpaid accounts. In some cases, the medical billing service will refer the balance to collections.


Medical billing services should be secure and HIPAA compliant. They should also employ certified medical coders and billers, preferably with years of experience in the industry. Some medical billing services also offer access to their electronic medical records (EMR) systems and practice management software as part of the percentage costs. If you need those platforms, bundling them with a medical billing service could be the way to go.

Before signing up with a medical billing service, ask for a sample contract or operating agreement in writing that spells out the percentage of collections you will be charged and the responsibilities of both the billing service and your own practice. You should also seek out practices similar to your own and request recommendations of medical billing services they've successfully used.


Outsourced revenue cycle management is right for some medical practices but not for others. If you find that your claims are going unpaid or you are receiving a high rate of rejections, you should consider partnering with an experienced medical billing service. Additionally, if the cost of a medical billing service is lower than that of maintaining full-time coders and billers on your staff, outsourcing is likely the right choice.

What to Expect in 2022

Since 2014, 90% of solo practitioners and small medical practices say they plan to outsource their medical billing as a way to reduce their overhead and eliminate labor-intensive, in-house billing operations. It should come as no surprise that the medical billing service industry is projected to reach a market value of $16.9 billion by 2024. In 2022, more medical practices are expected to outsource their medical billing to third-party services.

As technology improves, so do medical billing services' offerings. Automation has been a key driver of growth in recent years, streamlining not only in-house medical billing operations but also the way practices work with third-party RCM providers.

As cloud-based medical billing software and electronic claims processing become more common – especially with more effective integrations for EMR systems and practice management software – automation offers new opportunities for medical billers to quickly and easily scrub claims and submit them through clearinghouses to payers.

From the moment a patient's insurance eligibility is verified to when payments are remitted, software is an essential element of the modern medical billing process. As healthcare IT products integrate machine learning algorithms, expect new opportunities for automation and increased accuracy in medical billing.

Modern medical billing software and services also allow healthcare organizations to personalize the patient experience in how they deliver statements and capture payments. Many services have begun implementing payment plans and other useful features to improve the patient experience. Expect more RCM providers to follow suit and double down on the trend of personalizing billing on a patient-by-patient basis.

Adam Uzialko Staff
Adam Uzialko is a writer and editor at and Business News Daily. He has 7 years of professional experience with a focus on small businesses and startups. He has covered topics including digital marketing, SEO, business communications, and public policy. He has also written about emerging technologies and their intersection with business, including artificial intelligence, the Internet of Things, and blockchain.
Image Credit: Lisa S. / Shutterstock
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