How much does outsourcing medical billing cost: per claim, percentage, or per seat?
It depends on the model. Percentage vendors typically take a share of what they collect; published industry surveys put that share in the mid single digits to low double digits. Seat-based vendors, including us, charge one flat rate per person per month regardless of collections, with no per-claim fee at all.
The detail
Three pricing models dominate the market. A percentage-of-collections vendor is paid a share of what it collects, so the invoice moves with revenue and the vendor's incentive sits on every account, not just the easy ones. A per-claim vendor charges a flat fee for every claim submitted, win or lose. A seat-based vendor, the model Soft Home Global uses, charges one flat rate per dedicated person per month, with no fee tied to volume or outcome.
Published figures on the percentage model vary by vendor and by claim volume; a billing-company pricing survey found roughly a quarter of billing companies using that model charged in the six to seven percent range in the year surveyed. That is useful context for reading a quote, not a number this company charges. See /pricing/ for what each seat here costs, published rather than quoted on a call.
A seat price does not include everything in every model. Software, clearinghouse fees and your own practice-management license are separate costs under every pricing model, including ours; what changes between models is who keeps the benefit when collections rise.
Is outsourcing medical billing worth it for a small practice?
It depends on what staff time is currently costing you, measured against what a practice loses to denials and uncollected AR. For a small practice already struggling to keep up with claims, a dedicated outsourced seat is usually worth it once the admin burden exceeds a few hours a day; for a practice collecting cleanly in-house, it may not be.
The detail
There is no single answer, so measure rather than guess. Add up the hours your own staff spends on claims, denials and AR calls each week, and weigh that against the industry's own numbers on what a denial costs to fight: a national provider survey put the administrative cost of fighting one denied claim at roughly fifty-seven dollars in 2023, up from under forty-four dollars the year before.
Hospitals alone spent close to eighteen billion dollars in a single year overturning denials, according to the American Hospital Association, a scale that only exists because denial rework is genuinely expensive everywhere, not only at a small practice. If your front desk is already doing that work badly or not at all, a dedicated seat usually pays for itself quickly; if a practice is already collecting well with in-house staff, outsourcing buys capacity rather than fixing a problem.
The honest test is a free AR audit rather than a sales pitch; see /free-ar-audit/, because the number that matters is your own aged AR and denial rate, not a figure borrowed from elsewhere.
Is a percentage-of-collections contract actually cheaper than a flat fee?
No, not usually, once collections grow. A percentage rises every time revenue rises, with no ceiling, while a flat seat price stays the same whether a practice collects more or less in a given month. A percentage can look cheaper on a slow month and becomes the more expensive model as soon as billing is healthy.
The detail
Run the arithmetic on your own numbers rather than taking either side's word for it. A percentage fee scales with collections with no cap, so the better your billing performs, the more the vendor is paid for the same work. A flat seat price is fixed: the vendor is paid the same whether this month's collections were strong or weak, which also means the vendor has no financial incentive to leave a difficult account unworked.
There is a real tradeoff, not only a price one: a percentage vendor's incentive is aligned with total collections, while a flat-seat vendor's incentive is aligned with throughput on the queue it is given. Neither model is dishonest on its own; which one is cheaper depends entirely on your own collection volume. See /pricing/ for the published seat rate and run it against your own monthly collections.
What do medical billing companies charge, and how do they charge for it?
Most charge in one of three ways: a percentage of what they collect, a flat fee per claim submitted, or a flat monthly rate per dedicated staff member. Some blend a lower percentage with a per-claim minimum. Ask which model a vendor uses before asking the number, because the model changes what you are actually buying.
The detail
Percentage-of-collections is a common model among traditional billing companies: the vendor takes a share of what it actually collects on your behalf, so its incentive is tied to total revenue rather than to any single claim. Per-claim pricing charges a flat amount for every claim submitted, whether it is paid, denied or never resubmitted, which is cheap to quote and easy for a vendor to profit from volume rather than resolution.
A seat-based model, which is what we sell, charges a flat monthly rate for a dedicated person working a set number of hours, with no fee tied to claim count or collections at all. None of the three is inherently dishonest; the questions worth asking are what happens to an aged, difficult account under each model, and whether the price is published or only given after a call.
Why do offshore medical billing rates vary so much between vendors?
Mostly because of what is actually included. Published offshore rates for a full-time billing or admin seat vary widely by seniority, by whether training and a signed BAA are included, and which country the staff sit in. A lower headline rate is often a part-time hour count or a junior tier rather than a cheaper version of the same job.
The detail
Compare published vendor pages rather than a single quoted number and the spread becomes explainable. Some offshore vendors publish a monthly rate for a part-time arrangement well under a full working month; others publish a full-time monthly rate that assumes forty hours a week. A rate that looks a third cheaper is sometimes simply covering fewer hours.
Seniority and included services move the number too. A junior tier, a senior tier and a full-cycle tier are commonly priced differently on the same vendor's own page, and what is bundled, such as HIPAA training, EHR onboarding or a signed BAA before access, varies by vendor and is not always stated. See /compare/ for named vendors' own published numbers, quoted and dated, rather than an average nobody can verify.
What does a medical billing company's price actually include?
It varies by vendor, so ask directly rather than assume. A published seat price should state hours worked per week, whether training and onboarding are billed separately, whether a signed business associate agreement is included before access, and what happens if the person assigned to your account leaves. Many vendor pages leave at least one of those unstated.
The detail
A price is not comparable until you know what it buys. Hours per week matters because a full-time rate sometimes means something less than forty hours. Onboarding matters because some vendors bill a setup fee on top of the monthly rate and some do not. A signed business associate agreement matters because HIPAA requires one before anyone touches patient data, and a vendor who will start work before it is signed has told you what its compliance is worth.
What happens when the assigned person leaves, replaced the same day, replaced in a week, or not addressed on the page at all, is the detail most vendor pages leave out, and the one worth asking about directly before signing. See /questions-to-ask/ for the full list to run through on a call, including the ones where our own honest answer counts against us.
