Percent of collections or a fixed fee: when each is fair.

Most outsourced billing for a small practice is priced as a share of what the practice collects. Tebra's pricing guide for billing companies puts the typical quote at 4% to 10% of collections.^A The rest of the market sells the same work as a flat monthly fee, a charge per claim, or a blend of the two. Each one is fair under its own conditions, and an owner who knows the conditions can read any quote in a few minutes.

How a percentage works.

Under a percentage, the biller is paid a cut of each payment that lands. Nothing is owed on a claim that is never paid. That is the whole argument for it: the biller earns more only when the practice does, so a denied claim left in a drawer costs the biller too.

The rate itself tells you less than the definition under it. Tebra's guide also reports that about a quarter of billing companies using this model charged 6% to 7%, a narrow band inside a wide range.^A Two quotes at the same rate can still cost very different amounts, because "collections" is a word each contract defines for itself.

When a percentage is fair.

A percentage is fair when the biller works the whole claim, well past the first submission: eligibility checked before the visit, denials appealed, underpaid lines raised with the payer, and old balances chased until they close. If the contract says all of that is in scope, the incentive runs the right way.

It is less fair in three situations. The first is when the contract counts money the biller did nothing to earn, such as patient payments taken at the front desk or a large balance that was already in flight when the biller started. The second is a monthly minimum that turns a percentage into a fixed fee in a slow month without saying so. The third is a practice with a few very large claims, where the same percentage pays the biller a great deal for work that took no longer than a small claim.

Some contracts answer the last point with tiers. One dental billing firm prints 3.5% on insurance collections from $40,000 to $100,000 a month, 3% on the slice up to $150,000 and 2.5% on everything above, each rate applied only to its own slice.^B A tiered rate is worth asking for once a practice's collections grow.

When a fixed fee is fair.

A flat monthly fee prices the work, not the money. It suits a practice whose claim volume is steady from month to month and whose scope can be written down: how many providers, which payers, which tasks stay in the office. The same firm charges $1,400 a month per location for practices under $40,000 a month of insurance collections, and a second dental billing firm prints the same base with a $399 setup.^BC Below that line the fee does not move with collections. Above it, the price turns back into a percentage.

A flat fee is fair when the scope is specific and when a busy month does not quietly become an extra invoice. It is unfair when the practice is small and new. A fixed fee is owed in the month a new provider's applications are still with the payers and almost nothing is paid, and that is the month the practice can least afford it.

Per claim, and the starting rate.

The third model charges for each claim sent. Tebra's guide gives $3 to $10 a claim.^A It is the easiest price to predict. A charge per submission pays for sending a claim. It says nothing about who works the denial when that claim comes back, and a practice can end up paying twice for the same visit, once to send it and again to send it back.

Advertised starting rates need the same care. A solo-practice billing page that offers "starting at 2.99%" is naming the floor of its range.^D The quote a practice receives, set by its specialty, payers and volume, is the number to compare.

What to read in any billing quote.

Whatever the model, the cost sits in the definitions and the add-ons. Clearinghouse access and patient statements are often priced apart from the rate. The dental firm above lists its clearinghouse at $79 a month and statements at $0.90 each, so the owner can see every line.^B Where those lines are missing, ask for them.

Six questions settle most quotes. What counts as collections, and are patient payments and balances older than the contract included? Is there a monthly minimum? Are denials, appeals and underpayments in scope, or billed as extra work? Who pays the clearinghouse and the statements? What does leaving cost, and who owns the claim history when you go? And what report arrives each month, showing what was billed, paid, denied and still open?

How we set a billing price.

We run the whole revenue cycle for a practice: benefits and eligibility, authorizations, claim build and follow-up, payment posting and reconciliation, denials and appeals, underpayment detection and reporting. The price is set from the practice's own numbers, in a written agreement after the free review. It names the model, what counts toward it, what is in scope and what stays in your office. We do not print a billing percentage on this site, because a figure written before we have seen your claims would be a guess.

Enrollment is different. It is counted in applications, so its fees are printed on the pricing page.