Why Use a Medical Billing Service?


The main reason for using a medical billing service is to correctly and quickly bill the insurance companies. Medical billing forms require a large amount of information. A busy medical practice will have many claims each day and, unless there's an adequate staff dedicated to billing issues, the bills can be delayed. A good medical billing service will ensure the bills go out in a timely manner.

Follow Up

Around 85 percent to 90 percent of medical billing claims get paid within 30 to 45 days. For the rest of those claims, there might have to be re-billing or claim follow up with the insurance companies. Sometimes insurance companies will say they never received a claim. Other times, they may deny a claim for some reason.

Over time, the number of these claims can build up. An individual physician might have problems keeping up with past due bills. Hospitals sometimes also have problems keeping up with the overwhelming number of outstanding claims. Allowing medical billing companies to handle this backlog allows hospitals to concentrate their resources on more current claims, and allows physicians to focus on their patients.


Medical billing companies will track all claims they've been given by any entity. They can give an updated review of cash, outstanding claims by date, and in many cases, categorized by the types of claims that have been paid or denied.

Regulations and Codes

It's hard enough for physicians to keep up with health information, let alone medical billing information. Each year there are additions and subtractions to procedure codes. There are also regulations that change regarding which codes can be billed with each other. Keeping up with all of that is the medical billing company's duty, because that makes sure that claims will continue to be paid. They will receive updated information from Medicare, Medicaid and private insurance companies that physician's practices may not receive.


Most medical billing companies charge a percentage of the dollars that are collected. This means they don't get paid unless you get paid. Most billing services charge between 7 percent and 10 percent. There are some specialty billing services, such as Medicaid specialists or compensation specialists, who will charge per claim, and some will separate the cost of submitting inpatient claims from outpatient claims.

Unless yours is a large medical practice, or if it's a hospital client, it's typically more cost effective to pay for a billing service rather than handling the billing from within. Medical billing services handle the day-to-day accounts receivables functions for their clients. Clients can be physicians or physicians groups, hospitals or clinics. Each might have its own reason for wanting to use a medical billing company to handle its claims, but usually, a medical billing company is more cost effective than in-house billing.