The four models

Each model answers one question differently: who does the work when a claim doesn't go through on its own? Judge them on the same criteria from the evaluation framework: scope, EHR fit, exception handling, reporting, staffing, contract terms and HIPAA safeguards.

Models compared on the same criteria
Traditional full-serviceSoftware-basedAI-assisted serviceHybrid
Who does the workCompany's billersYour staffAutomation, with company billers on exceptionsSplit between you and the company
EHR fitWorks in your EHR or theirs; variesThe software is the system, or plugs into your EHRIntegrates with your EHR and clearinghouse; check yoursDepends on the hand-off point
Exception handlingA biller's queueYour staff's queueFlagged by automation, worked by a billerWhoever owns that step
Your staffing needLowHigh: you need billersLowMedium
Continuity riskTurnover at the companyTurnover on your teamTurnover at the company, reduced where rules live in the systemBoth
Typical fee basisPercentage or per claimSubscription per provider or per claimAsk: varies by companyMixed

Options by type

Where a named company fits a type well, it's listed; the rest are described by type, because the model matters more than the brand. Every option is judged on the same two lines: who it fits, and what to check.

  • Altair Health

    AI-assisted service

    An AI-assisted medical billing service with in-house billers, for independent and small-to-mid-size practices.

    Best fitIndependent and small-to-mid-size practices that want billing run as a service rather than a tool their staff operates.

    CheckWhich steps it covers and whether coding is included, your EHR and clearinghouse, how an exception reaches one of its billers, sample reports, contract exit and data export, BAA. Ask for a written quote.

  • Traditional full-service billing company

    Full-service

    Billers employed by the company work your claims end to end, usually with their own software or inside your EHR. Quality rests on the people assigned to you.

    Best fitPractices that want billing off their plate and value a named biller.

    CheckWho works your account and their workload, coverage for turnover, sample reports, fee definitions, BAA.

  • Billing software you run

    Software-based

    Practice management and billing software, often with a clearinghouse, that your own staff uses. The vendor supports the software; your team does the billing.

    Best fitPractices with experienced billers who want control and can cover absences.

    CheckWhether the scrubber's edits are kept current, clearinghouse fees, support hours, data export, what happens to denials when your biller is out.

  • Hybrid arrangement

    Hybrid

    You keep part of the cycle (often eligibility and charge entry at the front desk) and the company runs the rest.

    Best fitPractices with a strong front office but no back-office billing team.

    CheckThe exact hand-off, who owns each denial category, and how problems at your end are reported back to you.

  • Specialty-focused billing company

    Full-service, by specialty

    Any of the models above, concentrated on one specialty's codes, payers and authorization rules.

    Best fitSpecialties with unusual codes, heavy prior authorization or specialty-specific payer policies.

    CheckHow many current clients share your specialty and payer mix; ask for a reference among them.

How billing companies charge

This guide doesn't quote rates. No government agency, the AMA, KFF or a peer-reviewed study publishes what medical billing companies charge, and any figure you find elsewhere comes from vendors or market-research sellers. What you can check is how each fee structure works and what it rewards.

Common fee structures
StructureHow it worksWhat it rewardsAsk
Percentage of collectionsThe company keeps or invoices a share of what's collected.Collecting more, which aligns with you, and may reward billing more, which may not.What counts as a collection; whether it applies to old A/R and front-desk payments; where payments are deposited.
Per claimA fee for each claim submitted.Volume of claims, regardless of payment.Whether resubmissions, corrected claims and appeals count as new claims.
Flat monthly feeA set fee for a defined scope.Efficiency; there's no extra pay for extra work.What's out of scope, volume limits, and what triggers a change.
Per provider or subscriptionCommon for software: a monthly fee per provider or per location.Nothing about outcomes; you do the work.Clearinghouse and add-on fees, contract term, data export.
Add-onsSetup, credentialing, legacy A/R cleanup, statements and postage, reporting.Depends on the item.A full list with prices or 'included', before signing.

Comparing quotes

Worked examplePutting different fee structures on one line
  1. From your last 12 months, take average monthly net collections and average monthly claims (with resubmissions, if a per-claim quote counts them).
  2. Percentage quote: monthly net collections × the quoted percentage, applied only to what the contract says it applies to.
  3. Per-claim quote: monthly claims × the per-claim fee.
  4. Flat quote: the monthly fee plus add-ons you'd actually use.
  5. Add one-time costs (setup, migration) divided by the minimum term in months.

You now have one monthly cost per quote. Put it next to each company's scope and its scorecard result from the framework: a lower cost for less work isn't a saving.

Then compare against what billing costs you now: staff wages and benefits for billing time, software and clearinghouse fees, and what you lose to late or unworked denials. A peer-reviewed study at one academic health system put professional billing and insurance-related costs at 14.5% of revenue for a primary care visit and 3.1% for an inpatient surgical procedure (Tseng et al., JAMA 2018). Those are academic-system figures, not a practice benchmark, but they're a reminder that in-house billing has a cost too.

Questions people ask

What percentage do medical billing companies charge?

There's no primary source for typical rates, and this guide doesn't quote one. Rates vary with specialty, volume and scope. Get written quotes, check what the percentage applies to, and convert each to a monthly cost at your volume.

Is an AI-assisted billing service the same as billing software?

No. Software is a tool your staff runs. An AI-assisted service, such as Altair Health, is a service: its automation and its billers do the work for you.

Which type is best for a small practice?

One that doesn't depend on staff you can't keep. Small practices without dedicated billers usually look at full-service or AI-assisted services; those with experienced billers may prefer software. Score each on the same criteria.

Sources

Every figure and rule on this page links to the organization that produced it. Check the source before you rely on it: payer and federal rules change.

  1. 42 CFR 424.73: Prohibition of assignment of claims by providers (billing agent conditions, paragraph (b)(3)) · Electronic Code of Federal Regulations
  2. 42 CFR 424.80: Prohibition of reassignment of claims by suppliers · Electronic Code of Federal Regulations
  3. Medicare Claims Processing Manual, Chapter 1 (§30.2.4 Payment to Agent; §80.2 clean claims and interest) · Centers for Medicare & Medicaid Services
  4. Compliance Program Guidance for Third-Party Medical Billing Companies (63 FR 70138, December 1998) · HHS Office of Inspector General
  5. Tseng P, Kaplan RS, Richman BD, Shah MA, Schulman KA. Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System. JAMA. 2018;319(7):691–697 · JAMA (PubMed record 29466590)
  6. Altair Health · altair-health.com