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The most important questions to ask before hiring a billing company cover specialty experience, performance metrics, technology and HIPAA safeguards, pricing and contract terms, and compliance controls. A strong partner can show a net collection rate above 95%, a first-pass acceptance rate above 95%, Days in AR under 40, and a denial rate under 5%, backed by references from organizations like yours. Firms that can’t produce these numbers, or won’t commit to them in a service level agreement, bring a real risk of payment delays and compliance exposure.
Key Takeaways
- Questions to ask before hiring a billing company should cover experience, technology, service delivery, pricing, operations, performance, and compliance.
- Strong billing partners report net collection rates above 95%, Days in AR below 40, denial rates below 5%, and first-pass acceptance above 95%.
- Percentage-of-collections pricing typically runs 4% to 8% and ties the billing company’s earnings to your collections.
- Reasonable contracts carry 6 to 12 month initial terms with 60 to 90 day termination notice and clear data transition terms.
- Dedicated old AR recovery programs can recover 30% to 40% of balances that internal staff have abandoned.
- Red flags include reluctance to share references, pressure to sign quickly, and refusal to offer performance guarantees.
Making the Right Choice for Your Practice’s Financial Future
Selecting a medical billing firm represents one of the most critical business decisions for healthcare providers. The right partner can increase revenue by 20-30%, reduce administrative burden, and improve cash flow predictability. However, hiring a billing company incorrectly can lead to payment delays, compliance issues, and damaged payer relationships.
Before signing any contract with a medical billing firm, healthcare providers must conduct thorough due diligence. Asking the right questions during the evaluation process reveals whether a potential billing partner possesses the expertise, technology, and commitment necessary to optimize your practice revenue cycle.
This comprehensive guide outlines the essential questions every physician, practice manager, and healthcare administrator should ask before hiring a billing company.
Experience and Industry Expertise Questions
How Long Have You Been Providing Medical Billing Services?
Experience matters significantly in medical billing. Companies with 25+ years in the industry, like Medical Billers and Coders, have navigated multiple regulatory changes, coding updates, and payer policy shifts. This institutional knowledge translates into fewer claim denials and faster payment cycles.
Established billing companies have refined their processes through thousands of client relationships and millions of claims processed. They’ve encountered virtually every billing scenario and developed proven solutions for complex situations.
What Specialties Do You Have Experience Billing For?
Medical billing requirements vary dramatically across specialties. A company that excels at family practice billing may struggle with orthopedic surgery or cardiology claims. Your potential billing partner should demonstrate specific expertise in your medical specialty.
Ask for client references from practices similar to yours in terms of specialty, size, and patient volume. This verification ensures the billing company understands the unique coding requirements, authorization processes, and payer behaviors relevant to your practice.
Can You Provide Case Studies or References?
Reputable medical billing firms readily provide case studies demonstrating measurable results. Look for documented evidence of AR reduction, denial rate improvement, and revenue increases from practices similar to yours.
Request contact information for at least three current clients who can speak candidly about their experience. Ask these references about communication quality, problem resolution, and whether the billing company delivered on promised results.
Technology and Integration Questions
What Practice Management Systems Do You Work With?
System compatibility determines how smoothly your billing operations will transition. Medical Billers and Coders operates as a system-agnostic partner, meaning practices can maintain their existing EMR software without costly migrations or disruptions.
However, verify that your potential billing partner has successfully integrated with your specific practice management system. Ask about the integration process timeline, data migration protocols, and whether any functionality limitations exist.
How Do You Ensure Data Security and HIPAA Compliance?
Protected health information security cannot be compromised. Your billing partner must maintain robust cybersecurity measures and demonstrate full HIPAA compliance. Request documentation of their security protocols, including encryption standards, access controls, and regular security audits.
Ask about their business associate agreement terms, breach notification procedures, and whether they carry cyber liability insurance. These protections safeguard your practice against data breaches and regulatory penalties.
What Reporting and Analytics Tools Do You Provide?
Transparency through detailed reporting distinguishes exceptional billing companies from mediocre ones. Your billing partner should provide real-time access to key performance indicators including:
- Collections by payer, provider, and service type
- Aging accounts receivable reports
- Denial trending and root cause analysis
- Charge capture metrics
- Net collection rates
These analytics enable informed decision-making and reveal opportunities for continuous revenue cycle improvement.
Service Delivery and Communication Questions
Will I Have a Dedicated Account Manager?
The dedicated account manager model ensures consistent communication and personalized service. Your account manager should become intimately familiar with your practice operations, payer mix, and financial goals.
Ask how often you’ll communicate with your account manager, what issues they can resolve independently, and how escalations are handled. This relationship quality significantly impacts your satisfaction and results.
What Is Your Average First-Pass Claim Acceptance Rate?
First-pass acceptance rates measure billing accuracy. The industry average hovers around 75-80%, but top-performing medical billing firms consistently achieve rates exceeding 95%.
High first-pass acceptance rates mean faster payments, reduced rework, and lower administrative costs. Request specific data about their acceptance rates for your specialty and major payers.
How Do You Handle Denied Claims?
Effective denial management transforms rejected claims from lost revenue into recovered income. Your billing partner should maintain a systematic denial management process including:
- Real-time denial identification and categorization
- Rapid appeals submission within payer deadlines
- Root cause analysis to prevent recurring denials
- Regular reporting on denial trends and recovery rates
Ask about their average denial rate, appeal success rate, and turnaround time for denied claim resubmission.
What Is Your Approach to Old AR Recovery?
Many practices carry substantial aged accounts receivable that internal staff have abandoned. Specialized AR recovery services can recover 30-40% of these supposedly uncollectable balances.
Inquire whether the billing company offers dedicated old AR recovery programs, what methodologies they employ, and whether they can provide recovery rate statistics from similar practices.
Pricing and Contract Questions
What Is Your Fee Structure?
Medical billing companies typically charge using one of three models:
- Percentage of Collections: Most common, ranging from 4-8% of collected revenue. This model aligns the billing company’s incentives with your financial success.
- Flat Fee: Monthly fixed rate regardless of collections. This provides budget predictability but may not incentivize maximum revenue recovery.
- Hourly Rate: Less common, typically used for consulting or temporary support rather than full-service billing.
Understand exactly what services are included in the quoted rate and what additional charges might apply for services like credentialing, patient statements, or appeals processing.
What Is the Contract Length and Termination Policy?
Contract flexibility matters. While billing companies prefer longer commitments, practices should avoid being locked into multi-year agreements without performance guarantees.
Reasonable contract terms include 6-12 month initial commitments with 60-90 day termination notice requirements. Understand what happens to your data, whether you’ll receive transition support, and if any termination fees apply.
Are There Any Setup Fees or Hidden Costs?
Transparency about all costs prevents unpleasant surprises. Ask specifically about:
- Implementation or onboarding fees
- Software licensing charges
- Training costs for your staff
- Statement printing and mailing fees
- Reporting or analytics charges
- Credentialing or enrollment services
Reputable billing companies provide clear, comprehensive pricing without hidden fees.
Operational Process Questions
How Do You Handle Credentialing and Enrollment?
Provider credentialing with insurance payers represents a complex, time-consuming process. Your billing partner should offer comprehensive credentialing services or maintain relationships with credentialing specialists.
Ask about their credentialing timeline, success rate, and whether they monitor expiration dates to ensure uninterrupted insurance participation.
What Is Your Process for Charge Entry and Coding?
Accurate coding drives appropriate reimbursement. Inquire whether the billing company employs certified professional coders (CPCs), how they stay current with coding updates, and whether they conduct regular coding audits.
Understanding their charge entry timeline helps set expectations for how quickly superbills or encounter forms are processed after patient visits.
How Do You Handle Patient Billing and Collections?
Patient responsibility has grown significantly, making patient collections increasingly important. Your billing partner should maintain effective patient communication strategies including:
- Clear, easy-to-understand statements
- Multiple payment options (online portal, credit card, payment plans)
- Professional patient communication protocols
- Flexible payment arrangement policies
Ask about their patient collection rate and approach to difficult collection situations.
Performance Monitoring Questions
What Key Performance Indicators Do You Track?
Professional medical billing firms monitor comprehensive metrics to measure revenue cycle health. Essential KPIs include:
- Net collection rate (should exceed 95%)
- Days in accounts receivable (target below 40 days)
- Claim denial rate (target below 5%)
- First-pass acceptance rate (target above 95%)
- Clean claim rate
- Cost to collect
Request benchmark data showing how your practice will compare to industry standards and similar practices.
How Often Will We Review Performance?
Regular performance reviews ensure accountability and identify improvement opportunities. Establish expectations for monthly business reviews where your dedicated account manager presents detailed analytics and discusses optimization strategies.
These meetings should address current performance, trending issues, and proactive recommendations for revenue cycle management enhancement.
What Guarantees or Service Level Agreements Do You Offer?
Service level agreements (SLAs) formalize performance expectations. While not all billing companies offer formal guarantees, reputable firms commit to specific performance targets such as:
- Maximum charge entry turnaround time
- Minimum first-pass acceptance rate
- Maximum denial rate
- Days to post payments
- Response time for inquiries
These commitments provide recourse if the billing company fails to meet agreed-upon standards.
Compliance and Risk Management Questions
How Do You Stay Current With Regulatory Changes?
Healthcare regulations evolve constantly. Your billing partner must maintain current knowledge of:
- Coding updates (ICD-10, CPT, HCPCS)
- Medicare and Medicaid policy changes
- Commercial payer requirements
- Compliance regulations
- Fraud and abuse laws
Ask about their continuing education programs, industry certifications, and how they communicate regulatory changes that affect your practice.
What Compliance Auditing Do You Perform?
Proactive compliance auditing identifies potential issues before they become problems. Your billing company should conduct regular internal audits examining:
- Coding accuracy and documentation support
- Modifier usage appropriateness
- Billing pattern anomalies
- Charge capture completeness
These audits protect your practice from compliance violations and optimize appropriate reimbursement.
Do You Carry Professional Liability Insurance?
Professional liability insurance (errors and omissions coverage) protects both the billing company and your practice if billing errors lead to financial losses or compliance issues.
Verify that your potential billing partner maintains adequate insurance coverage and request a certificate of insurance for your records.
Making Your Final Decision
Creating a Comparison Framework
After interviewing multiple medical billing firms, create a standardized comparison framework evaluating each candidate across these dimensions:
- Industry experience and specialty expertise
- Technology capabilities and system compatibility
- Service delivery model and communication approach
- Pricing structure and contract terms
- Performance guarantees and accountability measures
- References and verifiable results
This structured evaluation ensures you’re comparing candidates objectively rather than on price alone.
| Evaluation Area | Question to Ask | Strong Answer | Red Flag |
|---|---|---|---|
| Specialty Expertise | Can you share references from clients in our specialty and size? | At least three current client references plus documented case studies | Only generic testimonials, no specialty-matched references |
| First-Pass Acceptance | What is your first-pass acceptance rate for our specialty and payers? | Above 95% | Near the 75–80% industry average, or no specialty-level data |
| Net Collection Rate | What NCR do you deliver for clients like us? | Above 95% | No benchmark data offered |
| Days in AR | What is your average Days in AR? | Below 40 days | Unable to share AR aging reports |
| Denial Management | How do you handle denied claims? | Denial rate below 5%, with root cause analysis and appeals within payer deadlines | Resubmission without analysis of why claims were denied |
| Pricing | What is your fee structure, and what does it include? | 4–8% of collections, with all inclusions listed in writing | Setup, statement, or reporting fees disclosed after signing |
| Contract Terms | What are the contract length and termination terms? | 6–12 month initial term, 60–90 day notice, transition support | Multi-year lock-in without performance guarantees |
| Compliance and Risk | How do you protect PHI and audit coding accuracy? | Signed BAA, regular coding audits, E&O and cyber liability insurance | No certificate of insurance or audit documentation |
Red Flags to Watch For
Certain warning signs indicate a billing company may not deliver promised results:
- Reluctance to provide references or case studies
- Unclear or evasive answers about their processes
- Pressure to sign contracts quickly without due diligence
- Promises that seem too good to be true (e.g., “We’ll increase your revenue 50% guaranteed”)
- Lack of specialty-specific experience
- Poor communication during the sales process
- Unwillingness to provide performance guarantees
Trust your instincts. If something feels wrong during the evaluation process, it likely won’t improve after you’ve signed a contract.
The Value of Proven Experience
Medical Billers and Coders brings over 25 years of specialized expertise to medical billing services. This extensive experience, combined with system-agnostic technology integration and dedicated account management, has helped thousands of practices reduce AR by an average of 30% while improving overall revenue cycle performance.
See Where Your Billing Stands Before You Compare Vendors
The questions in this guide work best when you know your own numbers first. If your net collection rate is below 95%, Days in AR runs past 40, or more than 5% of claims are denied, those gaps tell you which questions to press hardest with every billing company you interview.
MBC’s complimentary revenue cycle audit gives you that baseline. It covers:
- Net collection rate and first-pass acceptance compared with specialty benchmarks
- Denial rate by payer, with root causes identified
- AR aging by bucket, including balances internal staff may have abandoned
- Charge capture and billing efficiency gaps
- Recommendations specific to your specialty and payer mix
Request your complimentary revenue cycle audit to see your true collection gap before you sign with any billing partner. You can also reach MBC directly at 888-357-3226 or info@medicalbillersandcoders.com
Frequently Asked Questions
The typical transition takes 30-60 days, depending on practice size and complexity. A well-managed transition includes data migration, staff training, and parallel processing to ensure no claims are lost during the changeover.
Most practices reassign billing staff to front-office roles, patient coordination, or administrative support where they can focus on patient care rather than insurance follow-up and claim submission.
Yes. Experienced medical billing firms like Medical Billers and Coders regularly manage billing for multi-location practices, providing consolidated reporting while maintaining location-specific analytics as needed.
Monitor key metrics including days in AR (should be below 40), net collection rate (should exceed 95%), and denial rate (should be below 5%). Your billing partner should provide monthly reports tracking these indicators.
Review your contract’s termination clause and performance guarantees. Most agreements include 60-90 day termination notice requirements. Document specific performance issues and attempt resolution before initiating termination procedures.
Not on rate alone. A one-point difference in fee costs $20,000 a year on $2M in collections, while a partner that lifts net collection rate from 92% to 96% returns about $80,000 on the same base. Compare each firm’s documented NCR, denial rate, and Days in AR before you compare price.
Your organization does, and the contract should state that in writing. Confirm the billing company will return claim history, AR detail, payment records, and reports in a usable format within a set timeframe after termination. Also confirm whether transition support is included or billed separately. Vague data clauses often cause disputes during a switch.
No. Claims are submitted under the provider’s NPI, so the provider stays responsible for what is billed. This is why coding audits, modifier reviews, and errors and omissions coverage matter. Ask how the billing company documents coding decisions and how it alerts you when documentation doesn’t support the codes billed.
Yes. An audit sets a baseline for net collection rate, denial rate, AR aging, and first-pass acceptance, so you can measure a new partner against real numbers instead of sales projections. It also shows whether the firm can find specific revenue gaps in your claim data before you commit.
Shortlist three to five of the top medical billing companies that bill for your specialty. Fewer than three gives you no real benchmark for pricing or performance claims, and more than five makes side-by-side comparison hard to manage. Score each firm on the same criteria (NCR, Days in AR, denial rate, contract terms, and references) so the decision rests on documented results, not on the sales pitch.
A Subject Matter Expert in healthcare billing operations with nearly 10 years of experience, sharing insights on claims processing, coding support, and revenue cycle optimization. Dedicated to educating healthcare professionals on compliance, accuracy, and strategies to improve billing performance.
