The Best Medical Billing Services of 2023

Medical billing services can alleviate the burden of coding claims and chasing collections. The best services offer certified medical coders and billers who can create, submit and follow up on claims to ensure they get paid quickly and in full. Most medical billing services also offer rejection and denial management services, employing a team to revise and resubmit claims that clearinghouses and payers refuse. To help you choose the best medical billing service for your business, we examined the top medical billing companies, evaluating each on price, process, software and ease of use.

Pricing models are primarily the same from company to company in the medical billing industry. Most companies in our review charge a percentage of your net monthly collections, meaning the more revenue they generate for you, the more they get paid. Those percentages typically fall between 3% and 9%, although there are outliers on both ends.

Some companies charge additional fees, such as setup, implementation or clearinghouse fees. These fees can vary greatly by company, so it’s important to ask sales representatives about their companies’ policies.

Occasionally, medical billing services will institute a monthly minimum in case the practice’s revenue for the month isn’t high enough to be profitable for the billing company. Other services charge a monthly per-provider base price, taking a small percentage of collections on top of that, but this model is rare.

Medical billing services allow practices to outsource their medical coding and billing processes. Also known as revenue cycle management (RCM) services, medical billing companies remove the burden of coding claims, submitting them to payers, following up on unpaid claims and managing denied claims.

Outsourcing your RCM puts a dedicated team in charge of generating your claims, scrubbing them for errors, and chasing denials or underpayments, which reduces or eliminates the workload associated with in-house billing. Best of all, most services operate directly within your clinic’s existing practice management software, allowing your staff to monitor the progress of your submitted claims.

While medical billing services offer significant benefits, it’s important to choose the right one for your practice. The wrong partner could tie up your practice’s money and possibly allow patients’ payments to fall through the cracks. To ensure smooth cash flow, medical billing departments need to capture charges and create claims for them quickly, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges come in, the billers must keep tabs on previously submitted claims in case they are rejected or denied by payers. If they are, the billers must revise and resubmit those claims – without falling behind on the new claims. Medical billers are also responsible for sending statements to patients for copayments or out-of-pocket expenses and following up on unpaid patient accounts.

The challenges of medical RCM require billing departments to be nimble and adaptable. They must stay abreast of updates, such as changing regulations and shifts in payers’ policies. No matter which way you slice it, in-house medical billing demands a lot of time, energy and money. That’s why many medical practices outsource the process to third-party medical billing companies, sometimes called RCM services.

Medical billing services help medical practices in various ways. These are the major benefits of medical billing services:

• Streamlined back-office processes: Outsourcing to a medical billing service reduces the staff and resources your practice must expend on back-office processes like billing and coding. Because these services minimize the administrative burden on your staff, they have been known to reduce burnout in the healthcare field.
• Payment tied to success: A medical billing service’s payment is connected to the success of your practice, since it generally costs a percentage of your monthly collections to outsource to an RCM service. The more money a medical billing service successfully collects on behalf of your practice, the more it gets paid, so it is invested in helping you succeed.
• Faster reimbursements: Medical billing services are experts in coding and billing, so they can typically navigate the process much more easily than a single practice can. This is especially true if the RCM service has an existing relationship with clearinghouses and payers. This means less waiting around for payment on the services you’ve already rendered.
• Lower denial and rejection rates: With its knowledge of payers’ expectations and advanced claim-scrubbing software, a good medical billing service should immediately reduce the rate of your claims’ denial or rejection by payers. Look for a first-pass claims rate above 95% to be sure you’re partnering with an effective RCM service.
• Patient statements and follow-up: Medical billing services don’t just deal with insurance companies; they also manage your patients’ statements. Whenever a patient owes money out of pocket and hasn’t paid in your office, your medical billing service will send them a statement explaining their bill. If the bill goes unpaid, the billing service will follow up with the patient. In extreme cases, a medical billing service may even refer unpaid accounts to a collections agency.
• Detailed financial reporting: Many medical billing services capture all the data related to your claims and couch it in easy-to-filter reports. The level of reporting and the usefulness of the visualizations vary by company, but this full accounting of your practice’s finances can be extremely helpful.
• HIPAA compliance: By law, medical billing services must comply with the Health Insurance Portability and Accountability Act. Any sensitive patient data required for coding claims and billing must be secure at all times, both at rest and in transit. Many medical billing services work directly within your practice’s healthcare IT platform, leveraging the same security measures you trust on a daily basis.

While outsourcing isn’t right for everyone, it can help medical practices that are having trouble operating the back office smoothly. Best of all, a good medical billing service can improve your overall cash flow.

Whether you should contract with a medical billing service or keep your billing in-house depends on how large your practice is, how much revenue you take in and how you utilize your staff. To do billing in-house, you will need a certified medical coder on staff. You will also need to keep up with ever-changing medical laws and codes. So many things can go wrong with medical claims, such as simple coding errors, that will make insurance companies reject them. If you manage your billing in-house, it will be up to you and your staff to deal with rejected claims. Billing services take care of all of that for you, including staying on top of laws, codes and policies.

Cost can ultimately determine the smartest choice for your practice. In-house billing requires payroll for a medical coder and usually an annual license for medical billing software. Someone with this certification will cost more to employ than an average clinical staff member, and taking care of claims will likely be their full-time responsibility. Billing services typically charge a percentage of net collections, often 4% to 9%. This should give you a general idea of what makes financial sense for your practice as you consider a medical coder’s salary versus the speculative cost of a service’s percentage. However, there are other costs to your practice to consider for each route.

Outsourced billing can be a good solution for small practices that need their staff to focus on other aspects of running the office. Having one person on payroll as a medical coder may not make sense in terms of the number of patients the practice serves. For larger practices and hospitals, a billing service may not be worthwhile if they have the budget for medical coders, a large volume of claims and the resources to handle them internally.

A dedicated medical billing and coding department can improve your practice’s cash flow by reducing the time a claim spends in accounts receivable, a metric referred to as “days in A/R.”

First-Pass Claims Rate

Many RCM services focus on reducing days in A/R by coding clean claims and scrubbing them for errors with the same or similar rules that clearinghouses use. This improves the chances that a claim will move through the clearinghouse to the payer and be reimbursed on the first pass. The rate at which claims are approved and paid after the first submission is known as a medical billing service’s first-pass claims rate or clean claims rate. This is a critical element of choosing a service: The higher a company’s first-pass claims rate is, the better.

However, not all services track clean claims rates in the same way. Some companies only tally a “clean claim” if it was accepted and paid. Others factor in unpaid claims that were not denied, inflating their first-pass claims rate. Ask a company for clarification on how it tracks its clean claims rate before basing your decision on that rate.

Faster Payments With Denial Management and Follow-up

Medical billing services can also expedite the revision of rejected or denied claims. When a payer rejects a claim, it is usually due to a clerical error. Once edited, the claim can be resubmitted for payment. Good medical billing services keep close tabs on rejections and denials, acting swiftly to revise any errors and ensure timely payment.

Sometimes claims sit with a payer for a while without any response. In these cases, medical billing services follow up (sometimes rather aggressively) to get the payer to respond. This often results in faster approval and reimbursement. In other cases, it results in a denial or rejection; however, that also gives the billing service the opportunity to revise and resubmit the claim.

Each of these elements of an RCM service contribute to downward pressure on the days in A/R, which means you get paid sooner for the services your practice has rendered, keeping your cash flow regular and healthy.

Many medical practice software solutions and third-party services go hand in hand. For example, EMR systems and practice management software are closely related. A medical billing service might work within your practice management software, while a medical transcription service can help you create notes in your patients’ charts, which are stored in your EMR system.

If you’re looking for a full suite of healthcare IT solutions or additional medical practice services to improve the way your practice runs, take a look at our other medical practice review categories.

• EMR systems: An EMR system contains all the necessary clinical tools for a provider’s encounters with its patients. In an EMR system, providers can review their schedules, access patient charts, e-prescribe medication, and electronically order lab tests and access the results. Some EMR systems include tools to easily review patient histories and map trends in their health over time. An EMR system’s ability to integrate seamlessly with practice management software determines how well the administrative and clinical departments work together. It can be an indispensable tool to healthcare providers, but choosing the right one is key. To learn more, see our reviews of the top EMR systems on the market.
• Medical transcription services: Medical transcription services support the creation of internal documentation, patient charts and communications via dictation. They generally offer multiple ways to securely upload dictation, and then return a transcript within 24 hours. Some also offer direct EMR entry, plugging in transcribed notes to the appropriate place in an EMR system, which saves healthcare providers and staff time and effort. To learn more, see our choices for the best medical transcription services.
• Telemedicine software: Telemedicine is a relatively new technology that allows healthcare providers to see patients remotely. Using video conference platforms tailored to the needs and privacy regulations of healthcare organizations, HIPAA-compliant telemedicine software reduces unnecessary office visits. This is not only efficient for a medical practice, but also convenient for patients. It is also helpful in building and maintaining client relationships. To learn more, see our review of the best telemedicine software.

Through 2026, the worldwide medical billing outsourcing market is expected to grow at a compound annual growth rate (CAGR) of 11.5%, according to ReportLinker.com. This reflects an increasing tendency for solo practitioners and small medical practices to outsource their medical billing as a way to reduce their overhead and eliminate labor-intensive, in-house billing operations. In fact, the medical billing service industry is projected to reach a market value of $30.2 billion by 2030, according to Grand View Research. In short: In 2023, a growing number of medical practices are expected to outsource their medical billing to third-party services.

As technology improves, so do medical billing services’ offerings. Automation has been a key driver of growth in recent years, streamlining not only in-house medical billing operations, but also the way practices work with third-party RCM providers.

As cloud-based medical billing software and electronic claims processing become more common – especially with more effective integrations for EMR systems and practice management software – automation offers new opportunities for medical billers to quickly and easily scrub claims and submit them through clearinghouses to payers.

For example, practices and medical billing services often automate the creation of superbills. They may also automate the processes through which they verify that a superbill’s coding is accurate and billable. Claims transmission and patient statement generation may also be automated.

For example, Outbound AI has recently introduced generative AI technology to lessen billing staff administrative tasks. Through this technology, which includes ChatGPT, staff can more easily manage denials, process EOBs, and verify eligibility and benefits.

From the moment a patient’s insurance eligibility is verified to when payment is remitted, software is an essential element of the modern medical billing process. As healthcare IT products integrate machine learning algorithms, expect new opportunities for automation and increased accuracy in medical billing.

Modern medical billing software and services also allow healthcare organizations to personalize the patient experience in how they deliver statements and capture payments. Many services have begun implementing payment plans and other useful features to improve the patient experience. Expect more RCM providers to follow suit and double down on the trend of personalizing billing on a patient-by-patient basis.

Medical billing teams may also be expected to prioritize transparency throughout 2023 in response to both consumer and legislative concerns. For example, in Texas, Gov. Greg Abbott recently signed a bill mandating that hospitals not send patients to collections without first providing clear, itemized invoices.

Additionally, one consumer filed a complaint to Colorado’s Division of Insurance regarding a medical billing error that could affect tens of thousands of people. National news outlets have reported on this story, suggesting that transparency in medical billing will be of paramount concern nationwide in 2023.

In Minnesota, the Attorney General’s office has been holding public listening sessions about medical billing. These sessions are occurring as part of an investigation into the medical billing procedures of the health systems Allina Health and Mayo Clinic. This investigation suggests that medical practices and their billing teams must prioritize a positive, transparent patient experience in 2023.

Similarly, the No Surprises Act – implemented in 2022 to safeguard patients from unexpected medical bills – has come under scrutiny in 2023. Namely, when a federal district court invalidated part of the law, the American Medical Association voiced its support for this decision. However, in July 2023, federal executive agencies requested that the court reverse its ruling. Medical billing requirements may change as the Act’s provisions continue to take new shape.

Medical billing services should also be ready to accommodate potential changes to Medicare. For example, the U.S. Centers for Medicare and Medicaid Services (CMS) has expanded Medicare dental coverage for 2023. This expansion mandates that Medicare Parts A and B cover dental services key to patient treatment and disease outcomes. It also covers a broader set of circumstances, such as treatment to eliminate infections before organ transplants and some cardiac procedures. Billing services must adapt to such coverage shifts to be effective.