The Best Medical Billing Service Providers of 2020

By Adam Uzialko,
business.com staff
| Updated
Jul 31, 2020

Medical billing services enable medical practices to outsource the time-consuming and arduous process of managing claims and securing insurance payments. Discover the best medical billing service providers.
Best Flexible Medical Billing Service
Exceptional usability
High flexibility
Consultative approach
Best for Large Practices
Exceptional healthcare IT suite
Extensive reporting tools
Intuitive software
Best RCM Service for Small Practices
Low cost
Certified coders and billers
Free implementation and training
Medical billing services enable medical practices to outsource the time-consuming and arduous process of managing claims and securing insurance payments. Discover the best medical billing service providers.
Updated 07/31/20

This page has been updated to include more information about the potential benefits of outsourcing your medical billing to a revenue cycle management (RCM) service.

When most people think of medicine, they probably don't think of billing beyond their own copayments and deductibles – unless, of course, they are members of the healthcare industry. Staff at medical practices and hospitals know how critical (and convoluted) medical billing is. Revenue cycle management is central to the successful operation of any healthcare organization, yet it is a timely and costly endeavor. However, it cannot be ignored, as ineffectual management of medical billing leads to delays in payment, underpayment, and even erroneous denials or rejections.

This guide covers the ins and outs of revenue cycle management as well as reviews of some of the top medical billing services. Business.com has also selected the best services that stand out from the crowd.

 

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Medical billing services remove the burden of revenue cycle management. With integrations for an organization's electronic medical records (EMR) systems and practice management software, claims can be generated by third-party staff or even automated systems. Outsourcing revenue cycle management also puts a dedicated team in charge of chasing denials and underpayments, reducing the workload of monitoring submitted claims in-house. Best of all, most services operate directly within a medical practice's existing practice management software, allowing staff to monitor progress on submitted claims.

While medical billing services offer a significant benefit to medical practices, it's important to choose the right one. Selecting the wrong partner can tie up the practice's money and possibly cause payments to fall through the cracks.

To ensure that revenue continues to flow smoothly, medical billing departments need to quickly and efficiently capture charges to create claims, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges are coming in, billers must keep tabs on previously submitted claims, ensuring they are not rejected or denied by payers. If they are, billers must revise those claims and resubmit them, as new charges continue to pile up. Clearly, there's a lot that can go wrong.

The challenges associated with medical revenue cycle management (RCM) require billing departments to be nimble and adaptable. Billing departments are also responsible for staying abreast of the latest updates, whether that's changing regulations or shifts in payers' policies. No matter which way you slice it, medical billing demands a lot of time, energy and money to run in-house. That's why many medical practices choose to outsource their revenue cycle management to third-party medical billing services, sometimes called RCM services. Unfortunately, it's a crowded space with many disreputable companies; finding a good one can be tough but is important, because the right service can take the burden of billing off your practice, ideally reducing your expenses while also boosting revenue.  

Business.com researched some of the leading medical billing services to help you cut through the clutter. We've reviewed several quality services we encountered in our research and selected some as best picks, such as the best medical billing service for small practices, the best medical billing service for large practices and the most flexible medical billing service.

How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.
28
Considered
8
Researched
3
Selected

Compare Our Best Picks

  AdvancedMD ChartLogic CareCloud
Pricing (% monthly collections) ~3% to 8% ~3% to 6% ~3% to 7%
Implementation/training Included Included ~$1,000 per provider
First-pass claims rate ~95% to 97% >95% ~97%*
EMR/PMS requirements EMR/PMS required EMR/PMS required EMR/PMS agnostic
Contract requirements 1 Year 2 years 3 years

*Composite resolution rate (first and second pass)

Our Reviews

CareCloud: Best Flexible Medical Billing Service

CareCloud is an extremely flexible RCM service that can be used with any EMR or practice management software, as well as to outsource part or all of your medical billing.
CareCloud takes a consultative approach to help grow your practice over time.
CareCloud has a high implementation fee of $1,000 per provider and a lengthy contract term of three years.

CareCloud offers a medical billing service, healthcare IT suite, and consultative approach that is extremely flexible and tailored to the needs of each client. After CareCloud was acquired by MTBC earlier this year, the company revamped its software to be platform agnostic. Also, you can choose to outsource all of your medical billing to it or just a particular segment, making CareCloud the most flexible medical billing service we reviewed. For these reasons, it is our best pick for flexible medical billing service.

CareCloud Medical Billing Service Pricing

CareCloud's pricing largely depends on the same criteria other medical billing services use to determine their percentage of collections: practice size, specialty, claims volume and complexity of billing operations. Pricing is also significantly impacted by which of the three service tiers your practice selects. CareCloud's average costs range from 3% to 7% of net collections, which is lower than many of the other medical billing services in our review.

However, CareCloud also charges setup, implementation and training fees. These fees vary by the circumstances of a client practice, but a company representative estimated an average cost of $1,000 per provider. CareCloud also typically requires a minimum contract commitment of three years, one of the longer terms we found in our reviews.

CareCloud Medical Billing Process

CareCloud's onboarding process helps ensure practices are enrolled in Electronic Data Interchange (EDI) with payers, which allows practices or third parties acting on their behalf to submit claims and receive payments electronically. CareCloud's billing team includes coders with certifications from organizations such as the AAPC and AHIMA. CareCloud works with several clearinghouses, including Change Healthcare, TriZetto, Availity and Optum. The company also works directly with Medicare-associated payers.

The precise process depends on whether you choose to outsource all or some of your billing department to CareCloud. CareCloud can perform these tasks:

  • Claims generation and coding
  • Claims scrubbing
  • Unpaid claims follow-up
  • Denial management
  • Patient statements
  • Patient follow-up
  • Patient collections

CareCloud generates and codes the claims from superbills or other clinical documentation gathered by the practice during the patient encounter. CareCloud then scrubs the claims it has generated, submits them to the appropriate payers, follows up on unpaid claims, and manages rejections and denials.

CareCloud's billing rules engine, CollectiveIQ, scrubs claims for more than 120 million errors. The engine is regularly updated with new errors encountered by any of CareCloud's clients, which reduces common rejections and denials. Currently, CareCloud reports an organization-wide first-pass claims rate of 94%.

In addition to working on claims for payers like insurance companies, CareCloud's billing process includes work on patient statements. In the same way that CareCloud billers follow up on unpaid claims with payers, staff will follow up with patients. When funds are collected, CareCloud takes its percentage and deposits the money directly in the practice's accounts.

CareCloud Medical Billing Pros

CareCloud's biggest strength is its adaptability. You could outsource particular segments of your medical billing (such as unpaid claims follow-up and denial management), or opt for a comprehensive outsourcing plan in which CareCloud handles the entire process, from claims generation to denial management. This flexibility avails CareCloud to practices both small and large across any number of specialties.

CareCloud's software suite is extremely intuitive, designed with the typical patient visit in mind. The platform is included in the cost of the medical billing service but is not a requirement. Most medical billing services at least require clients to use their practice management software, but CareCloud is platform agnostic. However, if you do choose to use CareCloud's software, you will have access to an exceptional system. To learn more about CareCloud's electronic medical records systems or CareCloud's practice management software, read our reviews.

CareCloud Medical Billing Cons

CareCloud's major drawback is its high upfront expense, which is typically about $1,000 per provider. Additionally, CareCloud's three-year contract term is among the longer terms in our review. A CareCloud representative explained the implementation charge as part of the company's consultative model, stating that the company wants to serve as a partner with medical practices and, therefore, want a long-term commitment and "skin in the game." While CareCloud indeed offers a consultative approach that can help practices grow over the long term, these upfront fees could make an initial investment untenable for small practices on a tight budget.

AdvancedMD - Medical Billing Services: Best for Large Practices

AdvancedMD offers a powerful, user-friendly healthcare IT suite, which is included in the cost of the RCM.
Its extensive reporting tools make tracking financial performance and biller activity as easy as logging in to your practice management software.
AdvancedMD does not perform coding services, meaning your practice is responsible for properly coding claims in-house.

AdvancedMD historically focused on small, independent practices, but more recently moved into the larger provider space. It offers a medical billing service that includes access to its powerful EMR system and practice management software; however, it does not offer coding services. This means your practice is responsible for coding claims internally, which requires an in-house medical coder. However, the billing services that AdvancedMD does offer are exceptional, generating a companywide first-pass claims rate guaranteed to exceed 95%. It is a competitively priced service that has the flexibility and expertise to serve practices of varying sizes across a wide range of specialties. For these reasons, AdvancedMD is our best pick for large practices, which likely have the resources to overcome the company's lack of coding services.

AdvancedMD Medical Billing Service Pricing

Like most medical billing services, AdvancedMD charges a percentage of your monthly collections. Its typical pricing ranges from 3% to 8% depending on several factors, including practice size, specialty and billing process complexity. While this range is indicative of the company's typical clients, there are outliers that are charged as low as 2% of monthly collections or as high as 9%. The typical contract term for AdvancedMD's RCM service is one year, which is shorter than many other medical billing services in our review.

Included in AdvancedMD's medical billing service pricing is access to the full healthcare IT platform, including the EMR system and practice management software. It is required for RCM clients to use AdvancedMD's healthcare IT products, which is a standard requirement across the medical billing services we reviewed.

AdvancedMD Medical Billing Process

Since AdvancedMD does not offer medical coding services, your practice must code all claims before sending them to AdvancedMD. When you send the coded claims to AdvancedMD, the company scrubs the claims for any errors and submits them to the proper payers.

AdvancedMD's high first-pass claims rate means there are relatively few denials to deal with, but if a claim is denied, the service will work to revise and resubmit it until it is accepted and paid. AdvancedMD has a 72-hour resolution window from the time a claim is denied to when it is resolved and resubmitted.

If a payer or patient has not paid their outstanding balance, AdvancedMD billers will follow up to secure the payment within 40 days from the date the claim was filed or the patient statement was sent.

All billers on AdvancedMD's staff must have at least three years of experience in the industry. Although there are no certification requirements for AdvancedMD coders and billers, 10% to 20% of the company's billers are also certified coders, which helps when it comes to claims scrubbing.

AdvancedMD works with a wide range of clients, including small, independent practices and larger, multi-location practices with up to 100 providers. The average AdvancedMD client has about 3,000 patient encounters per month, while larger clients may have up to 30,000 encounters per month. The company's wide range of experience makes it a flexible service that can work with smaller practices, but also excel at revenue cycle management for large practices.

AdvancedMD Medical Billing Service Pros

AdvancedMD excels at claims scrubbing and first-pass acceptance by payers, primarily because it leverages the same claims scrubber used by its preferred clearinghouse partner, Optum. This means any issues that would be flagged by Optum's system are captured by AdvancedMD prior to submission, increasing the likelihood that claims make it through to payers and are accepted the first time they're submitted.

In the event of a denial, AdvancedMD guarantees a rapid turnaround time of three days to resubmission. Similarly, any claims that languish unpaid are followed up on within 40 days (often much sooner). These processes help turn claims over regularly, reducing the time it takes from the day your practice renders services to the day you receive payment.

AdvancedMD's RCM service includes access to its exceptional EMR system and practice management software for no additional cost. To learn more about AdvancedMD's medical practice management software or AdvancedMD's electronic medical records systems, read our reviews.

AdvancedMD Medical Billing Cons

The clear drawback to AdvancedMD's medical billing service is its lack of coding services. Even if you outsource your medical billing to AdvancedMD, you will have to keep a medical coder on staff to prepare claims for submission. The appeal of outsourcing medical billing is often cutting the expenses associated with keeping a full-time, in-house billing department on payroll; AdvancedMD can only cut so much of those expenses, since you need to retain coders.

ChartLogic: Best RCM Service for Small Practices

ChartLogic is a low-cost solution, with typical pricing ranging from 3% to 6% of monthly collections.
ChartLogic's staff of medical coders and billers are all required to be certified through a reputable medical billing and coding association.
ChartLogic's RCM clients are required to be on both the vendor's EMR and practice management software unless there are special circumstances.

ChartLogic is a low-cost medical billing service that maintains a fully certified staff of medical coders and billers. The company assigns a dedicated account manager to help onboard clients, who must also use the company's healthcare IT platform, including the EMR system, practice management software and patient portal solution. A series of pre- and post-implementation check-ins means any issues can be addressed directly by the practice's one-to-one contact in the dedicated account manager, all of which is included in the competitively priced medical billing service percentage.

Not only are ChartLogic's coders and billers all certified, but they have experience working in certain specialties and are assigned to you based on your practice's specialty and the complexity of your billing processes. Similarly, ChartLogic pairs coders and billers with client practices based on their understanding of the geographic region and local insurance company policies. ChartLogic is our best pick for small practices for its holistic approach and "one-stop shop" philosophy, which simplifies the complex process of selecting a medical billing service provider and healthcare IT platform.

ChartLogic Medical Billing Service Pricing

ChartLogic's pricing is an industry-standard percentage of monthly collections captured on behalf of your practice. It starts at 3% of your collections, which is common for its competitors, but tends to top out around a low-cost 6% of monthly collections. This makes ChartLogic one of the most cost-effective medical billing services in our review. ChartLogic typically requires a two-year contract term for its RCM services.

ChartLogic charges no additional implementation or training fees and includes its EMR and practice management software in the percentage of monthly collections. Included in implementation is a billing analysis of your practice's past performance and the assignment of a dedicated account manager, who oversees implementation and offers a post-implementation evaluation.

ChartLogic Medical Billing Process

ChartLogic's process begins with a full review of your past billing activity and collections. The process is designed to identify where your practice is at in terms of financials and opportunities for immediate growth or improvement.

Once the analysis is complete, if your practice and the company choose to move forward, ChartLogic provides a full agreement outlining its responsibilities as well as yours. Once that agreement is signed, the implementation and onboarding team takes over. Software implementation and training occurs in tandem with provider credentialing with the necessary payers, as well as logistics like setting up bank account information for direct remittance of funds. ChartLogic does not use a lockbox system in which practice funds first flow to the company and then into the bank account; instead, collected funds are directly deposited minus ChartLogic's rate.

Once billing begins in earnest, your practice is assigned a billing account manager, who serves as a direct point of contact between your practice and ChartLogic. ChartLogic's team of certified coders and billers reviews, codes and edits all your claims. Claims also go through a claims scrubber, which flags any errors that could potentially lead to denial by payers.

ChartLogic maintains full integrations with Change Healthcare and RelayHealth clearinghouses. The company offers insurance eligibility verification services prior to patient appointments through those organizations.

Once claims are submitted, ChartLogic continues to monitor them until they are paid or rejected, following up on unpaid claims regularly and revising and resubmitting denials. The timeline for follow-ups and denial management varies by practice. ChartLogic also manages patient billing and follow-ups. The company can also refer patient balances to collections, but it allows your practice to set policies regarding if and when it's allowed to do so.

ChartLogic Medical Billing Pros

ChartLogic stands out for its full certification requirements for coders and billers on its staff. Many medical billing services maintain some certified staff, but they don't necessarily require certifications for new hires. A completely certified staff guarantees that your claims will be handled by staff members with up-to-date knowledge of best practices and insurance company policies.

ChartLogic is a low-cost solution suitable for small practices, especially those looking for a complete healthcare IT suite that includes an EMR system and practice management software. The dedicated billing manager serves as a point person to help your practice from start to finish, including the post-implementation evaluation. This onboarding process can ease what is often a challenging and costly step.

Additionally, ChartLogic directly remits payments into your practice's account without holding funds in a third-party account or "lockbox" like many other medical billing services do. This means faster delivery of funds after payers accept claims and remit payment.

ChartLogic Medical Billing Cons

The biggest drawback to ChartLogic's medical billing service is its requirement that you also use its EMR system and practice management software. This means that practices using other platforms typically cannot use ChartLogic for medical billing unless they are willing to switch healthcare IT suites, which can be an arduous, expensive and time-consuming process. However, a representative of ChartLogic told business.com that there are some exceptions in which a client practice might be able to keep its existing practice management software; the ChartLogic EMR system, though, is generally always required. Luckily, the cost of the EMR and practice management software is included in the monthly percentage of collections charged for RCM services.

Costs of Medical Billing Services

Pricing models are largely the same from company to company in the medical billing service industry. Most companies in our review charge a percentage of the 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 the low and high 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 question sales representatives to find out their companies' policies.

Occasionally, medical billing services will institute a monthly minimum that must be paid in case the percentage of a practice's revenue for the month isn't high enough. Other services charge a monthly per-provider base price, on top of which it takes a small percentage of collections, but this model is rare.

Buying Guide

What Are Medical Billing Services?

Medical billing services allow practices to outsource their medical coding and billing process. 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, reducing or eliminating the workload associated with in-house billing. Best of all, most services operate directly within your medical practice's existing practice management software, allowing staff to monitor progress on submitted claims.

While medical billing services offer a significant benefit to medical practices, it's important to choose the right one for your practice. Selecting the wrong partner can tie up your practice's money and possibly allow patients' payments to fall through the cracks. To ensure that revenue continues to flow smoothly, medical billing departments need to quickly and efficiently capture charges to create claims, properly code those claims, and submit them through the right channels to the proper payers. Even as new charges are coming in, billers must keep tabs on previously submitted claims, ensuring they are not rejected or denied by payers. If they are, billers must revise those claims and resubmit them, as new charges continue to pile up. Medical billers are also responsible for sending patient statements for copayments or out-of-pocket expenses, as well as following up with unpaid patient accounts.

The challenges associated with medical revenue cycle management require billing departments to be nimble and adaptable. Billing departments are also responsible for staying abreast of the latest updates, whether that's changing regulations or shifts in payers' policies. No matter which way you slice it, medical billing demands a lot of time, energy and money to run in-house. That's why many medical practices choose to outsource their revenue cycle management to third-party medical billing services, sometimes called RCM services.

The Benefits of Medical Billing 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.

  • 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.

  • 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. Faster reimbursement means less waiting around for payment on the services you've already rendered.

  • Reduced denial and rejection rates: With its knowledge of payers' expectations and advanced claims 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 a good RCM service.

  • Patient statements and follow-up: Medical billing services don't just deal with insurance companies; they also manage your patient statements. Whenever a patient owes money out of pocket and hasn't paid in your office, a medical billing service will ensure they receive a statement explaining their bill. If the bill goes unpaid, the billing service will follow up with your patients. In extreme cases, a medical billing service could 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 varies by service, but this access to a full accounting of your practice's finances can be extremely helpful to the success of your business.

  • 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.

Outsourced Revenue Cycle Management vs. In-House Billing

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 between 4% and 9%. Based on that guideline, you should be able to get 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 with the number of patients the practice serves. For larger practices and hospitals, a billing service may not be worthwhile if you have the budget for medical coders, a large volume of claims and the resources to handle them internally.

How Does Medical Billing and Coding Help Increase Cash Flow?

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 moves through the clearinghouse to the payer and is 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, 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. Be sure to ask for clarification on how a company tracks its clean claims 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 that can be fixed. 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 your claim gets paid in a timely manner.

Sometimes claims sit with a payer without any response. In these cases, medical billing services often follow up (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 quicker for the services your practice has rendered, keeping your cash flow regular and healthy.

Medical Billing Trends to Watch

Initial ICD-11 diagnostic and procedural codes up for adoption

You might have seen the flurry of news stories last year about the World Health Organization classifying burnout as a workplace phenomenon and identifying gaming addiction as a risk facing youth. Those headlines came out of the 22nd World Health Assembly, where the WHO presented a proposed draft of the ICD-11 diagnostic and procedural codes.

You might be thinking, "Wait, we just shifted to ICD-10. What gives?" The transition to ICD-10 in the U.S. took place significantly after the rest of the world adopted the standards. In fact, most countries implemented ICD-10 in 1998, while the U.S. only meaningfully moved toward ICD-10 in 2015. Now that the proposed ICD-11 standards have been released, it's up to WHO member states whether they endorse the codes or not.

ICD-11 builds on the ICD-10 coding standards, growing the list of codes in the library from 14,400 to 55,000. While that's a big expansion (likely stirring nightmares about yet another transition), healthcare IT vendors and healthcare providers likely have some time before an IDC-11 implementation is required. Assuming the standards are adopted by member states, they still wouldn't go into effect until January 2022. Still, keeping tabs on ICD-11 as it weaves its way through the regulatory process is key to prepare for any impending changes.  

Continued growth of the medical billing service market

Healthcare IT is on the rise around the world, driving growth of the medical billing service industry forward as well. Market Research Engine issued a report projecting that the medical billing service industry will eclipse $16 billion in total value by 2024. According to the report, the growth will be driven by rapidly changing regulations that make third-party billing more attractive, and by the desire of healthcare providers to cut their in-house expenses while growing revenue.

Data privacy will still be a drag on growth, however, giving pause to healthcare providers who are hesitant to provide sensitive patient records to a third party. Demonstrating staff certification and adherence to privacy best practices will be key for medical billing services to remain successful.

Medical Billing Services FAQs

The answers to these frequently asked questions can shed additional light on the medical billing services space.

How do you process medical billing?

The medical billing process is complex and involves several third parties. However, it can be broken down simply into these general components:

  1. Claims are generated and coded based on clinical data.
  2. Claims are scrubbed (manually and/or using an automated system) and edited if any errors are found.
  3. Claims are transmitted through clearinghouses to the appropriate payers, which are insurance companies, Medicare, and Medicaid.
  4. When payment is received, the billing service posts it to the practice's account less the service's percentage.
  5. If claims languish unpaid, a medical billing service is responsible for following up with payers.
  6. If a claim is denied, a medical billing service revises and resubmits the claim, following it until it is paid.
  7. All financial data is stored for reporting, in some cases directly in the practice management system used by the medical practice.

Part of the process is also tracking patient balances owed and following up on unpaid accounts. In some cases, a medical billing service will refer the balance to collections.

What characteristics of medical billing services should you look for?

Medical billing services should be secure and HIPAA compliant. They should also employ certified medical coders and billers, preferably with years of experience in the industry. Some medical billing services also offer access to their electronic medical records (EMR) systems and practice management software as part of the percentage costs. If you're in need of these platforms, a medical billing service could be the way to go.

Before signing up with a medical billing service, ask for a sample contract or operating agreement in writing that spells out the percentage of collections you will be charged and the responsibilities of both the billing service and your own practice. You should also seek out practices similar to your own and request recommendations on medical billing services they've successfully used.

Why should you outsource your medical billing process?

Outsourced revenue cycle management is right for some medical practices but not for others. If you find that claims are languishing unpaid or that you are receiving a high rate of rejections, you might consider partnering with an experienced medical billing service. Additionally, if the cost of a medical billing service is lower than maintaining full-time coders and billers in-house, outsourcing could likely result in cost savings.

Our Methodology

We researched dozens of prominent vendors in the medical billing space to determine which were worthy of our best picks. Our initial research included reviewing client testimonials, other reviews, company websites and Better Business Bureau ratings. We also examined brands' other offerings in the healthcare space; for example, we considered whether they offer electronic medical record software.

We used the information we gathered to narrow down our initial vendors list to 10 finalists to be considered for reviews and best picks. We then considered the following factors to determine our best picks:

  • Pricing: How does the service's pricing compare to others in our review, and is the company upfront about how its pricing model works and what is included in the price?

  • Additional fees: Are there fees on top of the base pricing? Does the company explain these fees in a forthcoming manner?

  • Contract requirements: What is the minimum contract length? Is there an opportunity to cancel early for no fee if the service does not meet expectations?

  • Healthcare IT suite: Does the company offer proprietary electronic medical records software or practice management software? If so, does the company require that RCM service clients use its IT systems, or can they integrate with third-party systems?

  • Claims process: What does the claims process look like, and what services does the company include in its price? Are there certified coders on staff? Will staff follow up on outdated or denied claims?

  • Specialties: What medical specialties does the service commonly work with, and will it tailor its process to the needs of your practice given its specialty?

  • First-pass claims rate: How many claims are generally accepted by payers on the first pass, and how many require resubmission or follow-ups?

  • Denial management: What does the RCM service's denial management process look like? Does it handle all types of denials and rejections or only certain types?

  • Biller and coder certifications: What type of training, education or certifications are the billers and coders for the RCM service required to maintain?

  • Reporting: What kind of financial reporting can a practice expect, and how often? Are reports customizable? Are they available on demand?

In the end, we selected ChartLogic as the best medical billing service for small practices, AdvancedMD as the best medical billing service for large practices, and CareCloud as the most flexible medical billing service.

What to Expect in 2020

Since 2014, 90% of solo practitioners and small medical practices say they plan to outsource their medical billing as a way to reduce their overhead and eliminate labor-intensive, in-house billing operations. It should come as no surprise that the medical billing service industry is projected to reach a market value of $16.9 billion by 2024. In 2020, more medical practices are expected to outsource their medical billing to third-party services.

As technology improves, so do medical billing services' offerings. Automation has become 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 revenue cycle management 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 so medical billers can quickly and easily scrub and submit claims through clearinghouses to payers.

From the moment a patient's insurance eligibility is verified to when payments are 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 when it comes to delivering statements and capturing payments. Many services have begun implementing payment plans and other useful features that 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.

The global spread of COVID-19, also known as the novel coronavirus, has led to questions among some medical billers and coders about how to classify the illness using ICD-10 codes. For medical billers, although COVID-19 is a new illness, there are existing codes within ICD-10 that apply to the condition. For most coronavirus patients, medical coders can use the B97.29 code, which indicates "other coronavirus as the cause of diseases classified elsewhere." Additionally, the World Health Organization has released guidance to use the emergency ICD code U07.1 to refer to COVID-19 as an acute respiratory disease. The ICD-11 code for the illness is RA01.0.

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How do I collect overdue payments from clients?
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Lee Werrell
Lee Werrell
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Hi Kassandra, Overdue payments are a chronic problem in professional services, which is why I've always advocated being paid in advance, even if it means a small discount. There are times when payments are late because of client cash flow problems (primarily in smaller businesses), or because invoices are lost, or because mistakes are made. But late payments are usually a product of either overly bureaucratic rules being enforced or just sloth. When a client says "It takes 30 days to go...
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How do I get started building a medical billing company?
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Jim Cucinotta
Jim Cucinotta
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I would look at which states you want to bill in. Then go to each state's department of commerce website as you will need to get licensed in each state to be able to bill. From there, I would post on LinkedIn or a similar site to find people who know how to bill, what software you need to get started, etc. That should get you moving in the right direction. Good luck.
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Other Services Considered

Small, independent practices can sometimes have a tough time finding a medical billing service designed with their needs in mind. DrChrono is a flexible medical billing service that can meet the needs of small practices of any specialty at a competitive price. The company works with clients regardless of size, specialty and claims volume, but it generally partners with clients in the space of one to 15 providers or 16 to 25 providers. This is why DrChrono is our best pick for medical billing service for small practices. Read Review.

A medical billing service should improve your billing operations in two ways: by increasing the number of claims accepted by payers on the first pass and also by reducing the costs associated with keeping an in-house billing department. Kareo's medical billing service blends a competitive price with a high first-pass claims rate. Moreover, the company includes access to its electronic medical records (EMR) software and practice management software as part of its cost – a percentage of collections it takes for revenue cycle management. If you only want to outsource part of your medical billing process, Kareo is able to take on specific elements as well, such as charge entry and coding, and then leave the rest to your own staff. Read Review.

Medical billing services offer practices the option of outsourcing their billing, ideally in a bid to increase collections while controlling expenses associated in-house billing operations. AthenaCollector, athenahealth's practice management software and medical billing service, aims to reduce the number of denials by using a rules engine and human medical billers that scrub each claim. However, practices are still responsible for managing charge entry and coding. Athenahealth generally works with large practices, though the company does have many clients in the small practice space of one to 10 providers. Read Review.

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