What Is the Going Rate for Medical Billing Services in 2023?
Medical billing services are an essential component of the healthcare industry, supporting healthcare providers and ensuring they are adequately reimbursed for their services. In 2023, the going rate for medical billing services varies depending on several factors. This article will explore these factors and provide an overview of the going rate for medical billing services in 2023.
What are the factors affecting the going rate of medical billing services?
If you obtain quotes to outsource your medical billing services, you’ll notice quite noticeable differences in these quotes. Of course, it’s expected that not all billing companies will have a standard price, but it is worth learning about the factors that influence the going rate of medical billing services.
Several factors affect the going rate for medical billing services, and these include but are not limited to:
- Geographic location and size of the company
- The complexity of billing services rendered (medical billing or RCM)
- The volume of services rendered
- The experience and expertise of the medical billing company
- The level of technology and automation harnessed by the billing company
The medical billing outsourcing market is expected to experience an 11.56% growth until 2030. This growth will attract more companies to the market. This is another factor that will continue to influence the going rate of medical billing services in certain regions.
What Is the Going Rate for Medical Billing Services in 2023
The going rate for medical billing services varies depending on the above factors. However, on average, the cost of medical billing services ranges from 4% to 10% of the total revenue generated by the healthcare provider. This percentage includes all costs associated with medical billing, including technology, staff, and overhead.
For example, if a healthcare provider generates $1 million in revenue per year, the cost of medical billing services could range from $40,000 to $100,000 per year. It is important to note that these percentages are only estimates and may not be accurate for every healthcare provider. It is recommended that healthcare providers shop around and obtain quotes from multiple medical billing companies to find the best rate for their specific needs.
Another essential factor to consider when calculating the cost of medical billing services is the type of payment structure used by the medical billing company. Below is a summary of the payment structures you can encounter in the US, but the most common structures are fee-for-service and percentage based, which we will elaborate on
Pricing Model Options of Medical Billing Companies in the US
Pricing Model Type
Based on a percentage of the total collections received by the medical billing company on behalf of the practice. Typically, the percentage ranges from 5% to 10% but can vary.
Involves charging a fixed fee for the medical billing services provided. The fee may be charged on a per-claim basis or a monthly basis, and it can vary depending on the complexity of the services provided.
This model combines elements of both the percentage of collections and flat fee models. The medical billing company charges a flat fee for basic services, such as claim submission and follow-up, and a percentage of collections for more complex services, such as appeals and denials management.
Entails charging a fixed fee per claim submitted to insurance companies. The fee may vary depending on the complexity of the claim, such as the number of services provided or the type of insurance plan.
Centered around charging a fixed hourly rate for the medical billing services provided. The rate may vary depending on the level of expertise required and the complexity of the services provided.
Below is a summary of the payment structures you can encounter in the US, but the most common structures are fee-for-service and percentage based, which we will elaborate on.
This type of payment structure involves paying a flat fee for each service rendered. This payment structure is best suited for healthcare providers who have a lower volume of services rendered.
On the other hand, these structures involve paying a percentage of the total revenue generated by the healthcare provider. This payment structure is best suited for healthcare providers who have a higher volume of services rendered.
In addition to the cost of medical billing services, healthcare providers should consider the benefits of outsourcing medical billing. Outsourcing medical billing can save healthcare providers time and money, eliminating the need to hire and train in-house staff. Additionally, outsourcing medical billing can improve the accuracy and efficiency of billing, resulting in fewer denials and faster payments.
The following section will break down these benefits even further.
With the current going rate of medical billing services, why should medical practices outsource medical billing services?
Outsourcing medical billing services has become increasingly common among healthcare providers and for a good reason. There are several benefits to outsourcing medical billing services, including:
Operational Cost Reduction
Outsourcing medical billing services can be more cost-effective than hiring and training in-house staff. The current labor market conditions in the US make it difficult for healthcare practices to source and retain reliable talent.
Medical billing companies have dedicated teams and advanced technology to streamline the billing process, resulting in fewer errors, faster reimbursements, and lower administrative costs.
Medical billing companies deeply understand the complex coding and documentation requirements of insurance companies and third-party payers. By ensuring that claims are accurately coded and documented, medical billing companies can help healthcare providers maximize their revenue and minimize denials.
Improved accuracy and efficiency
Medical billing companies have advanced technology and dedicated staff that can help healthcare providers streamline their billing processes and reduce errors. This can help healthcare providers save time and money while improving the accuracy and efficiency of their billing operations.
Access to expertise and transfer to skills.
Medical billing companies have staff with specialized expertise in medical billing and coding. Outsourcing medical billing services allows healthcare providers to access this expertise without investing in extensive training or hiring additional staff.
Increased focus on patient care
By outsourcing medical billing services, healthcare providers can focus on providing high-quality patient care rather than spending time and resources on administrative tasks. This can help improve patient satisfaction and outcomes while also increasing the efficiency and productivity of healthcare providers.
Medical billing companies can also introduce additional services that healthcare practices may not be aware of, such as remote patient monitoring and chronic care management services. These could lead to exposing other revenue streams as well as improving the patient experience.
Medical billing companies can quickly scale their services up or down to meet the needs of healthcare providers. This can be particularly beneficial for healthcare providers who experience fluctuations in patient volume or have limited resources. With medical billing companies, medical practices can change the size of their billing teams on demand and without hiring or firing new personnel.
Go deeper into what is the going rate of medical billing services
Let’s do a quick recap of what we discussed and then delve deeper into the going rate of medical services in 2023.
- Medical billing service companies have different ways of charging, but on average, medical practices can expect to pay between 4% to 10% of their total collections to the billing service.
- While some billing services charge a flat fee, others prefer to charge a percentage of the total collections.
- Percentage-based billing solutions may be more cost-effective for smaller medical practices, but larger practices may benefit from paying a flat fee.
- It’s important to note that the medical billing service cost can vary based on factors such as the size and complexity of the medical practice and the medical billing software used.
- Outsourced medical billing services, such as Neolytix, can save healthcare providers time and money, while also improving the accuracy and efficiency of billing.
- This leads to a reduction in the time spent working on billing and allows medical practices to focus on patient care.
Learn more about outsourcing medical billing service rates
Neolytix has been providing stellar medical billing services to healthcare practices of all sizes nationwide for over 11 years. We guarantee improvement in our client’s revenue cycle, whether exclusively focused on medical billing and coding or the revenue cycle as a whole.
Schedule a FREE, no-obligation consultation with a Neolytix Medical Billing Expert. Learn more about the going rates for medical billing services, what fee structure would work best for your practice, and what benefits to expect.