What Percentage Do Medical Billing Companies Charge? (2026 Complete Guide)
Managing medical billing has become increasingly complex for healthcare providers across the United States. Between changing payer requirements, rising denial rates, staffing shortages, and growing administrative costs, many practices are turning to outsourcing to protect their revenue. But one question comes up almost immediately: what medical billing percentage do companies charge, and how much of your collections should you expect to pay for professional billing services?
What percentage do medical billing companies charge?
The short answer: Most medical billing companies charge between 4% and 10% of monthly collections. However, the exact percentage your practice pays depends on several factors, including specialty, claim volume, service scope, and the overall health of your revenue cycle.
In this guide, we’ll break down average medical billing percentages in 2026, explain what affects pricing, highlight what’s included (and what isn’t), and help you determine whether the percentage you’re paying delivers real value.
Average Medical Billing Percentage in the USA (2026)
Medical billing outsourcing is typically priced as a percentage of the revenue collected. Here are the current industry benchmarks:
Practice Type | Typical Percentage |
Large practices / high volume | 4% – 6% |
Mid-sized practices | 5% – 7% |
Small practices (2–5 providers) | 6% – 8% |
Solo providers / low volume | 7% – 10% |
If your practice is paying between 4% and 8%, you’re within the standard market range for full-service medical billing in 2026.
Why Do Medical Billing Companies Charge a Percentage?
Many providers wonder why billing companies don’t simply charge a flat monthly fee. The percentage model is popular because it aligns incentives.
Here’s how it benefits your practice:
- The billing company earns more only when your collections increase
- There’s strong motivation to reduce denials and follow up on unpaid claims
- No large upfront investment is required
- Costs scale naturally with your revenue
This performance-based structure ensures your billing partner is focused on maximizing collections, not just processing claims.
Factors That Affect the Percentage You’ll Pay
Not every practice pays the same rate. Several variables influence your final percentage.
1. Practice Size and Claim Volume
Higher claim volumes allow billing companies to operate more efficiently. As a result:
- High-volume practices often qualify for lower rates (4%–6%)
- Low-volume or new practices typically pay higher percentages (7%–10%)
2. Specialty Complexity
Some specialties require advanced coding expertise, detailed documentation, and intensive payer follow-up. Higher-complexity specialties include:
- Anesthesia
- Pain management
- Orthopedics
- Cardiology
- Mental health and behavioral health
Choosing a billing company with specialty experience is critical—lower-cost providers without expertise often lead to higher denial rates and lost revenue.
3. Scope of Services Included
A basic billing package may only include:
- Charge entry
- Claim submission
- Payment posting
Full-service revenue cycle management typically includes:
- Insurance eligibility verification
- Medical coding
- Denial management and appeals
- Accounts receivable (AR) follow-up
- Patient billing and support
- Financial reporting
- Credentialing assistance
The more comprehensive the service, the greater the potential impact on your collections.
4. Current Revenue Cycle Health
If your practice has:
- High denial rates
- Aged AR balances
- Poor documentation workflows
…the billing company may need additional effort during onboarding, which can influence pricing.
What’s Included in the Percentage? (And What’s Not)
When evaluating medical billing percentages, it’s important to understand exactly what you’re paying for.
Typically included:
- Electronic claim submission
- Payment posting
- Insurance follow-up
- Denial management
- AR recovery
- Reporting and analytics
Possible additional fees:
- Setup or onboarding costs
- EHR or practice management integration
- Credentialing services
- Patient statements or call center support
- Minimum monthly volume requirements
Transparency matters. Established providers such as 5 Star Billing Services offer clear, comprehensive service packages so practices understand the full value behind the percentage they pay.
You can explore their full-service revenue cycle solutions at:
https://www.drbillingservice.com/
Percentage vs Other Medical Billing Pricing Models
While percentage-based pricing is the most common, some companies offer alternative models.
Per-Claim Pricing
- $4–$12 per claim
- Best for high-volume, low-complexity practices
Flat Monthly Fee
- Predictable costs
- May not include full AR follow-up or denial management
Hourly or Dedicated Staff Model
- Common for large healthcare organizations
- Requires internal oversight
For most small to mid-sized practices, the percentage model provides the best balance of flexibility, accountability, and performance.
How the Percentage Impacts Your Profit (ROI Matters More Than Cost)
Focusing only on the percentage can be misleading. What really matters is net revenue.
Example:
If your practice collects $100,000 per month:
- Billing fee at 6% = $6,000
If improved billing processes increase collections to $115,000:
- New billing fee = $6,900
- Net revenue increase = $8,100
Even with a slightly higher fee, your practice earns significantly more.
This is why high-performing billing partners focus on clean claims, faster reimbursements, and aggressive AR follow-up.
In-House Billing vs Outsourcing: Cost Comparison
Many practices compare outsourcing percentages to internal staffing costs.
In-house billing expenses include:
- Salary: $45,000–$65,000+ per biller
- Benefits and payroll taxes
- Training and turnover costs
- Billing software and technology
- Office space and overhead
- Compliance risk
Outsourcing eliminates these fixed costs while providing access to experienced billing professionals and scalable operations.
In many cases, practices reduce administrative expenses by 20%–40% through outsourcing.
How to Choose the Right Percentage (Not Just the Lowest)
The lowest percentage doesn’t always deliver the best results. When evaluating vendors, consider:
- Specialty-specific experience
- Certified coders and billing experts
- Transparent pricing structure
- Real-time reporting and analytics
- Strong denial management process
- HIPAA compliance and security
- Dedicated account management
Organizations like 5 Star Billing Services focus on performance-driven billing, helping practices improve collections rather than simply offering low-cost processing.
Questions to Ask Before Agreeing to a Percentage
Before signing a contract, ask:
- What services are included in the percentage?
- Are there any additional or hidden fees?
- Do you guarantee performance metrics (clean claim rate, AR days)?
- How do you handle denied or underpaid claims?
- Will we have a dedicated account manager?
- Is there a minimum monthly charge or long-term contract?
Clear answers help you avoid unexpected costs and ensure accountability.
2026 Trends Affecting Medical Billing Percentages
Several industry trends are influencing pricing and outsourcing demand:
- AI-assisted coding and automation improving efficiency
- Increasing payer complexity and audit activity
- Rising staffing shortages and labor costs
- Growth of hybrid onshore–offshore billing models
- Greater demand for full-service revenue cycle management
As administrative burdens increase, outsourcing is becoming a strategic decision rather than just a cost-saving measure.
Frequently Asked Questions (FAQs)
What is the average percentage charged by medical billing companies in 2026?
Most medical billing companies in the United States charge between 4% and 8% of monthly collections. Smaller practices, low-volume providers, or specialties with complex billing requirements may pay up to 10%, while larger or high-volume practices often qualify for lower rates around 4.
Is a lower medical billing percentage always better?
Not necessarily. A lower percentage does not guarantee better financial outcomes. If a billing company has weak denial management or poor follow-up, your collections may decrease. It’s more important to evaluate net revenue improvement, clean claim rates, and AR performance rather than choosing the lowest fee.
What services are typically included in the billing percentage?
Most full-service medical billing companies include:
Claim submission and tracking
Payment posting
Insurance follow-up
Denial management and appeals
Accounts receivable (AR) management
Financial reporting
However, some providers may charge extra for services like credentialing, EHR integration, or patient statements. Transparent vendors such as 5 Star Billing Services clearly outline what is included in their pricing structure.
How long does it take to see financial improvement after outsourcing medical billing?
Most practices begin to see measurable improvements within 60 to 90 days. During this period, the billing team works on reducing claim errors, clearing aged AR, improving denial resolution, and accelerating reimbursements.
Which practices benefit the most from percentage-based medical billing?
Percentage-based billing is ideal for:
Small to mid-sized practices without dedicated billing teams
Practices experiencing high denial rates or cash flow issues
Growing practices with fluctuating claim volumes
Specialty providers needing expert coding and compliance support
Full-service providers like 5 Star Billing Services offer specialty-focused revenue cycle management that helps practices increase collections while maintaining compliance and operational efficiency.
Conclusion: What Percentage Should Your Practice Expect?
In 2026, most healthcare practices can expect to pay between 4% and 8% of collections for professional medical billing services. Smaller or more complex practices may pay closer to 10%, while high-volume organizations often qualify for lower rates.
However, the key takeaway is this:
The lowest percentage doesn’t guarantee the highest revenue.
When evaluating a billing partner, focus on:
- Collection improvement
- Denial reduction
- Faster reimbursements
- Transparency and reporting
- Specialty expertise
If you’re unsure whether your current billing process is maximizing revenue, it may be time to evaluate your performance. A professional assessment from an experienced partner like 5 Star Billing Services can help identify revenue gaps, streamline operations, and turn your billing function into a growth driver.
Because in today’s healthcare environment, the right billing partner doesn’t just charge a percentage—they help you earn more.