Medical billing is an essential part of running a medical practice. It involves the process of submitting and following up on claims with health insurance companies to receive payment for services rendered. However, medical billing can be a time-consuming and complex process, which is why many medical practices outsource their billing services to specialized companies. In this blog post, we will discuss the average cost of medical billing services in the USA for small to medium practices and solo practices.
Average Cost of Medical Billing Services for Small to Medium Practices:
Small to medium medical practices typically have fewer than 100 employees and generate less than $10 million in revenue per year. These practices often outsource their billing services to third-party companies to reduce administrative costs and improve their revenue cycle management. The cost of medical billing services for small to medium practices can vary depending on the size of the practice and the complexity of their billing needs.
According to a survey by the Medical Group Management Association (MGMA), the average cost of medical billing services for small to medium practices is around 8% of their total collections. This means that for a practice that generates $1 million in revenue per year, the average cost of medical billing services would be around $80,000. However, the cost can range from 4% to 12% of total collections depending on various factors such as the specialty of the practice, the number of claims submitted, and the billing company’s pricing model.
Specialty of the Practice:
The specialty of the practice can significantly impact the cost of medical billing services. Practices that offer complex and highly specialized services such as oncology or neurology may require more extensive billing services, resulting in higher costs. This is because these practices often deal with more complex billing codes and require specialized knowledge and expertise to properly submit claims to insurance companies.
Number of Claims Submitted:
The number of claims submitted by a practice can also impact the cost of medical billing services. Practices that submit a high volume of claims will require more extensive billing services, resulting in higher costs. Conversely, practices that submit a lower volume of claims may be able to negotiate lower pricing with billing companies.
Billing Company Pricing Model:
Billing companies typically offer two pricing models: a percentage of collections or a flat fee. The percentage of collections model is the most common and is calculated as a percentage of the total amount collected by the practice. The flat fee model is a fixed fee charged by the billing company per claim. The pricing model can impact the cost of medical billing services, with the percentage of collections model typically resulting in higher costs.
Average Cost of Medical Billing Services for Solo Practices:
Solo practices are typically run by a single physician and generate less than $500,000 in revenue per year. These practices often have limited resources and may not have the capacity to handle their billing services in-house. As a result, many solo practices outsource their billing services to third-party companies.
According to a survey by the American Medical Association (AMA), the average cost of medical billing services for solo practices is around 10.9% of their total collections. This means that for a practice that generates $200,000 in revenue per year, the average cost of medical billing services would be around $21,800. However, like small to medium practices, the cost can range from 4% to 12% of total collections depending on various factors such as the specialty of the practice, the number of claims submitted, and the billing company’s pricing model.
Conclusion:
In conclusion, the average cost of medical billing services for small to medium practices and solo practices can vary depending on several factors. Small to medium practices typically pay around 8% of their total collections for medical billing services, while solo practices typically pay around 10% of the revenue. The cost of medical billing can vary depending on several factors, including the size of the practice, the complexity of the billing process, and the insurance contracts. As such, it is essential for small to medium-sized medical practices to evaluate their options and select a medical billing solution that meets their needs and budget.
Outsourcing medical billing services can give various advantages to healthcare providers, including better revenue cycle management, less administrative burden, and a greater focus on patient care.
We take pride in offering high-quality medical billing services to healthcare professionals in Houston, TX and abroad at RhinoMDs billing services. We are offering medical billing services as low as 2.99%. It will help practices save a lot of dollars and time to focus more on its patients. Our skilled staff is committed to assisting you in optimizing your revenue cycle management and improving financial performance.
