Here is how healthcare is looking in 2025 from a broad angle:
| 2025 is the 5th consecutive year of Medicare payment cuts for physicians. After inflation adjustments, Medicare payments for physicians are 33% less than in 2001, according to the American Medical Association (AMA). |
| Besides pay cuts, the CMS (Center for Medicare and Medicaid Services) also projected a 3.5% rise in the costs of running medical practices. |
All this means there’s less money to provide services and more costs to adjust in balance sheets. Pair that with claim denials because of system hurdles, and imagine the burden on providers. That’s partly why 36% of medical groups want to outsource or automate their billing cycles for better revenue management.
However, relying on a third-party medical biller should be a deliberate decision because of the stakes involved. Therefore, this guide explains options for outsourcing medical billers and their pricing models so doctors can decide how to offload this burden at justified prices.
The Stress of Medical Billing
Medical billing is stressful because of the sheer volume and administrative work it demands. Here are some non-negotiables for a provider regarding billing:
- Every code must be correct
- The claim should be checked against payer rules
- Bills should be forwarded timely
- New insurance policies should be abided by
- There should be compliance with the new payment software updates
But despite checking these aspects, claim rejections are common. They set off a chain of resubmissions and back-and-forth paperwork that can drag on for weeks.
Here are some aspects of medical revenue cycle management that eat away at doctors’ and practice managers’ resources the most:
Increasing Denials
According to the Medical Group Management Association, 60% of medical groups reported higher claim denials in FY 2024. These denials stem from failure to follow coding rules and payment limitations set by the payers. However, practices that experienced reduced claims note that training their staff on denial management or a dedicated denial task force improved their numbers.
Prior Authorization Burden
Prior authorization is arguably the main hurdle in insurance payments. When a patient needs care, the staff have to cross-check their insurance details before proceeding. The problem is so grave that doctors and staff spend almost 14 hours each week to handle these approvals, as per the American College of Physicians (ACP).
| Prior authorization means a doctor must get approval from the insurance company before treating a patient. Whether that’s a test, procedure, or medication, to make sure it will be covered |
Options for Doctors Looking to Outsource Billing to Medical Billers
How a doctor outsources billing depends on their practice size, specialty, and how much control they want to keep versus the cost they’re willing to absorb. For example, a solo physician’s office won’t have the same billing volume/complexity as a multi-specialty clinic. Similarly, a practice handling complex procedures (like surgeries and implants) inarguably demands more precision in medical billing than one for routine healthcare.
Therefore, doctors have multiple options to outsource medical billers, such as:
Full-Service Billing Companies
A full-service medical billing partner runs your end-to-end revenue cycle. Here are the things it takes care of (usually):
When a doctor outsources all billing services to a company, the two parties agree on KPIs like the net collection rate should be more than or equal to 95%, A/R should be less than 90 days, and so on.
Therefore, they register your practice with payers and set up billing software so claims go out and remittance info comes back electronically. The billing company also provides denial root-cause reviews to fix issues in eligibility rules and documentation gaps.
A full-service billing company suits clinics facing rising denials or if their growth outpaces the current staff. Since the company also manages the patient billing side, statements, inbound calls, and payment plans are not the provider’s headache anymore.
Specialty-Focused Billers
Some medical billers offer niche expertise for certain specialities like cardiology, ortho, etc, to ensure billing nuances specific to those specialities are correctly handled. These billers understand the fine details of coding, coverage, and medical necessity requirements better. So outsourcing focused billers makes sense as errors in coding can cost practices thousands.
For example, when a cardiologist bills for a procedure that uses devices (like pacemakers or stents), each of these has device add-on codes that must be billed carefully. So if a doctor bills for angioplasty and stent placement, insurance may consider them one procedure (as a stent follows angioplasty).
Consequently, instead of paying for two, they might pay only the higher-value one. And if the biller who doesn’t clearly understand these rules codes them separately (to get paid twice), the insurer might deny the whole claim or pay less.
That’s when you need the services of speciality-focused medical billers who know what to code and move forward. These services best fit clinics in specialities where payer rules change constantly and one misstep can result in revenue loss.
Hybrid or Partial Services
In a hybrid or partial outsourcing, you split your medical practice’s revenue cycle. You may keep coding in-house (since it’s closely tied to physician documentation), but outsource claim submission, denial follow-up, and A/R, etc, to reduce the paperwork you have to deal with. But some practices go in the other direction; they outsource prior authorization and eligibility checks but keep claim submission in-house to better track the progress.
Following a partial model gives you flexibility, and you retain control where it matters most, along with freeing up staff from repetitive tasks. Practices that want to reduce staff load but aren’t ready to fully outsource benefit from this model the most. Also effective for larger groups that want to scale gradually. Also, if you haven’t outsourced medical billers before, trying a hybrid arrangement will clear the picture before you go all-in.
Freelance Medical Billers
Freelance medical billers are professionals who contract directly with your practice. They may handle the full cycle or specific tasks, depending on your practice’s size and claim volume. You can outsource coding audits, prior authorization overflow, or A/R clean-up to these freelancers and not worry about an in-house team.
Freelance billers charge hourly, per-claim, or on a retainer basis and help smaller practices or bridge gaps in their staffing needs. However, unlike big billing firms, these individuals don’t have backup staff, so they’re a single point of failure if they’re unavailable. You’ll also need to manage oversight and make sure they sign a BAA, which is a legal requirement under HIPAA.
Since billers handle patient health information, a signed BAA means they’ll protect it and follow HIPAA rules. These billers should also be CPC (certified professional coder) and CPB (certified professional biller) certified, demonstrating their understanding of medical billing and compliance rules.
Hiring people on a freelance/contract basis is a smart move for small clinics that don’t have heavy billing needs because the cost is lower than that of a full-time staff member.
Pricing Models & Packages for Outsourcing Medical Billers
As a doctor looking to outsource medical billers, you’ll notice that billing companies don’t all charge the same way. Their pricing model will likely depend on your practice’s specifics (size, speciality, services needed, etc.), and understanding it upfront can save you from unexpected costs.
Here are the standard pricing models medical billers follow:
Percentage of Collections
Charging a % of what the medical biller collects for you is the most widely used model. The billing company takes mostly 4% to 9% of monthly collections. For example, if your practice collects $100,000 in a month and your rate is 6%, the billing company gets $6,000.
BILNOW offers 3.31% of the Collections | 99% First-Pass Claim Acceptance
Flat Monthly Fee
Some companies charge a flat fee instead of a percentage, although it’s rare and mostly small practices go this route. For example, a solo provider may pay $1,000–$1,500 per month regardless of collections, so it works best for very small practices with predictable claim volume.
Per-Claim Fee
If your medical biller asks to charge a per-claim fee, you’ll pay an amount for each claim (like $3–$6). While it’s less common for full-service billing, it makes sense if you only outsource part of the work, like claim submissions or coding support.
Custom Packages
Some practices don’t need full-service billing. Instead, they buy bundled packages like credentialing + billing setup, or denial management + reporting. For a bundled package, the pricing can be a flat add-on fee, an hourly rate, or a hybrid, depending on the services used.
Final Thoughts
Being part of a broad network means compliance is non-negotiable and believing that there can be hurdles at every step. When a doctor or practice manager tries to manage the whole billing process, it means added pressure and lost time that could be better spent elsewhere.
That’s why BilNow makes medical billing and revenue management effortless for providers who have multiple other responsibilities. Here, coding experts and billing consultants will help remove bumps and pits from your revenue cycle to ensure smooth cash flow and timely payouts.
Get in touch with us and watch an up to 25% increase in your revenue within 3 months and 99% first-pass claim acceptance!
FAQs
What happens if a patient calls my office with a billing question? Do they talk to us or the billers?
Patients are directed to the billing company as they handle questions, send statements, and set up payment plans. The healthcare facility’s staff isn’t tied up with billing calls.
Will I still see what’s happening with my claims?
You get regular reports about claims, denials, collections, and A/R, so you always know where things stand.
How do you keep my patient data secure?
All data is handled under HIPAA rules with encrypted systems and signed Business Associate Agreements (BAAs). We keep patient information protected and private.
