Medical Billing Service Pricing Structure: Percentage vs. Flat Fee

As medical units are getting more patients through insurance facilities, the pursuance of bill payments is becoming an arduous process, especially when the medical practices do not have a proper medical billing service to take care of the matters.

Not many medical practices have the staff to pursue bill payments, and that is where the services of a medical billing company become a necessity.

Medical billing professionals are trained in the art of getting proper payment from insurance companies for claims made by the medical practices, but they are too talented to turn down their profitability. And exactly that is why a physician looking to hire a medical billing services company should know about the types of pricing structures they have.

Two of the most used pricing structures of these billing services are:

–    Percentage pricing structure

–    Flat fee pricing structure

Let’s discuss both in detail with examples.

  1. Percentage pricing structure:

In summary, percentage pricing structure means that the cost of the medical service for submitting a claim is made in the percentage of the total value of that claim.

The percentage pricing structure is not that simple though. It varies and has further division. Let’s discuss them.

–    Percentage of the claim submitted

In this pricing structure, the fees are the proportion of each claim submitted. To explain it better, let’s take an example of a claim of $300. The fee percentage of medical billing service is 10%. So, at the submission of the claim, the medical service will take $30 from the medical practice. But as this service is only for claim submission, the medical billing service will not follow the claim processing.

–    Percentage of the total claims submitted in a period

The fee structure for the percentage of the total claims submitted during a period means the fee will be the percentage of the total amount submitted. In simple terms, if the above percentage is applied and let’s say ten claims were submitted in a month. The total sum will be the value of the total claims, which in this case will be $300.

–    Percentage of collection

Percentage of the collection is mostly preferred by the medical practices because it includes submission and follow-up of the payment. The medical billing service is only paid once the amount is collected from the insurance company.

To explain it better, let’s say that the medical practice claim was of $50. But after negotiations, the insurance company only paid $45. As the cost of claim submission is only 10%, the fees will be $4.5 for the medical billing service.

Flat-fee pricing structure

The second pricing structure in our list is the flat-fee pricing structure. This one is pretty simple to explain, as we all know what a flat-fee pricing structure is.

For every claim submitted, the medical billing service would charge a flat fee of a certain amount. It means the flat-fee pricing will remain the same no matter what the amount is.

If the claim amount is $30, and the flat-fee is $4, the medical practice will pay $4 for submitting the claim. A problem with the flat-fee pricing structure is that it can sometimes be unprofitable. For example, if the claim amount was $3000 and the flat-fee was only $4, so instead of earning a better bargain through percentage pricing, the company will only receive $4 on it.

Hybrid Pricing Structure

As there are flaws in both above pricing structures, a new pricing structure was made by merging both of the above. This hybrid pricing structure is used to make both the medical billing service and the medical practice profitable, but it depends on the medical practice as to which type of payment mode it selects.


There we have it, all the medical billing pricing structures explained. Now, as a medical practice unit, you should go through the medical billing service’s pricing structure to determine if it will suit your needs, before hiring one.

May Capobianco