Key takeaways
- Start with compliance: a BAA, real security controls, and honest answers about certifications.
- Specialty and payer-mix experience matters more than company size.
- Ask how they prevent denials, not just how many claims they submit.
- Insist on reporting you can verify and data you own.
- Read the contract: term, termination, transition, and what the fee actually applies to.
Before you compare vendors, know your baseline
You can’t judge a billing company’s results without your own starting numbers. Pull 6–12 months of days in AR, percentage of AR over 90 days, initial denial rate, top denial reasons, and net collection rate. If you don’t have them, that is itself a finding — and a diagnostic billing audit is a fast way to get them. See how to read an AR aging report for the formulas.
12 questions to ask a medical billing company
- Will you sign a Business Associate Agreement before we share any PHI? The answer must be yes, without hesitation.
- Which specialties and payers do you bill for today? Look for experience with your codes, modifiers, and authorization rules — and with your major payers, including your state’s Medicaid managed care plans.
- How do you prevent denials, not just work them? Look for root-cause categorization, payer-specific edits, and feedback into eligibility, authorization, and coding.
- What will you report, and how often? Expect monthly KPIs at minimum: days in AR, aging buckets, denial rate and top reasons, net collection rate, and payer-level trends.
- Will we keep direct access to our systems and data? You should own your data and see claim-level detail at any time.
- Who is accountable for our account? Get a named point of contact and a clear escalation path.
- Who does the work, and where? Ask whether staff are employees or subcontractors, where they are located, and how any offshore access to PHI is controlled.
- What security controls protect our data? MFA, role-based access, encryption, audit logging, and background-checked staff. Ask whether security claims are third-party certified or internally aligned to a framework — both can be legitimate, but they are not the same thing.
- How do you handle the transition? Who works existing AR, and what happens to claims in flight at cutover?
- How is pricing calculated? Percentage of collections, per claim, flat monthly, or hybrid — and exactly which revenue the fee applies to.
- What are the contract terms? Initial term, auto-renewal, termination notice, and what happens to your data and open AR when the contract ends.
- Can we start with a diagnostic review? A partner confident in its process will show you what it finds before asking for a long-term commitment.
Red flags when evaluating billing companies
- Guaranteed collection increases or denial rates before they have seen your data
- Reluctance to sign a BAA, or requests for PHI before one is signed
- Vague answers about who does the work and where
- No direct access to your own data, or reports you cannot reconcile to your PM system
- Long auto-renewing contracts with steep termination penalties
- Claims of “certification” they cannot document
How do medical billing companies charge?
| Model | How it works | What to watch for |
|---|---|---|
| Percentage of collections | Fee is a percentage of what is collected | Which collections are included; incentive to chase only high-value claims |
| Per-claim fee | Fixed fee per claim submitted | Charges for resubmissions; weak incentive to work denials |
| Flat monthly fee | Fixed fee regardless of volume | Scope limits and what happens as volume grows |
| Hybrid or dedicated staff | Base fee plus a variable component, or dedicated team members | Exactly what the base fee covers |
Compare vendors on total cost against expected collections, not on the headline rate alone.
How LRx Healthcare answers these questions
LRx Healthcare is a HIPAA-focused U.S. medical billing and revenue cycle management company serving providers and pharmacies in all 50 states. We sign a BAA before any PHI is exchanged; operate controls aligned to SOC 2 and SOC 3 Trust Services Criteria (aligned, not third-party certified); provide named points of contact, documented SLAs, and monthly KPI reporting; and work inside your existing practice management and EHR systems. We don’t publish a rate card — pricing is based on your volume, specialty, payer mix, and scope.
Start with a free billing audit or book a consultation to see how we would approach your revenue cycle.
This guide is general information about healthcare billing operations, not legal, tax, or compliance advice. Payer rules and regulations change — confirm current requirements with the payer or a qualified advisor.