Medical billing pricing

Outside New York, the fee is a percentage of net collections. New York practices pay a flat monthly or per-claim rate. There is no setup fee, the agreement is month to month, and the written rate follows volume, specialty, and how much of the cycle you hand over.

A billing review of charges and payments

How much medical billing companies charge in 2026

Most US billing companies charge between 4% and 8% of collections. The best public data is a survey of the companies themselves.

Percentage of collections charged	Share of billing companies
4.99% or less	12%
5% to 5.99%	19%
6% to 6.99%	16%
7% to 7.99%	16%
8% to 8.99%	5%
10% or more	4%
Not a percentage model	28%

Source: Tebra 2026 Medical Billing Benchmark Report, a survey of 190 US medical billing companies fielded December 1–17, 2025.

How to read the survey

63% of the companies surveyed charge 7.99% or less. The share using a flat or per-claim model rose to 28%, up from 17% in 2023. Setup fees are becoming common: only 19% of the companies said they charge none.

The survey counts billing companies, not practices, and it does not split rates by specialty or practice size. A 5% quote for claim submission only and an 8% quote that includes denials, A/R follow-up, and patient statements are not the same price. Compare quotes written against the same scope.

Percentage, per-claim, and flat monthly fees

Three ways billing companies price the same work, and who each one fits.

Percentage of collections

A share of what is actually collected each month. The fee rises and falls with revenue, so a slow month costs less. Ask whether the base is net collections or gross charges, and whether patient payments are included. Vector uses this model outside New York.

Per claim

A fixed amount for each claim submitted. Easy to forecast for high-volume, low-dollar work such as labs or therapy visits. The risk is that a vendor paid per submission earns the same whether a hard denial is appealed or dropped, so the agreement should name who works denials.

Flat monthly

One fee for a defined scope and volume. Predictable for a stable practice. Check what happens when volume grows past the agreed range, and what the fee covers when a payer changes its rules. New York practices are priced this way or per claim.

Why New York is priced differently

New York rules do not allow a billing fee tied to a practice’s collections.

New York fee-splitting rule

The Board of Regents rule at 8 NYCRR 29.1(b)(4) treats an arrangement where payment for personnel services is a percentage of a licensee’s practice income as unprofessional conduct. New York courts have applied it to percentage-based billing contracts. Vector’s office is in Jamaica, Queens, so New York practices get a flat monthly or per-claim rate.

New York Medicaid

New York Medicaid rule 18 NYCRR 504.9 requires a billing service’s pay to be related to the cost of processing claims, not to the amount billed or collected. Billing services that submit New York Medicaid claims also enroll with the program.

Medicare has its own rule. Under 42 CFR 424.73, a billing agent that receives Medicare payments cannot be paid a percentage of what is billed or collected. CMS does not apply that limit when the agent only prepares the claims and does not receive or negotiate the payments. With Vector, payments go to the practice’s own account.

What “net collections” means

The base of the percentage matters as much as the rate.

The definition

Net collections are the payments actually received on the claims in scope, after refunds and payer takebacks. They are not gross charges, and they are not the amounts on a fee schedule. A billing company paid on gross charges earns more when charges are set high, whether or not anything is paid.

A worked example

A practice receives $50,000 in a month and refunds $1,000 in overpayments. Net collections are $49,000. At an example rate of 6%, the fee is $2,940. The same 6% on $90,000 of gross charges would be $5,400. The example rate is illustration, not a quote.

What sets your written rate

Three facts from the practice, read in the free audit.

Volume

Claim volume is the first look. A solo practice and a multi-site group do not produce the same amount of work, so the written rate is not copied from one to the other.

Specialty

Specialty changes the coding. Primary care is not orthopedic surgery, and behavioral health is not DME. Authorizations, timed units, and global periods change the work per claim.

How much of the cycle

Some practices hand over the full cycle. Some keep coding, or statements, in the office. The agreement names the slice, and a smaller slice is not billed as a full-cycle rate.

There is no setup fee on the monthly cycle and no cancellation fee. Either side can end the agreement with 30 days’ written notice; see the terms. A free audit is the step that produces the written rate: request it here.

What the monthly fee covers

When the full cycle is in the agreement, these are the parts. Each has its own service page.

Eligibility and coding

Coverage is checked before the claim is built. Coding follows the note. Charge entry sits with that work, not on a second invoice.

Claims and posting

Claims go out, payments and denials post back, and the balance is the one the practice can see. Medical billing is that loop.

Denials and A/R

Denials are worked and aged claims are followed. Patient statements are the patient-balance side of the same cycle.

Priced separately, in writing: credentialing, retrospective coding audits, old A/R recovery, underpayment recovery, MIPS reporting, HIPAA risk analysis, transcription, and out-of-network and IDR work.

Questions to ask any billing company before you sign

The rate is one line. These decide what the contract really costs.

Fees

Is the fee on net collections, gross charges, or per claim?
Are patient payments and old balances inside the fee base?
Is there a setup, minimum monthly, or cancellation fee?
Which services cost extra: credentialing, statements, old A/R, reporting?

Leaving

How much notice ends the contract, and is there an auto-renewal?
Who works claims already in flight when the contract ends?
Who owns the data, and in what format is it handed back?
Does the company work in your system or move you onto its own?

More on comparing vendors: how to choose a medical billing company.

Pricing questions

How much do medical billing companies charge?

Most charge between 4% and 8% of collections. In Tebra’s 2026 survey of 190 US billing companies, 63% charge 7.99% or less, and 28% use a flat or per-claim model instead of a percentage.

What does Vector Medical Billing charge?

Outside New York, a percentage of net collections. New York practices pay a flat monthly or per-claim rate. The written rate comes after the free audit, based on volume, specialty, and how much of the cycle you hand over. There is no setup fee.

Why don’t New York practices pay a percentage?

New York’s fee-splitting rule, 8 NYCRR 29.1(b)(4), and its Medicaid rule for billing services, 18 NYCRR 504.9, do not allow a billing fee tied to what a practice bills or collects. New York practices get a flat monthly or per-claim rate instead.

Is the agreement a long contract?

No. The agreement is month to month, and either side can end it with 30 days’ written notice. If you leave, the open accounts receivable and the reports go with you.

Does the state change the price?

Only in how New York is priced. Elsewhere, the state is not a surcharge. Medicaid and Medicare rules change by state, and the specialty and payer mix shape the written rate more than the address does.

How does this compare with hiring a biller?

A skilled US biller earns about $42,000 to $65,000. Fully loaded, with payroll tax, benefits, software, and training, that is about $58,000 to $80,000 a year, paid whether the month was busy or not. An outsourced fee follows the work the account actually produces.