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My first year managing a small orthopedic clinic’s billing, I thought a good billing service meant someone who submitted claims on time. I signed a contract, handed over our revenue cycle, and watched AR days balloon past 60 while denial rates crept toward 18%. When I finally dug into the contract, I found we were paying 8.5% — plus $1.50 per patient statement, $15 per denial resubmission, and a $1,200 termination fee if we bailed early. The company was technically “billing” us. They were just not very good at it.
The right questions, asked before you sign anything, would have saved us months of pain.
The Short Version:Most billing services can submit clean claims. The difference between average and excellent comes down to denial recovery, specialty experience, and transparent pricing. Ask these 15 questions, get answers in writing, and you’ll know which category you’re dealing with before you hand over your revenue cycle.
Key Takeaways:
- Medical billing errors average 10-20% without specialized services, costing U.S. providers $125 billion annually in claim denials
- Practices that outsource billing report 10-15% higher collection rates and AR under 30 days vs. 45+ days in-house
- A legitimate billing service charges 4-10% of collected charges — if they’re over 10%, ask hard questions
- Always request sample reports and references from practices in your specific specialty before signing
Before you start the list, read The Complete Guide to Medical Billing Services — it covers the full RCM landscape. These 15 questions are the filter you run once you’re evaluating specific vendors.
The 15 Questions
1. What percentage of claims do you submit clean on the first pass?
The industry benchmark is above 95%. Anything below that means you’re hemorrhaging cash on rework and resubmissions. A good answer includes a specific number backed by their own reporting, not a vague “we have high accuracy.”
2. What is your average denial rate — and what’s your resubmission protocol?
Target: under 5% denial rate. More importantly, ask what happens after a denial — good services have a formal appeals workflow with documented timelines. If they shrug at the follow-up question, walk.
3. What are your average days in accounts receivable?
The benchmark for outsourced billing is under 30 days. In-house billing typically runs 45+ days. If a vendor can’t give you a current AR aging figure from an existing client, that’s a red flag.
Reality Check:Some billing services advertise fast AR days but quietly exclude claims over 90 days from their follow-up scope. Ask explicitly whether they work aging buckets beyond 90 days — the answer separates full-service vendors from claim submitters.
4. What certifications do your coders and billers hold?
Look for CPC (Certified Professional Coder) and CPB (Certified Professional Biller) credentials at minimum. Ask about ongoing training in ICD-10, CPT, and HCPCS updates. Affiliations with HBMA or AMBA indicate the company takes professional standards seriously.
5. Do you have experience in my specific specialty?
Orthopedics, behavioral health, and cardiology have completely different coding logic. A general biller who mostly handles primary care will miss specialty-specific modifiers and reimbursement nuances. Ask for references from practices in your specialty, not just their happiest clients.
6. Exactly how is your fee calculated — and what are all the additional charges?
Standard rates run 4-10% of collected charges. But the percentage is only part of the story. Ask about:
| Fee Type | Typical Range |
|---|---|
| Setup / onboarding | $500–$2,000 |
| Termination | $1,000+ |
| Data conversion | $300–$1,000 |
| Patient statements | $1–$2 per statement |
| Denial resubmissions | $10–$25 per claim |
| Credentialing (per provider) | $50–$150 |
Get the full fee schedule in writing before you negotiate anything.
7. Do you handle low-ticket claims and patient billing, or only commercial payers?
Some discount-rate services quietly exclude claims under a threshold, skip patient statement follow-up, or ignore self-pay balances. That’s not full revenue cycle management — it’s cherry-picking the easy claims and leaving money on the table.
Pro Tip:Ask the vendor to show you a sample of a complex denial case and walk you through exactly what they did. Competent billers will have a specific story. Weak ones will give you a process description that sounds good but isn’t tied to a real outcome.
8. What does your HIPAA compliance program look like?
They should be prepared to sign a Business Associate Agreement (BAA) immediately. Ask about encrypted data transmission, PHI destruction protocols (including hard drive wiping for decommissioned hardware), and their breach notification process. If they seem surprised by any of these questions, stop the conversation.
9. What EHR and practice management systems do you support?
Billing service integration with your existing PM system determines how much manual data re-entry your staff does. Ask whether they have a real-time portal, how data syncs, and what happens if you switch systems down the road.
10. What reporting do you provide — and how often?
You should receive at minimum: weekly or monthly collections reports, AR aging by payer, denial reasons broken down by code, and net collection ratio. Ask to see a sample report before you sign. If it’s vague or hard to interpret, your revenue cycle visibility will be equally murky.
11. Can I have real-time access to my billing data?
A good service gives you dashboard access, not just monthly PDFs. You should be able to pull an AR aging report at 10pm on a Tuesday if you want to. If access is gated or delayed, you’re flying blind on your own practice’s cash flow.
12. How do you handle payer credentialing?
Credentialing is often the long pole in the tent when onboarding a new provider or adding a payer. Ask whether credentialing is included, how much it costs ($50-$150 per provider is standard), and what their typical timeline looks like. Dropped credentialing means unpaid claims.
13. What are your contract terms — and what does it cost to leave?
Termination fees over $1,000 and notice periods longer than 60 days are worth negotiating hard on. You want the ability to exit cleanly if performance slips. Ask specifically what triggers the termination fee and whether performance-based exit clauses are available.
14. Can you provide three references from practices similar to mine in size and specialty?
Not testimonials on their website. Actual names of practice managers you can call. A vendor with nothing to hide will have clients ready to talk. Ask those references specifically about denial rates, AR days, and how problems were handled — not just general satisfaction.
15. What does the first 90 days look like — and how do you measure a successful transition?
The transition period is where billing relationships break down. Ask for a written onboarding plan with milestones: when the first claims go out, who manages your legacy AR, and what metrics they’ll use to benchmark success at 30, 60, and 90 days. Vague answers here mean vague accountability later.
Practical Bottom Line
Print these 15 questions and use them as a scorecard. A billing service that hedges on certifications, can’t show sample reports, won’t give references, or surprises you with fees isn’t ready for your revenue cycle — no matter how polished their sales deck looks.
The right service will be able to answer every question without hesitation and will welcome the scrutiny. That confidence is the tell.
Once you’ve narrowed to two or three finalists, ask each one to audit three months of your current billing data and tell you where you’re leaving money. The quality of that analysis will tell you more than any sales call.
Looking for more guidance on evaluating your options? The Complete Guide to Medical Billing Services covers how to structure your RCM from the ground up.
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Nick built this directory to help practice managers find credentialed medical billing services without wading through generalist agencies that lack healthcare-specific expertise — a frustration he ran into when evaluating RCM vendors for a specialty clinic and couldn’t find an unbiased, credential-verified source.