When healthcare practices consider outsourcing their billing services, one of the most important factors they evaluate is cost. Partnering with a medical billing company can bring numerous benefits—including improved collections, fewer claim denials, and more time to focus on patient care—but understanding how these services are priced is essential to make the right financial decision. In this article, we will explore the various pricing models offered by a medical billing company, the factors that influence pricing, and how Thrive Medical Billing provides transparent and flexible solutions that align with the needs of different medical practices.
Why Pricing Models Matter
Every healthcare practice is unique, and so are its financial goals. Some operate on thin margins and need cost-effective billing support, while others prioritize premium services for robust revenue cycle management. The pricing model you choose from a medical billing company should match your practice size, specialty, and revenue structure.
Choosing the wrong pricing model can lead to overspending or underutilization of services. On the other hand, understanding pricing models allows you to maximize ROI, streamline your billing operations, and ensure long-term financial sustainability. At Thrive Medical Billing, we emphasize education and transparency so our clients fully understand what they’re paying for and how it benefits their bottom line.
Percentage of Collections Model
The percentage-based model is one of the most common pricing structures used by a medical billing company. In this model, the billing company charges a fixed percentage—typically between 4% to 9%—of the total monthly collections.
Pros:
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Aligns the billing company’s performance with your revenue.
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You only pay for money that is successfully collected.
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Encourages the billing team to optimize collections and reduce denials.
Cons:
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Can become costly for high-revenue practices.
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May not be suitable for practices with a large number of low-value claims.
Thrive Medical Billing uses a performance-driven approach when offering the percentage-based model. This ensures our clients receive value for every dollar spent and encourages us to deliver maximum revenue recovery with accuracy and speed.
Flat Fee Model
Another pricing method used by some medical billing companies is the flat fee model. Under this structure, the provider pays a predetermined monthly fee, regardless of how much revenue is collected.
Pros:
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Predictable monthly costs.
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Easy to budget for small and mid-sized practices.
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Ideal for stable, low-volume practices.
Cons:
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No incentive for the billing company to boost performance.
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May result in higher costs during months with low collections.
For practices seeking predictability in their expenses, Thrive Medical Billing offers customizable flat-fee packages that include essential services, with optional add-ons for scalability. We ensure the scope of work matches the fixed cost to maintain fairness and efficiency.
Per-Claim Pricing Model
Under the per-claim pricing model, a medical billing company charges a fixed rate for every claim processed, regardless of its value. This model is typically used by smaller practices or those with a low volume of claims.
Pros:
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Cost is directly tied to the number of claims submitted.
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Easy to track and audit billing activity.
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Useful for practices testing outsourcing for the first time.
Cons:
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Doesn’t reflect claim value or complexity.
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May lead to higher total costs if many low-value claims are processed.
Thrive Medical Billing provides per-claim pricing for practices with specific needs, such as start-ups or small clinics. We ensure quality service regardless of volume and offer tools to track performance with complete transparency.
Hourly Rate Model
In some cases, a medical billing company may charge by the hour for specific services such as credentialing, auditing, or consulting. This model is less common for routine billing but useful for one-time or short-term projects.
Pros:
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Great for specialized or one-off tasks.
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Allows full control over hours worked and scope of service.
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No commitment beyond agreed hours.
Cons:
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Can become expensive if not monitored closely.
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Not suitable for long-term billing management.
At Thrive Medical Billing, hourly services are available for providers who need focused help on particular projects such as clearing backlogged claims or reviewing coding practices.
Hybrid Pricing Model
A hybrid pricing model combines two or more pricing strategies to create a balanced, tailored plan. For example, a medical billing company may charge a flat monthly rate for core services and a small percentage for collections above a certain threshold.
Pros:
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Flexibility to fit unique business models.
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Balances predictability with performance incentives.
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Scalable with practice growth.
Cons:
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Can be complex to manage without proper transparency.
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May require more detailed reporting and oversight.
Thrive Medical Billing specializes in creating hybrid models that offer the best of both worlds. We work closely with our clients to understand their workflow, budget, and goals to design pricing that adapts as their business grows.
Factors That Affect Pricing
Regardless of the model you choose, the pricing offered by a medical billing company will depend on several key factors:
Volume of Claims
Higher claim volume typically reduces the per-claim cost, as the workload is distributed more efficiently across resources.
Complexity of Specialties
Certain medical specialties such as cardiology or orthopedics require more advanced coding knowledge, which can increase service costs.
Denial and Rejection Rates
Practices with a high rate of denied claims may require additional work, increasing the time and cost needed for resolution.
Scope of Services
If you need full revenue cycle management—including coding, insurance verification, and patient collections—the cost will be higher than claims submission alone.
Software Integration
If the billing company must work with your existing EHR or billing software, integration or training time may impact pricing.
At Thrive Medical Billing, we conduct a detailed needs assessment before proposing pricing. This ensures no hidden costs and helps our clients plan their budget effectively.
What to Look for in a Billing Partner
When evaluating a medical billing company, don’t focus only on price. Look at the value provided. A cheaper company that misses deadlines or lacks follow-up can cost more in lost revenue than a higher-priced, professional partner.
Ask questions such as:
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What services are included in the quoted price?
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Are there additional charges for patient statements or denial management?
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What kind of reporting and analytics are included?
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Can the pricing model be adjusted as your practice grows?
Thrive Medical Billing stands out not just for fair pricing but for the quality of service, transparency, and measurable results. Our clients benefit from streamlined workflows, responsive support, and consistent collections improvements.
Making the Right Financial Decision
Ultimately, the right pricing model depends on your practice’s size, specialty, patient volume, and long-term goals. Conduct a cost-benefit analysis comparing your current in-house billing expenses versus the pricing proposals from outsourcing providers.
Consider both tangible (revenue, collections, time) and intangible (compliance, patient satisfaction, reporting) benefits. A well-structured partnership with a professional medical billing company like Thrive Medical Billing often results in higher profitability and peace of mind.
Conclusion
Understanding the pricing models of a medical billing company is critical for making an informed outsourcing decision. From percentage of collections to flat fees and hybrid models, each has its own advantages based on practice size and revenue cycle needs.
Thrive Medical Billing offers flexible and transparent pricing tailored to your goals, ensuring that you receive maximum value from your investment. With a focus on results, communication, and client satisfaction, we help healthcare providers take control of their billing process and unlock new financial potential.
If you’re exploring the possibility of outsourcing, start by evaluating your needs, learning the available pricing structures, and partnering with a team like Thrive Medical Billing that puts your success at the center of everything they do.
