Medical Billing Services NAICS 541219
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Industry Summary
The over 3,000 medical billing services firms in the US perform the billing and collection function on an outsourced basis for physician practices, hospitals, ambulatory surgery centers, and other healthcare providers. They submit claims for reimbursement for procedures performed to Medicare and Medicaid and private insurance companies. They typically earn revenue based on a percentage of the net collections they generate for the client.
Maintaining Privacy of Patient Data
Medical billing companies have direct civil and criminal liability for disclosure of personal health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA).
Increased Billing Complexity
Medicare billing codes (currently ICD-10) change periodically and all healthcare providers are required to comply in order to receive reimbursement for their services.
Recent Developments
Jan 5, 2026 - New Florida Law Targets Patient Overpayments
- A new Florida law requires medical facilities to issue refunds within 30 days if patients accidentally overpay their medical bills. Healthcare providers in the state must update billing, documentation, and refund procedures to ensure compliance with the new statutory timing and reporting requirements and to mitigate risk of enforcement action, according to MediPro. Duplicate payments, insurer post-payment adjustments that reduce the patient responsibility, incorrect copay calculations, and deposits that exceed the finalized bill all qualify as overpayments.
- Single-specialty medical groups averaged an 8% first-submission claim denial rate, according to the Medical Group Management Association's 2023 DataDive. Mitigation efforts have paid off for some practices, however. Practices experiencing reduced claim denials credited enhanced staff training for front desk workers and establishing a denials task force team dedicated to improving clinical documentation, eligibility verification, and authorizations. These practices also noted either hiring additional coding and billing staff or having their coders pursue new training and/or certifications as strong denial mitigators.
- The patient payment rate to hospitals decreased after the coronavirus pandemic, according to a study published in JAMA Health Forum. The mean repayment rate was approximately 54% from January 2018 through February 2020 for both privately insured and Medicare Advantage patients. The rate then started decreasing among both groups, the study found. The mean repayment rate for privately insured patients in 2023 was about 14.3% lower than in 2021. For those with Medicare Advantage, the rate decreased by almost 17%. Patients were also less likely to pay their hospital bills when they were higher. The repayment rate among the privately insured for bills over $1,000, for example, was generally under 35% versus about 50% for bills of about $100. Medicare Advantage enrollees tended to do the same, although the repayment rate was even lower for larger hospital bills.
- Medical billing services industry employment decreased slightly and average wages for nonsupervisory employees increased slightly during the first five months of 2025, according to the US Bureau of Labor Statistics (BLS). Medical billing services industry sales are forecast to decrease at a 0.15% compounded annual rate from 2025 to 2029, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
Industry Revenue
Medical Billing Services
Industry Structure
Industry size & Structure
The average medical billing service employs 40-50 workers and generates $1 million in annual revenue.
- The typical medical billing services company serves over 20 physician practice groups and more than 50 physicians, according to the Healthcare Billing and Management Association (HBMA).
- Medical billing services typically charge a fee of 3-10% of net collections.
- Medical billing services submit 40-45% of all claims submitted to government and private insurance payors.
- Larger medical billing services include ADP AdvanceMD, Kareo, Precision Practice Management, Medical Billing Star, and Premier Medical Billing.
Industry Forecast
Industry Forecast
Medical Billing Services Industry Growth
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