Medical Billing Services NAICS 541219

        Medical Billing Services

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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

Jul 5, 2025 - US Senate Ignores Request To Change Medicare Fee Schedule
  • Federal legislators ignored a request by a group of medical societies and physician groups to change the Senate proposal for the 2026 Medicare Physician Fee Schedule to match one that was passed in the US House of Representatives version of the One Big Beautiful Bill reconciliation legislation. The 75 groups and societies said that the Medicare Payment provision in the House-passed One Big Beautiful Bill represents a "critical step" toward stabilizing the Medicare Physician Fee Schedule. The Senate passed its version of the reconciliation legislation on July 1 without adjusting its 2026 Medicare Physician Fee Schedule proposal. The legislation signed into law by President Trump included the unmodified Senate proposal which, like the US House version, contains a one-year 2.5% increase in the Medicare Physician Fee Schedule conversion factor for 2026. Medicare physician payments have decreased 33% since 2001 when adjusted for inflation, according to Healthcare Finance, with visible consequences, including the loss of independent physicians and practices in rural areas. The Senate version of the bill also includes steeper cuts to Medicaid than the projected $715 billion in the House version of the bill that passed in May.
  • Dentistry, podiatry, and chiropractic are among the most likely specialties to partner with medical credit cards for patient collections, according to a study published in JAMA Health Forum. More than 180,000 practice locations have contracted with financial institutions to offer medical credit cards, the study found. Of those practices, 67% were dentistry, 45.7% were podiatry, 29.7% were chiropractic, 25.5% were physical medicine and rehabilitation, and 20.5% were dermatology. Medical credit card use was also common for pharmacy (18.3%) and imaging and radiology (14.0%), but less common for orthopedic surgery (8.7%).
  • An application that integrates AI may help increase the efficiency of medical billing, according to the Boston Globe. Medical billing services may be negatively impacted, as the software is intended to allow health care providers to complete more billing processes in house by using AI to complete billing forms. The two Brown University students who developed the software and launched a startup to sell it were inspired by the discovery that human-driven medical billing causes lost revenue and delayed income. "We think that there are a lot of repetitive tasks that doctors don’t want to do, and they shouldn’t need to do. We can do them faster and more accurately than what the current processes entail,” said company co-founder Jay Gopal.
  • Medical billing services industry employment 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
                                Source: Vertical IQ and Inforum

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