Medical Billing Services NAICS 541219
Unlock access to the full platform with more than 900 industry reports and local economic insights.
Get access to this Industry Profile including 18+ chapters and more than 50 pages of industry research.
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
Sep 5, 2025 - Patient Payment Rate Of US Hospital Bills Decreases
- 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.
- 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
Vertical IQ Industry Report
For anyone actively digging deeper into a specific industry.
50+ pages of timely industry insights
18+ chapters
PDF delivered to your inbox
