Medical Billing Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
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.
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
Medical Billing Services Industry Growth
Recent Developments
Mar 18, 2024 - Firms Increase Prices
- Medical billing firms moderately raised their prices during 2023, according to the US Bureau of Labor Statistics (BLS). Both employment and wages for nonsupervisory employees increased moderately during 2023, according to the BLS.
- A cyberattack on a subsidiary of UnitedHealth Group, the largest healthcare company in the world by revenue, led to major outages in healthcare billing services across the US, according to company officials. UnitedHealth Group said in late February that its subsidiary Optum was forced to shut down IT systems and various services after a cyberattack by “nation-state” hackers on the company’s Change Healthcare platform, which is the largest payment exchange platform between doctors, pharmacies, healthcare providers, and patients in the US healthcare system. Full functionality had not been restored by March 2. The American Hospital Association issued a warning on February 22 recommending that all healthcare organizations that rely on Optum solutions disconnect their systems immediately to protect their partners' and patients' data.
- Nearly half of American adults (46%) faced a problem with a medical bill in the last year, and almost half with low or average incomes (46%) skipped or delayed needed care because of price, according to the Commonwealth Fund 2023 International Health Policy Survey. While all nations surveyed had disparities in healthcare access between income levels, those disparities were most pronounced in the US. About 18% of US GDP goes to healthcare spending, the highest in the world.
- Many patient calls and messages to physicians now count as a “visit” that can charged for. Billing for both synchronous telehealth and asynchronous telehealth (emails and other online messages) has been allowed for most providers since March 2020, according to A Jay Holmgren, an assistant professor at UC San Francisco who researches asynchronous messaging. Patients quickly became adept at using online portals to reach their doctors at the start of the coronavirus pandemic. This higher volume of online messaging didn't decrease when in-person visits resumed. One explanation for billing for messages, according to Holmgren, is that health systems recognize the time spent responding as work so they ensure that physicians can answer queries without working outside of their hours, reducing their patient load, or taking a pay cut. Billing for messaging can function as self-accountability, he added.
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