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
Jul 2, 2026 - States Pass Medical Debt Relief Legislation
- At least six states have approved measures related to patient medical debt in 2026, according to a report on legislative policy trends released by United States of Care. About 46% of adults, regardless of their health care insurance status, reported struggling to pay for medical care last year, according to the Urban Institute. Indiana, Louisiana, Maine, Oregon and Washington enacted laws this year related to medical debt. Hawaii legislators have approved a measure that is awaiting the governor’s signature, and other states have bills in committee. Legislators in 18 states have introduced or approved measures related to preserving no-cost preventive care, and a dozen states weighed legislation related to hospital facility fees.
- About 41% of US adults currently have some type of debt due to medical or dental bills from their own or someone else’s care, according to health policy research firm KFF. Medical billing services may be negatively impacted, as they typically charge 3-10% of net collections for their services. About a quarter of adults (24%) say they have medical or dental bills that are past due or that they are unable to pay, and one in five (21%) who have bills they are paying off over time directly to a provider. One in six (17%) report debt owed to a bank, collection agency, or other lender from loans taken out to pay for medical or dental bills, while similar shares say they have health care debt from bills they put on a credit card and are paying off over time (17%). One in ten report debt owed to a family member or friend from money they borrowed to pay off medical or dental bills. About half of U.S. adults say they would not be able to pay an unexpected medical bill that came to $500 out of pocket.
- 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.
- Medical billing services industry employment increased slightly and average wages for nonsupervisory employees decreased slightly during the first two months of 2026, according to the US Bureau of Labor Statistics (BLS). Medical billing services industry sales are forecast to increase at a 3.7% compounded annual rate from 2026 to 2030, 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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