Medical Billing Pricing Calculator: Percent vs Per-Claim vs Flat Fee

Percent, per claim or flat: which price earns you the most on this client?

Type a practice's claim volume and what each claim collects, what a claim costs you to handle, and the three prices you might quote. The tool shows your margin under each, the smallest practice you can afford at each price, the price that would hit your target margin, and what happens if the practice's collections move.

Arithmetic on figures you type. Not billing, legal, tax or financial advice. The example figures are placeholders, not market rates or your situation.

1. The client

Claims per month

Submitted for this client.

Average collected per claim ($)

Payments received divided by claims, not the billed charge.

2. What it costs you to serve

Staff minutes per claim

Scrub, submit, post and follow up a clean claim.

Loaded hourly cost of staff ($)

Wage plus payroll taxes and benefits.

Clearinghouse and eligibility fees per claim ($)

Denied or rejected claims (%)

Share reworked.

Extra minutes per denied claim

Software cost per client per month ($)

Onboarding hours for the client

Months the onboarding cost is spread over

3. What you want and what you are offering

Target margin (%)

Of revenue, after the costs above.

Offer 1: percent of collections (%)

Offer 2: fee per claim ($)

Offer 3: flat monthly fee ($)

Questions billing company owners ask

What should a medical billing company charge?

Start from what the client costs you to serve: staff time per claim, clearinghouse fees, denial rework, software and onboarding. Then choose the price structure that earns your target margin at that client's volume and average collection per claim. Most small billing companies quote 4% to 9% of collections or a per-claim fee, but the right number is the one that covers your own cost plus margin, not the market average.

Is percent of collections or per-claim pricing better?

Percent of collections pays more on practices whose claims collect a lot, such as surgical or specialty work, and less on low-dollar visits where the work per claim is the same. This tool finds the average collected per claim above which a given percentage out-earns your per-claim fee, so you can see which side your client falls on.

When does a flat monthly fee work?

When the client's volume is steady and you have priced in a ceiling. A flat fee earns the same however many claims arrive, so the tool shows the claim volume above which the flat fee stops covering your cost and you should reprice.

How small a practice can I afford to take on?

The tool computes the smallest monthly claim volume at which each offer breaks even and at which it reaches your target margin. Fixed costs per client, such as software and onboarding, make very small practices unprofitable at a percentage that works for larger ones.

Is this billing, legal or financial advice?

No. It is arithmetic on the figures you type. It does not check payer contracts, state rules on percentage-based billing, or what any client has agreed to. Review your own agreements with a qualified professional.

Not decided

Payer contract terms, state rules on percentage-based billing, what the practice will accept, time to ramp up a new client, collections that arrive months after the claim, accounts receivable cleanup work, credentialing and other add-on services, bad debt, and taxes. Staff time is assumed to be proportional to claims. Term sheets and law differ by state and payer.