10 Questions to Ask Before Hiring a Medical Billing Company

CMS estimates a 6.55% improper payment rate for Medicare Fee-for-Service, representing $28.83 billion in improper payments. This shows that billing errors have a significant impact on a practice’s finances.

Another report by the CMS stated that, for Medical Evaluation and Management services specifically, the estimated improper rate was 10.3%, with incorrect coding and documentation issues making up a major share of those payments.

Given the growing burden of medical billing on their in-house teams, practices are looking to outsource medical billing services to support and streamline their revenue cycle. But when you hit the internet to hire a medical billing company, everybody seems to be claiming to be the best, right?

Choosing a medical billing company is not as simple as it appears on paper, you see, you don’t want to give your practice’s finances into somebody else’s hands.

Moreover, the process is also very tiring and long. For instance, you have to compare pricing, check reviews, and discuss with them the agreement about a possible partnership. Even after this, certain doubts remain, and most of them are regarding their coding accuracy, follow-up of unpaid claims, and so on.

But what if I tell you that there is a simple way which can help you in hiring a medical billing company?

Yes, by asking the right questions, you can choose the right medical billing company for your practice.

On that note, here are 10 questions to ask a medical billing company to make the right decision. Along with that, also explore what answers to expect from these companies.

So, without further ado, let’s get started.

Question #1: What Experience Do You Have With Practices Like Ours?

Every medical practice works in a unique way that suits them best, and the same is the situation with medical billing companies. That is why this is the first question to evaluate a medical billing company.

Ask the company about their experience with your specialty, practice size, payer mix, and the kind of billing complexities you deal with on a regular basis.

Something that you’ll hear very often as an answer to this question is, ‘Yes, we work with your specialty.’ Well, in one simple sentence, don’t believe them. Ask them to share specific examples of similar practices they have supported, the challenges they handled, and the results they have achieved through that.

Look for specific answers from them that are easier to understand, and you can relate with.

Question #2: Can You Provide References From Similar Healthcare Practices?

This question is sort of like a follow-up question to the 1st question. It basically helps you to verify the experience they have shared with you, and this is what makes it one of the most useful questions for evaluating the billing company.

Ask them to provide particular references from practices that are close to yours in terms of size, specialty, and billing complexities. Also, once they provide you with the references, speak with them and remember not to directly ask if they are satisfied with the services or not.

You have to find out the intricacies of the billing company, how communications take place, handling of issues, management of claims, and reports on performance. If possible, also check the company’s online reputation, ratings, and reviews, and cross-check them with their claims.

You are hiring a medical billing company, so you should actually know how good they are and if they are actually what they are claiming.

Question #3: What Billing and RCM Services Are Included and What Do You Not Handle?

Getting a quote from a medical billing company is one thing and understanding what you’re actually paying for in another. That is why, before making any decision regarding hiring, ask exactly which billing and RCM services are included in the agreement. For example, does the company handle coding, claim submission, payment posting, denial management, A/R follow-up, patient billing, and reposting?

But that is just one part of the equation; you also need to confirm what they don’t handle.

There are some instances where the vendors exclude certain claim types, older A/R balances, specific denial categories, or accounts that require additional follow-ups. On the other hand, some also offer services for additional fees like credentialing, coding audits, or eligibility verification.

These details are crucial for you to compare vendors on more than just their quoted percentage or flat fee. This question in particular can help you understand the actual scope of the partnership and avoid unexpected gaps later.

Question #4: What Qualifications and Training Does Your Billing Team Have?

Knowing what a medical billing company handles is indeed important, but along with that, you should also know who handles it. The people working on your claims can directly influence coding accuracy, denials, and the revenue your practice ultimately collects.

Ask about the team, their experience, training, and certifications. Questions like ‘Do you have certified coders on staff?’ are extremely necessary. Also, check their affiliation with professional organizations like AAPC, AHIMA, or HBMA. If possible, check if the teams are updated with the latest coding guidelines, payer requirements, and healthcare regulation change.

These medical billing company questions can help you understand whether you’re working with a trained team or simply being handed off to a generic billing staff. A credible vendor should be able to clearly explain its team’s qualifications and ongoing training instead of giving you vague answers about experienced professionals.

Question #5: How Do You Manage Claim Denials and A/R Follow-Up?

Submitting the claims is just one aspect of the job that your medical billing company will be managing. But what happens when a claim gets denied or remains unpaid can have a bigger impact on your revenue cycle, as discussed earlier.

When asking what to ask a medical billing company before outsourcing, find out how they identify, prioritize, and work on denied claims. Along with that, also ask who follows up on unresolved claims, how appeals are handled, and how the teams track each claim until it is resolved.

During this, you must also ask what happens when the same type of denials keep coming back. A billing company should have expertise in solving this issue by identifying patterns, underlying causes, etc.

Remember, don’t just ask about their overall denial rate; ask them about how they actually manage the denials behind the numbers they are claiming. The answer can tell you a lot about how actively the company manages your A/R rather than simply reporting on it.

Question #6: How Does Your Billing System Work With Our EHR/EMR and Practice Management Software

This is one of the problems that you will obviously face. You see, a billing company can have an experienced team and a strong denial process, but if its system doesn’t work well with yours, it’s better not to choose that company.

To know more about this, you need to ask whether the company already works with your specific EHR/EMR and practice management software. Find out how patient and billing data moves between the systems, whether integrations are already available, and how electronic claims are submitted.

You should also ask what the implementation process looks like and who will handle technical issues if something goes wrong. These questions to evaluate a medical billing company cover more than just support and you need to understand how that support works in your day-to-day workflow.

Question #7: What KPIs, Reports, and Financial Visibility Will We Receive?

Once your billing is outsourced, you still need to know what is happening with your revenue cycle; after all, it is about your hard-earned money. Having said that, you shouldn’t have to wait until the end of the month to find out that your A/R is growing or claims are being denied.

What you have to ask here is what KPIs and reports they provide and how often you’ll receive them. Depending on your practice, these KPIs will value but some of the metrics included in them are clean claim rate, denial rate, days in A/R, net collection rate, aging reports, and payment trends.

Also ask whether you’ll have access to a dashboard or regular performance review, and if the company can show you a sample or redacted client report. This can not only give you a better idea about their reporting structure but also show how transparent their reporting really is.

Find out exactly what you’ll see, how often you’ll see it, and how those numbers will help you understand your practice’s financial performance.

Question #8: Who Will Manage Our Account and How Will Communication Work?

Even if the billing company you choose has the right team and all the processes in place, poor communication can ruin your entire partnership and can be the main cause of frustration. And you don’t want to spend days chasing someone to find out why your revenue is being impacted.

Ask them who will be their primary point of contact and how communication will work. Certain things that you need to confirm in this are who will be your account manager, what channels you can use to reach them, and what response time should be expected.

It’s also worth asking how many other client accounts your account manager handles and what the escalation process looks like when an issue needs attention. Having clear communication, timely updates, and someone accountable for keeping your revenue cycle on track are some of the things that bridge the communication gap between your team and theirs.

Question #9: Who Owns Our Billing Data, and How Do You Protect It?

When you are outsourcing your billing process, you are basically trusting another company with your sensitive patient and financial information. That is why making sure you understand who owns that data, who can access it, and what happens to it if the partner ends is crucially important.

Some of the things that you need to ask here are how the company protects patient health information (PHI), what HIPAA procedures it follows, and whether access controls are in place to restrict information to authorized personnel. Ask for relevant security documentation and details about how data is stored, transferred, and backed up.

Don’t forget to clarify data portability, and know how you will be able to retrieve your billing records, claims history, and reports in a usable format, just in case you decide to switch the company.

Question #10: What Are All the Costs, Contract Terms, and Potential Additional Fees?

Last but not least, before making final decisions, you need to clarify what this partnership will actually cost to your practice.

The very first thing that you need to emphasize on is the complete breakdown of the pricing structure. Some aspects that come into play are whether the company is taking any percentage of collections, or a flat fee, or a per-claim rate. Don’t forget to ask about the additional costs that might be included in it, like onboarding, clearinghouse access, coding, credentialing, or other services.

Also, go through the contract carefully, check the agreement length, renewal terms, termination requirements, and notice period. Here, two questions are extremely important: what happens if the partnership doesn’t meet your expectations, and can you transition to another billing company without unnecessary disruption?

When hiring a medical billing company, don’t let attractive offerings rush you into making a decision. A transparent pricing structure and clearly defined contract terms can help you avoid unexpected costs and complications later.

How Should You Compare the Answers from Different Medical Billing Companies?

Sometimes, most of the medical billing companies can give you similar-sounding answers, which can create more confusion. Here, you need to compare their answers on specialty experience, service scope, proven results, pricing transparency, communication, security, and overall fit with your practice.

Before making a decision, it is important to verify the references these companies give, along with their performance claims and contract terms. Pay attention to the answers they give you and look for vague answering, missing capabilities, or promises that aren’t backed by evidence.

Remember, the goal isn’t to find a company that checks every box on paper, but to find a billing partner whose processes, expertise, and expectations align with your practice’s needs.

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