How to Compare Medical Billing Companies: A Practice Owner’s Checklist

Compare medical billing companies with a written checklist covering five areas: due-diligence questions, reference checks, data security (HIPAA compliance and a signed Business Associate Agreement), pricing-model mechanics, and exit terms. Ask every finalist identical questions, demand written answers, and score them side by side. The “best” company is the one that survives your checklist, not the one with the best reviews page.

Lists of the “best medical billing companies” are everywhere online, and nearly all of them are pay-to-play or affiliate-driven. The honest answer is that the best company for a three-provider pediatric practice is not the best company for a twelve-provider orthopedic group. What transfers from practice to practice isn’t a vendor name — it’s a comparison process. This is the checklist we’d hand any practice owner sitting down with two or three finalists. Print it, ask every candidate the same questions, and compare the written answers.

Part 1: Due-diligence questions (ask every finalist)

• How long have you been in business, and under what names? Billing companies fail and re-form frequently; a name change can hide a track record.
• How many clients do you serve in my specialty, and what is your average client tenure? High churn is the single most honest performance metric a vendor can’t easily dress up.
• Who exactly will work my account? Named team, credentials (ask specifically about AAPC certification, the dominant credentialing body for professional coders), and how many accounts each person carries.
• Where is the work performed? Onshore, offshore, or hybrid — and is any of it subcontracted? You can’t evaluate data security without knowing this, and subcontractors must themselves be bound by HIPAA business associate obligations (HHS Office for Civil Rights, HIPAA Privacy Rule, 45 CFR 164.502(e)).
• What is your process when a claim denies? Listen for specifics: worklists, appeal deadlines, payer-specific strategies. KFF’s January 2025 analysis found HealthCare.gov insurers denied 19% of in-network claims in 2023 — denial follow-up is not an edge case, it’s a fifth of the job.
• What routine reports will I receive, and can I log into the system myself?
• What was your last client to leave you, and why? Every vendor has one. The quality of this answer tells you how they’ll communicate when things go wrong for you.

Part 2: Reference checks (do all three)

• A same-specialty reference. Ask about denial patterns specific to your specialty and whether the vendor caught them.
• A long-tenured reference (3+ years). Ask whether service quality changed after the first year, and whether the team they were sold is the team they got.
• A reference who has been through a problem. Ask how the vendor behaved during a cash-flow dip, a payer audit, or a system conversion. Vendors are indistinguishable when everything is going well.

If a company cannot produce three references matching those descriptions, that is itself a finding.

Part 3: Data security and HIPAA items

• A signed Business Associate Agreement before any PHI moves. This is not optional courtesy paperwork — HIPAA requires covered entities to have a BAA in place with any vendor that creates, receives, maintains, or transmits protected health information on their behalf, and HHS publishes sample provisions to compare against (HHS Office for Civil Rights, Business Associate Contracts guidance).
• Breach history and breach notification process. Ask directly: has the company ever reported a breach, and what is its notification commitment to you in hours or days?
• Access controls. Who at the company can see your patient data, and how is access logged and revoked when staff leave?
• Data transmission and storage. Encryption in transit and at rest should be a one-sentence yes.
• Subcontractor disclosure in writing. If any function is subcontracted, the chain of BAAs must extend to them (45 CFR 164.502(e)).

Part 4: Pricing-model comparison

There are three dominant pricing models. None is automatically cheapest — the math depends on your volume, payer mix, and average reimbursement per claim.

• Percentage of collections. The vendor takes an agreed percentage of what it collects. Incentives are broadly aligned — they earn more when you collect more — but ask precisely what the percentage applies to (net collections? gross? patient payments you collect at the front desk?). Note that the HHS Office of Inspector General’s 1998 compliance guidance for billing companies flagged a “longstanding concern that percentage billing arrangements may increase the risk of upcoding,” so ask percentage-model vendors how they audit their own coding.
• Flat monthly fee. Predictable budgeting; the risk is a vendor whose effort is also flat. Ask what volume assumptions the fee is built on and what happens when you add a provider.
• Per-claim fee. Cost scales directly with volume. Ask whether resubmissions, corrected claims, and secondary claims each count as a new billable claim — this is where per-claim quotes quietly grow.

Whichever model you’re quoted, require a written list of everything not included: patient statements, old A/R cleanup, credentialing, custom reporting, and termination/data-export costs. (Our post later this month goes deeper on what billing companies actually charge.)

Part 5: Contract and exit terms

• Initial term, renewal mechanics, and how much notice non-renewal requires.
• Termination for performance, tied to metrics written into the agreement.
• Your data returned in a usable format, on a stated timeline, at a stated (or zero) cost.
• Who works “tail” claims — submitted before exit, paid after.

Scoring it

Give each finalist a simple 1–3 score per checklist item and total the columns. The exercise feels mechanical, but it does two things: it stops a single charismatic salesperson from carrying a weak company, and it creates a paper trail of what you were promised — which becomes very useful in year two.

A billing partner should welcome this level of scrutiny; the good ones already have written answers waiting. AMS Solutions has been answering these questions for practices since 1992, with AAPC-certified coders doing the work and a BAA on the table before anything else moves. If you’re building your comparison shortlist, we’d be glad to put our medical billing services through your checklist — bring the hard questions.