Medical billing costs vary enormously depending on the model — and most practices don’t realize how wide that range is until they’re already locked into one arrangement.
This guide covers every billing model with actual numbers: what you pay, what you get, and what the math looks like at different collections volumes. No vague ranges. No “it depends.” Specific numbers you can use to make a decision.
Medical Billing Cost by Model — 2026
Model 1: In-House Medical Biller
| Cost Component | Annual Cost |
|---|---|
| Base salary (median US medical biller) | $42,000–$58,000 |
| Payroll taxes (~10% of salary) | $4,200–$5,800 |
| Health insurance (employer share) | $6,000–$9,000 |
| PTO (10 days = ~4% of salary) | $1,680–$2,320 |
| 401(k) match (3%) | $1,260–$1,740 |
| Recruiting and onboarding (one-time) | $3,000–$7,000 |
| Software and equipment | $600–$2,400 |
| Total Year One | $58,740–$86,260 |
| Ongoing Annual Cost | $55,000–$77,000 |
As a percentage of collections: For a practice collecting $720,000/year ($60K/month), in-house billing costs represent 7–11% of collections.
Model 2: Full-Service Billing Company (Percentage-Based)
| Monthly Collections | At 5% | At 7% | At 10% |
|---|---|---|---|
| $30,000/month | $1,500 | $2,100 | $3,000 |
| $60,000/month | $3,000 | $4,200 | $6,000 |
| $100,000/month | $5,000 | $7,000 | $10,000 |
| $200,000/month | $10,000 | $14,000 | $20,000 |
Who this works for: Practices above $200K/month collections where percentage-based alignment of incentives outweighs the cost. Below $100K/month, the percentage model almost always costs more than a dedicated biller.
Model 3: Per-Claim Billing
Some billing companies charge per submitted claim: typically $3–8 per claim depending on specialty complexity. For a practice submitting 300 claims/month, that’s $900–$2,400/month. For 800 claims/month: $2,400–$6,400/month.
The problem: Per-claim pricing creates an incentive to submit claims — but no incentive to work denials or follow up on unpaid AR, since those activities don’t generate new claims to bill for.
Model 4: Dedicated Offshore Billing Staff (Hourly)
| Provider | Hourly Rate | Full-Time Monthly | Annual Cost |
|---|---|---|---|
| Dr. Billerz | $7/hr | $1,120 | $13,440 |
| DrCatalyst | $13–14/hr | $2,080–$2,240 | $24,960–$26,880 |
| My Mountain Mover | Not published (~$16/hr equiv) | ~$2,500+ | ~$30,000+ |
| Upwork freelancer (average) | $15–25/hr | $2,400–$4,000 | $28,800–$48,000 |
Model 5: US-Based Remote Billing Staff
US-based remote billers (through staffing agencies or direct hire) typically cost $20–35/hr — $3,200–$5,600/month — without the benefits and overhead of a full in-house hire, but still significantly more than offshore equivalents.
The Full Comparison at $60,000/Month Collections
| Model | Monthly Cost | Annual Cost | % of Collections |
|---|---|---|---|
| In-house biller (fully loaded) | $5,400–$7,200 | $65,000–$86,000 | 9–12% |
| Full-service outsourcing (7%) | $4,200 | $50,400 | 7% |
| US remote biller ($25/hr) | $4,000 | $48,000 | 6.7% |
| DrCatalyst ($13/hr) | $2,080 | $24,960 | 3.5% |
| Dr. Billerz ($7/hr) | $1,120 | $13,440 | 1.9% |
The Performance Factor — Why Lowest Cost Isn’t Always Cheapest
A billing model that costs $1,120/month but produces an 88% clean claim rate generates less revenue than one that costs $1,120/month and produces a 97% clean claim rate.
On $60,000/month in claims, that 9-point difference in clean claim rate represents $5,400/month in claims paying first-pass versus requiring rework — $64,800/year in performance difference from one metric alone.
The question isn’t just what the billing service costs. It’s what your billing operation produces at that cost. A dedicated biller with specialty expertise, a management layer, and a performance tracking infrastructure consistently produces better results than a shared service at any price point — because accountability is clearer.
Frequently Asked Questions
What is the average cost of medical billing services?
Full-service billing companies average 5–8% of net collections. For a practice collecting $60,000/month, that’s $3,000–$4,800/month ($36,000–$57,600/year). A dedicated offshore biller from Dr. Billerz costs $1,120/month ($13,440/year) — 70–80% less for the same or better coverage with more direct accountability.
Is it cheaper to do billing in-house or outsource?
Outsourcing almost always costs less. An in-house biller fully loaded costs $55,000–$86,000/year. A dedicated offshore biller at $7/hr costs $13,440/year — a saving of $41,000–$72,000 annually. The break-even only reverses if you need physical in-office presence, which most billing functions don’t require.
What do medical billing companies charge per claim?
Per-claim rates run $3–8 per submitted claim depending on specialty complexity. At 400 claims/month, that’s $1,200–$3,200/month. A dedicated Dr. Billerz biller handles unlimited claims at $1,120/month flat — no per-claim charges, no volume caps.
How much does medical billing cost for a small practice?
A solo practice or small group collecting $30,000–$80,000/month typically pays $1,500–$8,000/month through a percentage-based company. A dedicated Dr. Billerz biller costs $1,120/month regardless of collections volume — the savings are proportionally larger the more you collect.
Want the exact cost for your collections volume? Book a free 15-minute call — we’ll run the comparison for your specific situation.
Related Resources
Detailed cost comparison: all models side by side | Medical billing for small practices | Best medical billing companies 2026 | Dr. Billerz pricing