3 Types of Medical Billing Companies

I was recently talking with the CEO of an EHR vendor. As we talked about their EHR software and what they were working on in the future, the CEO made a really important comment. He said, “The EHR can be great, but if you don’t take care of the medical billing the right way then none of that matter.”

This was such an important point and one that I’d seen first hand. An OB/GYN friend of mine had an EHR that they loved. As the doctor, she loved it for her clinical work. The problem was that it wasn’t tied to a great practice management system. So, she was having issues with her billing. The problem was so bad that she ended up leaving the EHR she loved clinically to find something that would solve her billing problems. Don’t ever underestimate the importance of medical billing.

I recently came across an article on the Kareo blog which highlighted 3 levels of medical billing and RCM (revenue cycle management) services billing companies can offer a practice:


Level of service offered by many billing software vendors.


Level of service offered by some software vendors and most traditional billing services.


Level of service typically offered by smaller “mom and pop” billing companies who have expertise in a limited number of specialties and/or provide more oversight.

As you evaluate medical billing companies for your practice, this is a nice framework for evaluating the various medical billing companies that are out there. Each one provides a different set of expertises to help your practice. Understanding that difference is key to choosing one that will work best for you.

What’s been your experience with medical billing companies? Do these 3 types make sense to you or would you look at them from a different angle?

About the author

John Lynn

John Lynn

John Lynn is the Founder of HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • I think you’ve hit the most suitable categorization of billing companies.

    The biggest problem I’ve seen is when a company pretends to be a Full-Service vendor and they are really a Light. Or, worse, they describe a Boutique level of service that they don’t provide.

    Without having to name some of the usual, obvious suspects, it’s a real surprise when I bump into practices after 6 months with their new EHR + billing vendor who say, “This is exactly what I expected!”

  • I have a question. Is an EHR/EMR a clinical tool or a practice management tool? Do Drs. demand that all their exams be at Level 5, which is improbable?

    EMRs have been billing engines since inception. Clinical has lagged behind. Many of the billing issues can be traced back to linking ICD 9/10 codes to the incorrect CPT code, putting in the wrong NPI numbers for the examining Dr and putting in an exam level that belies the best of literary fiction.

    Port the codes to a tertiary product that will check claims for reality, send them to the insurers and receive the payments and do reporting on the payments and claims. I would go with Quicken over most of the intrinsic practice management systems. I would also give a reality check to Drs who think that what they do is essential and necessary and requires maximum payment.

  • Chip,
    Good point.

    That’s part of the game of CPT codes. That said, I think that most doctors generally undercode vs overcode. There are exceptions, but not most doctors. The porting sounds easy until you do it and then you realize it’s a pain. That’s why everyone finally went integrated.

  • We recently encountered another type of billing company best described as a Trojan Horse. It was disguised as an EMR. They pushed us to implement their system without configuring it, so 80% of our claims weren’t making it to the payers. After letting us struggle over a month, they said we wouldn’t be having EMR issues if we were using (and paying them $250k more for) their “revenue mgmt service.”

    They attempted to railroad us into accepting their billing services as the only possible way to salvage our collections by sabotaging another function of our business (the EMR).

    When did electronic medical records become synonymous with billing and collections? Billing is certainly an important function of the business, but why is it a higher priority than scheduling and clinical charting??
    The answer is obvious— it’s where the money is at.

    The problem with these medical billing services is that they take 6-10% of gross revenue, but do not decrease overhead cost or increase revenue. The investment firms driving this do not know (or care) that general practices do not have a 10% profit margin to spare.

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