How Do You Compare Two RCM Proposals Fairly?
Compare two RCM proposals by putting them on one grid with the same rows: the tasks each covers, the all-in annual cost as a share of your collections, how each defines its rates, where the money is deposited and what the exit terms say. Clear the legal and control dealbreakers first, then score what is left.
Written by Salman Saeed, CEO and Co-Founder · Reviewed by a Certified Medical Coder · 
In short: list every task in both proposals and mark who owns it, and convert each fee model to total annual cost divided by your own collections. Make each vendor define its rates in writing, confirm deposits go to an account in your name, and compare notice, data return and portal ownership at exit.
What Do You Line up First When Comparing Two RCM Proposals?
Start with scope, not price. Two proposals that both say "full revenue cycle management" usually cover different work, and the cheaper one is often cheaper because a task is left on your side of the table.
Build one grid with the same rows for both vendors and fill every cell from the proposal text. A blank cell is a question, not a yes.
| Task | Proposal A | Proposal B | Who owns it? |
|---|---|---|---|
| Charge entry and coding review | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Claim scrubbing and submission | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Payment posting from remittances | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Denial work and appeals | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Patient statements and phone calls | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Eligibility and prior authorization | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Credentialing and payer enrollment | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
| Reports and how often they arrive | Included, extra fee or no | Included, extra fee or no | Vendor, you or shared |
OIG guidance for third-party billing companies recommends that the contract "enumerate those functions that are shared responsibilities and those that are the sole responsibility of either the billing company or the provider." If a proposal does not say who owns a task, treat it as yours. The contract clauses that follow from the grid are in what to check in a billing company contract.
How Do You Compare the Fees When the Models Differ?
Convert both offers to one number: the total annual cost divided by the annual cash collected. A percentage-of-collections fee, a flat monthly fee and a per-claim fee cannot be compared as quoted, but they can all be turned into a share of your collections.
- Add every recurring charge: the percentage or flat fee, monthly minimums, platform fees, clearinghouse fees and statement postage.
- Add every one-time charge: setup, data conversion, training and any charge to leave.
- List which charges apply to which claims. Some proposals exclude old A/R, secondary claims, patient balances or appeals.
- Divide the total by the cash you expect to collect in the same twelve months, using your own last twelve months of deposits, not the vendor's projection.
- Put the answer next to what you pay now, counting salaries, software, clearinghouse and overhead on the same basis.
The in-house side is worked through in in-house vs outsourced billing costs, and the in-house vs outsourced billing cost calculator does the arithmetic from your numbers. Check the percentage fee wording too: the OIG notes "a longstanding concern that percentage billing arrangements may increase the risk of upcoding and similar abusive billing practices." Ask how the vendor audits coding; do not reject percentage pricing outright.
Which Performance Claims Can You Actually Compare?
Compare a claim only when both vendors define it the same way. "Clean claim rate" is the common trap. HFMA's CL-1 definition is the claims that pass edits requiring no manual intervention divided by the claims accepted into the claims processing tool, while Medicare's own definition of a clean claim is one that does not require the contractor to investigate or develop external to its Medicare operation on a prepayment basis.
Ask each vendor to put the following in writing before you accept any number:
- The formula for each rate, with the numerator and denominator named.
- The period and the population: which payers, which specialties, which months, and whether the figure is a client average or a single account.
- The source: remittance files, clearinghouse reports or the practice management system, and whether you can pull the same report yourself.
- What is excluded, such as rejected claims, patient balances or claims under review.
The meaning of each metric is in medical billing KPIs for CFOs. A rate with no formula cannot be compared and cannot be enforced later. If a vendor commits to a number, ask what the remedy is when it is missed.
How Do You Check Where the Money Goes and Who Can Touch It?
Find out which bank account receives payment, and make sure it is yours. For Medicare, CMS form CMS-588 says "The account to which EFT payments made must bear the name of the physician or individual practitioner, or the legal business name of the person or entity enrolled with Medicare," and that the person or entity "has sole control of the account to which EFT deposits are made."
There is a second Medicare rule behind this. Under 42 CFR 424.73(b)(3), Medicare may pay an agent who furnishes billing and collection services only if the agent's compensation is "not related in any way to the dollar amounts billed or collected," among other conditions, and "Payment to an agent will always be made in the name of the provider." A vendor paid a percentage of collections should therefore never be set up to receive your Medicare payments. Ask how deposits are routed, and have your counsel confirm it.
Then ask about the data side. A billing company that handles claims for you is a business associate under HIPAA, so each proposal should come with a business associate agreement, and the agreement must require subcontractors to "agree to the same restrictions and conditions" that apply to the vendor. Ask whether any work, including coding or statements, goes to a subcontractor and where.
What Should the Exit Terms Say?
The exit terms decide how hard it is to leave, so compare them before you sign. Under 45 CFR 164.504(e)(2)(ii)(J), the business associate agreement must say that at termination the associate will, if feasible, return or destroy the protected health information it still holds.
- How many days of notice either side must give, and whether a minimum term applies.
- Whether you receive your claim, remittance and A/R data in a usable format, and how fast.
- Whether the vendor keeps working the A/R it already holds after termination, and on what fee.
- Who holds the payer portal logins, the clearinghouse enrollment and the ERA/EFT enrollment.
- What happens to claims in flight on the last day.
The sequence for leaving is in how to switch medical billing companies.
How Do You Turn All This into One Decision?
Score each row of the grid, weight the rows by what matters to you, and decide on the weighted total only after the dealbreakers are cleared. A dealbreaker is a row where the proposal fails a legal or control requirement: deposits not to your account, no business associate agreement or no data return.
Five areas, scored 1 to 5, weights adding to 100.
A clear gap is a decision. A small gap means the proposals are close, so use a reference call or a pilot on one payer or location. An emergency medicine billing group needs scope rows, such as No Surprises Act dispute work, that a primary care office does not. The wider selection steps are in choosing a billing partner and how to choose a medical billing company.
How Nucleus Align Handles a Proposal Review
We put scope, reporting and exit terms in writing, and our revenue cycle management team will walk through any proposal grid with you, ours or another vendor's. We sign a business associate agreement with every client. Book a call to compare a proposal against your own numbers, or return to the blog.
- Compliance Program Guidance for Third-Party Medical Billing Companies (63 FR 70138) · HHS Office of Inspector General
- 42 CFR 424.73 Prohibition of assignment of claims by providers · eCFR
- Medicare Claims Processing Manual, Chapter 1, sections 30.2.4 and 80.2 · CMS
- CMS-588 Electronic Funds Transfer Authorization Agreement · CMS
- 45 CFR 164.504 Uses and disclosures: organizational requirements · eCFR
- HFMA MAP Keys · HFMA
We check every rule, code and deadline against the official source. See our editorial policy.
Common Questions
Straight answers from the team that does the work.
Ask a billing lead directly. A 20-minute call, Monday to Friday, 9am to 5pm Eastern.
01How do I compare two RCM proposals fairly?
Put both on the same grid: the tasks each covers, the total annual cost as a share of your collections, how each defines its performance rates, where deposits go and what the exit terms say. Clear any dealbreaker first, then score the rest with weights you set before reading the proposals.
02Should I pick the lower percentage fee?
Not by itself. A lower percentage can exclude old A/R, appeals, statements or secondary claims, so the all-in cost can end up higher. Convert both offers to total annual cost divided by your own twelve months of collections, with every recurring and one-time charge included, then compare.
03Who should receive my Medicare payments when I use a billing company?
You should. CMS-588 says the EFT account must bear the provider's name and that the provider has sole control of it, and 42 CFR 424.73(b)(3) says payment to a billing agent is made in the provider's name and only if the agent's pay is not related to dollars billed or collected.
04What should I ask a vendor about its clean claim rate?
Ask for the formula, the numerator and denominator, the period, the payers included and what is excluded. HFMA's CL-1 divides claims that pass edits with no manual intervention by claims accepted into the claims processing tool. Medicare defines a clean claim differently.
05What exit terms should I compare?
Compare notice period, minimum term, how and how fast you get your data, who holds portal and clearinghouse enrollments, what happens to claims in flight and the return or destruction of protected health information that 45 CFR 164.504(e)(2)(ii)(J) requires in the business associate agreement.
Talk to a Billing Lead.
A 20-minute call about your payers, volume and setup. Monday to Friday, 9am to 5pm Eastern.