Choosing a Billing Partner for a Hospital or Large Group
Choose a billing partner by sending every vendor the same RFP, scoring the answers on a fixed scorecard before you open the pricing, and calling references yourself. This guide gives a hospital CFO or group owner the RFP outline, a weighted scorecard, the questions to ask and the red flags to watch.
Written by Salman Saeed, CEO and Co-Founder · Reviewed by a Certified Medical Coder · Last reviewed October 2026
In short: a good billing partner choice comes from a written scope, your own baseline numbers, one RFP sent to every vendor, and a weighted scorecard scored before price. Test hospital and NSA experience on real workflows, define the fee base and the service levels in writing, and call references directly.
How Do I Choose a Medical Billing Company?
Define what you need, send every vendor the same package, score the answers against a fixed scorecard, and open the pricing last. A structured request for proposal (RFP) takes more effort than a few sales calls, and it is the only way to compare vendors on the same facts.
Use this sequence. The scorecard and question lists below are the tools for steps 3 to 5.
- Write the scope: which entities, sites, payers and services you are handing over, and which you are keeping. A hospital may outsource only denials and A/R, while an ER group may hand over everything from charge capture to IDR.
- Pull your baseline numbers from your own system: charge volume, A/R aging, denials by reason and payer, and the cost of your current team. The next section lists what to include.
- Shortlist three to five vendors that serve your type of organization, and send each the same RFP package. Share only aggregate or de-identified data. Sign a business associate agreement before anyone sees an account-level sample.
- Score the written answers on the scorecard before you look at the fee. Pricing is easy to compare and hard to evaluate, so it should not decide who reaches the interview stage.
- Interview the finalists, ask them to work through a sample scenario from your payer mix, and call references.
- Compare the proposals on price and contract terms last, using the contract checklist, and have counsel review the final agreement.
- If the vendor agrees, start with a defined pilot, such as one site or one payer group, with the measures and the end date written down.
The security and control questions for step 5 have their own guide: is it safe to outsource medical billing. This guide covers the evaluation as a whole and leaves the detailed controls to that one.
What Should a Billing RFP Include?
An RFP should tell vendors what you do, what you need and how you will score them, and it should require answers in a fixed format. Vendors that cannot answer in your format will not report to you in one either.
| RFP section | What to put in it |
|---|---|
| Organization and scope | Entity types, sites, specialties, services to outsource, services to keep, and the start date you want |
| Volume and payer data | Aggregate counts by month, by payer class and by claim form (UB-04 or CMS-1500), for the last 12 months |
| Systems | Your EHR, practice management or patient accounting system, clearinghouse, and any payer portals in daily use |
| Required deliverables | Charge capture review, coding, claim submission, payment posting, denial work, A/R follow-up, patient statements, reporting |
| Out-of-network and NSA work | Whether the vendor must handle open negotiation and federal IDR, and for which entities |
| Security and compliance | BAA terms, access model, subcontractors, staff locations, the compliance officer, and your audit rights |
| Financial controls | Deposit account ownership, remittance routing, reconciliation and the refund process |
| Reporting | The reports you require, their definitions, how often, and read-only access |
| Transition plan | Dated milestones for access, enrollment changes, open A/R transfer and go-live |
| Pricing | Fee base, fee rate, setup fees, extras and what happens to fees after termination |
| Contract and exit | Term, notice, data return and transition help |
| Evaluation and timeline | The scorecard, the weights, deadline for questions, interview dates and decision date |
Put your scoring weights in the RFP. It stops vendors from guessing and gives you a record of why you chose who you chose.
What Data Should We Put in the RFP Package?
Give vendors enough aggregate data to price the work and to commit to targets, and nothing that identifies a patient. The list below is also your baseline for judging results after go-live.
- Charges and claims by month for the last 12 months, split by payer class and by site.
- The share of claims on the UB-04 (837I) and on the CMS-1500 (837P).
- Current A/R by age bucket and by payer, including the amount over 90 days.
- Denials by the top reason codes and by payer, for the last 12 months.
- Days from date of service to claim submission, as you measure it today.
- Your current clean claim rate and the formula behind it. The standard formulas are in our guide to medical billing KPIs for CFOs.
- Your fully loaded cost of the current billing function, built with the in-house vs outsourced billing cost calculator.
- Out-of-network volume and the open negotiation and IDR cases open today, if any.
If you cannot produce a number, say so in the package. A vendor that proposes a baseline of its own, with its method written out, is usually more useful than one that accepts your figures without question.
What Should a Billing Partner Scorecard Look Like?
A scorecard turns the interviews into numbers you can defend. Score each criterion from 0 to 5, multiply by the weight, and add up to 100. The weights below are a starting point for a hospital or large group, so change them to match your priorities before you send the RFP.
| Criterion | Starting weight | Questions to ask | Evidence to request |
|---|---|---|---|
| Hospital and facility experience | 15 | How do you validate bill type, revenue codes and patient status before a UB-04 is sent? Which care settings and payer types have you billed? | A sample report layout, a redacted workflow, and a named lead who will run your account |
| NSA and IDR capability | 10 | Who tracks open negotiation and IDR deadlines? How do you decide which claims to dispute? Who pays the fees, and when? | The IDR measures you report, and a case-level sample with identifiers removed |
| Security and compliance | 15 | Who is your security official and compliance officer? Where do staff work and where is PHI stored? | Signed BAA terms, subcontractor list, date of the last risk analysis, training records |
| Cash and payment control | 10 | Will payments go to an account in our name? How do you reconcile remits to deposits? | A sample weekly reconciliation and the payment instructions in the draft contract |
| Systems fit | 10 | Which EHR, clearinghouse and portals have your team used in production? How is access provisioned? | Named experience with your systems and the access model in writing |
| Reporting and transparency | 10 | Which reports do we receive, how often, and can we recompute them? | Sample reports with definitions; read-only access in the contract |
| Denial and A/R process | 10 | What is your turnaround on denials and rejections? How do you decide when to appeal, and who owns follow-up? | Written workflow and the turnaround time you will commit to in the contract |
| Onboarding and transition | 10 | What are the dated milestones from signature to go-live? What do you need from us, and by when? | A dated plan with named owners on both sides |
| Pricing and contract terms | 5 | What is the fee base, and are there setup, minimum or termination fees? | A full fee schedule and a draft agreement |
| References | 5 | Which clients are similar to us in size, setting, EHR and payer mix? | Two or three reference contacts you can call directly |
Add two rules before you score. First, set a minimum: any criterion scored 2 or below is a stop until the vendor fixes it in writing, however good the total. Second, have two people score independently and compare, since one enthusiastic interviewer can skew a whole field.
Illustrative scores only. Weighted points are weight multiplied by score, divided by 5.
Vendor A leads by three points. The more useful result is that Vendor B scored 2 on NSA and IDR capability, which trips the minimum rule. If you have out-of-network volume, B is out until it shows a fix, however strong its facility experience.
What Experience Should a Billing Partner Have with Hospitals?
A hospital partner needs experience with institutional claims, not only physician billing. The facility claim carries bill type, revenue codes, patient status, and condition and occurrence codes, and errors there produce denials that a physician-side biller never sees.
Our own scope for this work is UB-04 claim preparation, revenue-code validation, submission, payment reconciliation and denial management for inpatient, outpatient and emergency care. Hold every vendor to the same level of detail. Ask each one to walk through a real workflow rather than describe it in general terms.
| Area | What to probe |
|---|---|
| Claim preparation | How bill type, revenue codes, patient status, condition and occurrence codes and authorization requirements are checked before submission |
| Emergency department | Who assigns the facility visit level, how the chart supports it, and how the facility claim is kept consistent with the professional claim |
| Payment reconciliation | How remits are matched to claims, how underpayments are found, and who works them |
| Denials | How denials are categorised by cause, who owns each category, and how root causes go back to the front end |
| Mixed settings | Whether the same team handles inpatient, outpatient and emergency accounts, and how the work is divided |
Background reading for your interview questions: hospital and facility billing and facility vs professional billing and facility level coding for the ED.
Should a Billing Partner Have NSA and IDR Experience?
Yes, if you bill out-of-network emergency or facility services. Federal IDR is a final offer process with short deadlines, mostly counted in business days, and a missed day can end the dispute. Open negotiation must start within 30 business days of the initial payment or denial, and if the sides have not agreed by the end of its 30 business days, either side has 4 business days to start federal IDR.
Ask a vendor to show how that work is run, not only that it exists:
- Who tracks each deadline, and what happens when that person is out?
- How is a claim chosen for dispute, and how is the offer set?
- Who pays the IDR administrative fee and when, and how are fees recorded against each case?
- What documentation is validated before submission, and who signs off?
- Which measures are reported?
We measure IDR work by decision win rate, award-to-offer ratio, reimbursement recovered and collections, using verified case-level data. Ask any vendor for the equivalent measures on a case-level sample with identifiers removed, and be wary of one that offers only a headline percentage. See the federal IDR process and open negotiation for the rules behind the questions.
How Do Billing Companies Charge?
Most charge a percentage of collections, and some use a flat monthly fee, a fee per claim or a mix. What matters is the fee base, the extras and the tail after termination.
| Model | How it works | Watch for |
|---|---|---|
| Percentage of collections | The vendor earns a share of what is collected | The definition of collections: net of refunds? Does it include old A/R it did not work? A share of payments the vendor did not cause |
| Flat monthly fee | A fixed fee for an agreed scope | What counts as in scope; volume bands; whether the fee rises when volume does |
| Per-claim fee | A set amount per claim submitted | Rework, resubmissions and rejected claims billed again |
| Hybrid | A base fee plus a smaller percentage | Which parts of the work each element covers |
| Setup and extras | One-time onboarding, per-statement, per-appeal, credentialing or reporting charges | A full fee schedule, in writing, before you sign |
The OIG's compliance guidance for third-party billing companies states a longstanding concern that percentage billing arrangements may increase the risk of upcoding and similar abusive billing practices. That is not a reason to avoid them, because percentage fees align the vendor with collections. It is a reason to write audit rights and a quarterly claim sample into the contract, whichever model you pick.
Fee model also interacts with how payments are routed. Under Medicare's agent rule, 42 CFR 424.73(b)(3), compensation of an agent that receives payment for the provider cannot be related to the dollar amounts billed or collected. Keep payments going to your own account, as explained in the safety guide, and ask counsel to review any contract. With Nucleus Align, payers pay you directly into your own bank account and we invoice our agreed percentage of what was collected.
Our published pricing is 4 to 8% of collections for billing, and $150 to $300 per application for credentialing, charged separately. Where you land in the billing range depends on your services, specialties and systems, and is agreed on a call. See pricing. To compare fees with your internal cost, read in-house vs outsourced billing costs.
What KPIs and SLAs Should Be in the Contract?
Put every measure you intend to hold the vendor to in the contract, with its definition and its reporting date. A target without a definition cannot be enforced. The formulas for the main KPIs are in our KPI guide, and the surrounding terms are in the billing company contract checklist.
| Service level | What to define | Why it matters |
|---|---|---|
| Charge to claim | Business days from charge entry to claim submission | Slow submission starts the timely filing clock against you |
| Rejection correction | Business days to correct and resend a rejected claim | Rejections are fixable errors, and each day is delayed cash |
| Denial work | Business days from denial to first action, and the appeal rule | Appeal windows are fixed and short |
| Payment posting | Business days from remit receipt to posting | Late posting hides underpayments and credit balances |
| Reporting | Report list, definitions, due dates and access | The only way to see what the vendor is doing |
| Responsiveness | Time to answer your account queries | Your staff and patients will ask |
| Key personnel | Named account lead and notice of any change | Continuity of knowledge on your accounts |
| Remedies | What happens on a repeated miss: credit, plan, exit right | A target with no consequence is a wish |
Set the numbers yourself from your baseline and your payer contracts, and then ask each vendor to commit to them or say why not. For our own commitments, claims are sent within 24 hours of charge entry and denials are worked within 48 hours.
How Do I Check a Billing Company's References?
Ask for contacts at organizations like yours, call them yourself, and ask about problems, not praise. A reference call about problems tells you more than the proposal does.
- Ask for two or three references that match your setting, size, EHR and payer mix, and the name of the person who ran the project on the client side.
- Call the reference directly. Do not accept a written statement relayed by the vendor.
- Ask how the transition went, what slipped and how the vendor responded.
- Ask whether the reports match the client's own numbers, and who found the last billing error.
- Ask how a missed target was handled, and whether the account lead has stayed the same.
- Ask what they would change in the contract if they signed again.
How Long Does Onboarding Take?
It depends on your payers, your systems and the size of your open A/R, so a vendor that quotes a number before it sees your enrollment status is guessing. Ask instead for a dated plan, with a named owner on each line, and hold the vendor to it.
| Phase | Work | Date to ask for |
|---|---|---|
| Agreement | BAA and service agreement signed; payment instructions set | Signature date |
| Access | Named accounts, two-step login and role access provisioned in your systems | Date each system is live |
| Enrollment | Payer portal access, ERA and clearinghouse set-up, any EFT changes | Date each payer is confirmed |
| Open A/R | Transfer of open accounts and notes, and a first work list | Date the list is delivered |
| Go-live | Claims, posting and denial work running on the new process | Cutover date |
| Review | First reports checked against your numbers; adjustments agreed | First review date |
The mechanics of moving from one vendor to another are in how to switch billing companies.
Can a Billing Partner Work Inside Our Existing EHR?
Yes, and most should. Ask which EHR and which clearinghouse the vendor has used in production for an organization like yours, and how access will be set up for each user. The answer "we work with everything" tells you nothing.
Our approach is to align each EHR, clearinghouse and payer portal workflow with verified team experience, standard claim validation, reconciliation controls and performance monitoring. Ask any vendor for the equivalent: who has done the work, how claims are checked before they leave, how payments are reconciled and what is monitored. Browse EHR guides for the systems we cover.
Who Owns the Data and the Claims History?
You do. Your patient accounts, claims history and remittance files belong to your organization, and the contract should say so. The vendor owns its own tools and methods. Make the contract list what comes back at exit and in what format. The detail, including the HIPAA return or destruction rule, is in the safety guide's section on what happens if you leave.
What Red Flags Show up in Billing Company Proposals?
Red flags in a proposal are commercial and procedural. The security red flags are in the safety guide. Look for these:
| Red flag | Why it matters | Ask instead |
|---|---|---|
| A promised result before it has seen your data | No one can forecast results without your baseline | How would you set the baseline, and what would you commit to once it is agreed? |
| Fee described only as a percentage, with no definition | The fee base decides what you pay | Please define collections, refunds and old A/R in the fee schedule |
| A long term with automatic renewal and a termination fee | It takes away your remedy if service slips | What are the notice period, the minimum term and the exit fee? |
| "We work with every EHR" | No named experience means no evidence | Which three systems have you run in production, and for whom? |
| Reference contacts relayed through the vendor | You cannot test them | May we call the client's finance lead directly? |
| No sample reports | You cannot see what you will receive | Please send the report pack with definitions |
| No named account lead | Accountability is unclear | Who will run our account, and what is their notice obligation? |
| Pressure to sign before the scorecard is finished | The decision skips your own process | Can we have a decision date that follows the RFP timeline? |
How Does Nucleus Align Respond to an RFP?
We answer RFPs and scorecards like any other vendor. Our team has billed for US practices since 2018, and we serve hospitals, emergency departments and freestanding ERs, urgent care networks, large groups and health systems. Our lead expertise is No Surprises Act billing and IDR disputes, and hospital and facility billing on the UB-04, with professional claims on the CMS-1500.
The figures we state are a 95% clean claim rate, a 97% client retention rate, a 25% average revenue lift and 15 to 20% of revenue recovered from denials and old A/R, with an average client tenure of 4.2 years. Claims go out within 24 hours of charge entry and denials are worked within 48 hours. Billing is 4 to 8% of collections, as set out on the pricing page.
Our team is offshore, working from Vancouver, BC, Dubai, UAE and Islamabad, PAK, with a US registered office in Richmond, KY. If you are building a shortlist, book a call and we will answer the scorecard questions in writing.
Billing Partner RFP and Scorecard Checklist
- Scope is written: entities, sites, payers and services to outsource and to keep
- Baseline numbers are pulled: volume, A/R aging, denials by reason, charge lag and current cost
- The RFP package is aggregate or de-identified, and a BAA is signed before any account-level sample is shared
- Every vendor receives the same package, questions and deadline
- Scorecard weights are set before proposals arrive, and the minimum score per criterion is agreed
- Two people score each vendor independently before pricing is opened
- Each finalist walks through a real hospital or ED workflow, not a general description
- NSA and IDR deadline tracking, fee handling and case-level measures are tested if you have out-of-network volume
- The fee base, setup fees, extras and termination fees are written out and compared on a like-for-like basis
- Service levels have definitions, dates and remedies
- Two or three references are called directly, and the questions focus on problems
- A dated onboarding plan with named owners is attached to the proposal
- Counsel reviews the final agreement and the BAA
- 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
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 choose a medical billing company?
Write your scope, pull your baseline numbers, send every vendor the same RFP, score answers on a fixed scorecard before looking at the fee, then interview finalists and call references. Review the contract last, with counsel. Set a minimum score on each criterion as well as a total.
02What questions should I ask a billing company?
Ask about experience with your care settings, how deadlines for NSA disputes are tracked, who the security and compliance officers are, where payments go, which systems the team has used, what reports you receive, turnaround on denials, the onboarding dates and the full fee schedule.
03What should a billing RFP include?
Include your scope, aggregate volume and payer data, systems, required deliverables, NSA scope, security and financial controls, reporting needs, transition plan, pricing format, exit terms, and the scorecard with its weights and the decision date. Send no patient-level data in the package.
04What KPIs and SLAs should be in the contract?
Define charge-to-claim time, rejection correction time, denial response time, payment posting time, report content and dates, responsiveness, and key personnel, each with a written definition and a remedy for repeated misses. Add the KPI formulas so both sides calculate them identically.
05How do I check a billing company's references?
Ask for two or three references like your organization, call them directly, and ask what went wrong and how it was fixed. Check whether reports match the client's own numbers, whether the account lead stayed, and what they would change in the contract.
06What experience should a billing partner have with hospitals?
Look for institutional claim experience: UB-04 bill type, revenue codes, patient status, condition and occurrence codes, payment reconciliation and denial management across inpatient, outpatient and emergency care. Have the vendor walk through an actual workflow, with a named lead for your account.
07How do billing companies charge?
Most charge a percentage of collections. Others charge a flat monthly fee, a fee per claim or a hybrid, with setup and extras on top. Get the fee base defined in writing. Our billing is 4 to 8% of collections and credentialing is $150 to $300 per application, charged separately.
08Should a billing partner have NSA and IDR experience?
Yes, if you bill out-of-network emergency or facility services. Open negotiation and IDR have short deadlines counted in business days. Ask who tracks each deadline, how disputes are chosen, who pays the fees, and which case-level measures are reported, such as decision win rate and award-to-offer ratio.
09What red flags show up in billing company proposals?
Watch for promised results before seeing your data, a vague fee base, long auto-renewing terms with exit fees, no named systems experience, references relayed by the vendor, no sample reports, no named account lead, and pressure to sign before your scorecard process is finished.
10How long does onboarding take?
It depends on your payers, systems and open A/R, so ask for a dated plan instead of a number. The plan should list signature, access, enrollment, open A/R transfer, go-live and first review, each with a named owner and a date.
11Can a billing partner work inside our existing EHR?
Usually yes. Ask which EHR, clearinghouse and portals the team has used in production for a similar organization, how user access will be provisioned, and how claims are validated and payments reconciled. Reject a vague claim to work with everything.
12Who owns the data and the claims history?
You do. Your claims history, patient accounts and remittance files belong to your organization, and the contract should say so and list what is returned at exit, in what format, and by when. The vendor keeps its own tools and methods.
Talk to a Billing Lead.
A 20-minute call about your payers, volume and setup. Monday to Friday, 9am to 5pm Eastern.