Most medical billing companies charge 7.99% of collections or less. In Tebra's 2026 Medical Billing Benchmark Report, a survey of 190 respondents from U.S. billing companies fielded December 1 to 17, 2025, 63.0% of firms priced at that level and 28.0% used a model that is not a percentage of collections.
The same report found that 39.0% of firms always or often add a setup fee. A practice manager comparing quotes needs both numbers, plus several others that sit behind the headline rate.
What the fee distribution looks like
Tebra asked billing companies what percentage of collections they charge. The table shows the share of all surveyed firms in each band, including the firms that use another pricing model. Tebra's table has no row for 9.00% to 9.99%.
| Fee as a share of collections | Share of surveyed billing companies |
|---|---|
| 4.99% or less | 12.0% |
| 5.00% to 5.99% | 19.0% |
| 6.00% to 6.99% | 16.0% |
| 7.00% to 7.99% | 16.0% |
| 8.00% to 8.99% | 5.0% |
| 10.00% or more | 4.0% |
| Non-percentage model | 28.0% |
Source: Tebra, 2026 Medical Billing Benchmark Report, 190 respondents, fielded December 1 to 17, 2025. Base: all surveyed billing companies.
Adding the first two rows, 31.0% of firms charge under 6.00%. Adding the first four rows gives 63.0% under 8.00%. Only 9.0% charge 8.00% or more. Tebra reports no median or mean rate, so the bands are the best guide.
The dollar gap between bands is larger than it looks. On $1,000,000 in annual net collections, a 5.00% fee costs $50,000 and an 8.00% fee costs $80,000. That $30,000 difference is arithmetic from the bands, not a figure from Tebra. Confirm whether the percentage applies to net collections or gross charges, because the base changes the bill.
James Edwardson, a practice management consultant, wrote in Medical Economics on June 25, 2026 that a 4% quote and a 6% quote "are not comparable until you know what each includes."
Fees outside the percentage
Setup fees are common and rising. Tebra found that 39.0% of billing companies always or often charge one in 2025, against 38.0% in 2023. The share that never charges a setup fee fell from 36.0% in 2023 to 19.0% in 2025. By subtraction, the remaining 42.0% charge a setup fee sometimes or rarely. Tebra does not report setup fee amounts.
Add-on services are nearly universal. In 2025, 98.0% of firms offered services beyond core claims processing, up from 80.0% in 2023. Only 2.0% offered none, down from 20.0%. The most common add-ons were:
- Credentialing, offered by 72.0% of firms in 2025 and 57.0% in 2023.
- Benefit verification, offered by 56.0% of firms in 2025.
- Payer contract negotiation, offered by 49.0% of firms in 2025 and 36.0% in 2023.
- Prior authorization management, offered by 40.0% of firms in 2025.
Tebra does not say how firms price these services. Ask whether each one sits inside the percentage or on its own invoice line. A 6.0% quote with credentialing included can cost less than a 5.0% quote with credentialing billed separately.
Why rates sit where they do
Billing companies are small and under margin pressure. Tebra found that 48.0% of surveyed firms earned under $250,000 in annual revenue in 2025, up from 28.0% in 2023. Firms under $500,000 made up 68.0% of the sample, up from 42.0%. Firms with $1 million or more in revenue fell from 32.0% to 9.0%.
Margins are thin. In 2025, 54.0% of firms expected gross margins of 10.0% or less. The share expecting margins above 20.0% was 34.0% in 2022, 26.0% in 2023 and 15.0% in 2024. Tebra does not define gross margin. Also, 60.0% of firms expected gross revenue growth below 5.0%, and 54.0% reported more competition for new business.
Costs are rising for the same firms. Among respondents, 60.0% reported higher technology and software costs between 2023 and 2025, and 55.0% reported higher operations and staffing costs.
A separate count points the same way. GetPracticeHelp, a vendor directory, probed 6,295 company websites and found 12.1% of billing and revenue cycle sites dead. Coding and credentialing sites ran 7.0% to 8.0%. In its set of 2,448 billing vendors, nearly half have fewer than ten employees, and the median firm has ten people and was founded in 2015. That is the directory's own probe, published on KevinMD on June 15, 2026. A practice should write data return and notice terms into any contract.
Performance numbers to ask for
The fee matters less than what the firm collects. Tebra found a median first-pass acceptance rate of 85.0% among billing companies, and 44.0% of firms reached 90.0% or higher. In 2025, 46.0% of firms said denial rates rose over the prior 12 months, up from 28.0% in the earlier survey. Tebra's text labels that earlier figure 2024, while its summary table labels it 2023.
Firms named three leading drivers of rework:
- Eligibility and coverage issues, cited by 46.0% of firms.
- Documentation requests, cited by 42.0%.
- Duplicate claims and coordination of benefits, cited by 37.0%.
Ask a prospective firm for its first-pass acceptance rate on your specialty, and compare it with 85.0%. A firm at 90.0% on a 7.0% fee can cost less in lost revenue than a firm at 80.0% on a 5.0% fee.
System access also varies. Tebra found that 77.0% of billing companies work on client-owned systems or a mix of platforms. Only 28.0% use one billing system, and 12.0% use five or more. Firms named lack of control over system updates (37.0%) and limited reporting access (32.0%) as challenges with client-owned systems. Ask what reports the firm can pull from your system.
On technology, 59.0% of billing companies had adopted no AI tools and 73.0% did not use robotic process automation.
Sources
- Tebra, The state of the medical billing industry: 2026 Medical Billing Benchmark Report, survey fielded December 1 to 17, 2025
- Tebra, Week of June 6, 2026: Increase revenue + Cut denials with 2026 benchmarks, June 5, 2026
- Medical Economics, What independent practices get wrong when they hire a billing company, June 25, 2026
- KevinMD (GetPracticeHelp), 1 in 12 medical billing companies just vanished, June 15, 2026
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