This week I watched a thread blow up in a therapist group. Someone asked a simple question: how much are you paying for billing these days, and is 5–7% normal?
The answers came in fast. 4%. 5%. 6%. 6%. 6% again. 7.5% "and worth it." 8.2% with the EHR and reception bundled in. Someone just got offered 2.7%. Someone else said zero, because she bills herself through her EHR and it costs her about thirty dollars a month.
And then one comment stopped me. A practice owner said she'd been paying 7% until she ended the contract over privacy violations. Only then did she find out how little work had been going into that monthly payment. She's still cleaning it up months later.
Every one of those therapists was doing the same thing: comparing a percentage. Almost none of them were asking what the percentage was actually telling them.
First, the straight answer
Yes, 5–7% is “normal”. Billing companies' own published pricing puts percentage-of-collections fees at roughly 4–10%, and most small practices land somewhere between 5 and 7. Under 4% usually means you're getting a narrower, more automated service. In that thread, 6% was the most common number by a mile.
So if you're at 6%, you're not being robbed. But you might not be getting what you think you're paying for, and that's the part of the conversation nobody's having.
The belief underneath the thread
Read those comments again and you'll see two camps. One says, "Worth every penny. Becoming a better biller isn't a good use of my time." The other says, "That's so much money. It's two clicks a day. Do it yourself."
They sound like opposites. They're not. Both camps believe the same thing: insurance reimbursement is the revenue, and the only question is how much it costs to collect it.
That belief keeps you staring at a line item when the real issue is the model.
Your billing fee is a mirror of your revenue model
Here's the reframe. Your biller's percentage is a tax on one specific thing: the portion of your income that has to pass through a payer before it reaches you.
Let's run it. Say your practice collects $20,000 a month from insurance. At 6%, you're paying $1,200 a month, or $14,400 a year. At 8%, it's $19,200. That's before the denials, the timely-filing write-offs, and the claims nobody chased. The specifics on where the money comes from when you are staring at declined credit cards and unpaid balances is a real question and when people opt to pay for billing help as insurance from errors they unfortunately find that rarely is there a guarantee.
Now the DIY math, because "free" isn't free. Say billing, eligibility checks, and denial follow-up take you three hours a week. At a $150 session rate, that's about $1,950 a month in clinical time you didn't sell. The software fee is small. Your time isn't.
Neither option is wrong. Both are the cost of running your whole practice through insurance. And if 100% of your revenue depends on payers, your biller's percentage, your reimbursement rates, and your denial rate together decide your margin. You don't control any of them.
What it's costing you to only ask "is my rate normal?"
When the only question is "is my rate normal," three things happen.
• You compare numbers that don't compare. One commenter said it best: apples to oranges. 6% of billed charges and 6% of collected funds aren't the same price. 6% for claim submission and 6% for credentialing, prior auths, denials, and patient balances aren't the same service.
• You stop auditing. "Mine has been at 6% for 15 years" can mean a great partnership. It can also mean nobody has looked at the denial rate since 2011. The owner who got burned at 7% didn't find out until she left.
• You never ask the bigger question: what would my practice look like if less of my revenue needed a biller at all?
In the group practice I run, the biggest margin gains didn't come from negotiating billing fees down. They came from restructuring services. Our cash-pay and contract work runs at 50%+ profit margins, compared to 20–30% on individual insurance sessions. That revenue has no claim to submit, no denial to chase, and no percentage to pay.
The pivot: six questions to ask your biller this month
Keep your biller. Keep billing yourself. Either way, get the real answer to these:
1. Is your percentage charged on collected funds or billed charges? Get it in writing.
2. What exactly is included? Eligibility and benefits verification, claim submission, denial management, appeals, patient balances and copays, credentialing, CAQH, reporting. List it.
3. What is my all-in annual cost on my actual collections, including setup, per-claim, clearinghouse, and "extra" fees?
4. What are my numbers? Ask for your clean claim rate, denial rate, and days in accounts receivable, every month.
5. Do we have a signed Business Associate Agreement, and who has access to my client data?
6. What happens when I leave? Who owns the data, how do I get it, and who works the open claims?
If your biller can't answer these clearly, the percentage was never the problem.
Then ask yourself one more: what percentage of my total revenue goes through a payer? If the answer is "all of it," your biller isn't your biggest risk. Your revenue model is.
If you want someone to look at the whole picture
This is what we do in a Practice Revenue Diagnostic. In 90 minutes, we look at your real numbers: what's generating revenue, what it costs to collect, where your margin is leaking, and where one cash-pay or contract offer would change the math. You leave knowing what's true about your practice, not just whether your rate is "normal."
One question to sit with
If you had to give up a third of your insurance caseload tomorrow, would you know exactly what you'd build to replace that revenue?
If not, that's the conversation worth having. Not the 6%.