Medical Billing Company Contracts: What to Know

Hiring a medical billing company can be a game-changer for your healthcare practice. From improving collections and reducing claim denials to streamlining administrative tasks and ensuring compliance, outsourcing billing responsibilities allows providers to focus more on patient care and less on paperwork. However, one critical area that’s often overlooked in the excitement of onboarding a billing partner is the contract—the legally binding agreement that governs the relationship between your practice and the billing service provider.

At Thrive Medical Billing, we believe transparency is the foundation of a successful partnership. Whether you’re signing your first billing contract or switching providers, understanding the key components, terms, and potential red flags in a medical billing company contract is essential.

In this article, we’ll walk you through everything you need to know before signing on the dotted line.

Why the Contract Matters

A medical billing company contract defines the scope of work, responsibilities, pricing, data ownership, compliance requirements, and termination conditions. It's the document that holds both parties accountable and ensures mutual understanding.

Poorly written or unclear contracts can lead to:

• Hidden fees

• Disputes over services

• Data access issues

• Long, costly termination processes

• Compliance violations

Taking the time to understand the contract helps protect your practice from unnecessary risks.

Key Elements of a Medical Billing Company Contract

Here are the core components to look for and analyze when reviewing a billing services agreement:

1. Scope of Services

The contract should clearly outline what services are included. Some medical billing companies offer full-service revenue cycle management, while others provide a more limited menu of services.

At Thrive Medical Billing, our standard contracts typically include:

• Insurance verification and eligibility checking

• Coding and charge entry

• Claims submission and resubmission

• Denial management and appeals

• Payment posting and reconciliation

• Accounts receivable follow-up

• Monthly reporting and performance analysis

• Patient billing and support

Make sure the contract details each responsibility to avoid misunderstandings down the line.

2. Pricing and Payment Terms

A major part of any contract is how much the services will cost and how billing will be structured. Common pricing models include:

• Percentage of collections (most common)

• Flat monthly fee

• Per-claim fee

Thrive Medical Billing typically uses a transparent percentage-based model, where our earnings are directly tied to how much we collect on your behalf. Be sure your contract specifies:

• The exact percentage or rate

• What services are included in that rate

• Any additional or optional service fees

• Payment schedule (monthly, bi-weekly, etc.)

Also, be cautious of unclear or hidden fees, such as extra charges for reports, software access, or termination.

3. Performance Metrics and SLAs

A professional medical billing company should be willing to guarantee certain performance levels. This could be in the form of service level agreements (SLAs) or expected benchmarks, such as:

• Clean claim rate

• Denial rate threshold

• Average days in accounts receivable

• Collection percentage increase over time

At Thrive Medical Billing, we offer custom benchmarks tailored to your practice’s specialty and volume. Setting clear expectations helps both parties stay aligned on goals and outcomes.

4. Software and Technology Access

If the medical billing company uses its own billing software or integrates with your EHR, your contract should detail:

• Which software platform will be used

• Whether your team will have login access

• Data security protocols and HIPAA compliance

• How data is stored and backed up

Thrive Medical Billing ensures complete transparency and compliance. We integrate seamlessly with most major EHR platforms and offer 24/7 secure access to performance dashboards and reports.

5. Compliance and Liability

Billing involves handling protected health information (PHI), so your contract must address HIPAA compliance and define liability in case of errors, breaches, or audits. This section should include:

• Confirmation that the medical billing company is HIPAA-compliant

• Proof of insurance and business licensing

• Responsibility for coding errors or submission mistakes

• Audit response processes and support

Thrive Medical Billing includes business associate agreements (BAAs) in all contracts and follows industry best practices to maintain strict compliance standards.

6. Data Ownership and Access

Who owns the billing data? What happens to your patient and financial records if you decide to terminate the contract?

You must ensure the contract:

• Confirms your practice retains full ownership of all billing data

• Grants you access to your data at all times

• Outlines how data will be returned upon termination

• States the format in which data will be provided

At Thrive Medical Billing, we firmly believe your data belongs to you. We provide easy access and guarantee a smooth, secure handover if needed.

7. Duration and Termination Clauses

Some contracts lock practices into long-term agreements that are difficult or expensive to exit. Be cautious of contracts with automatic renewals or excessive penalties.

Check for:

• Contract length (typically 12 to 24 months)

• Termination notice period (usually 30–90 days)

• Early termination fees, if any

• Exit process and data transfer terms

Thrive Medical Billing offers flexible, fair contracts. We don’t believe in holding clients hostage—our performance and value speak for themselves.

8. Support and Communication Protocols

A good medical billing company should offer ongoing support. Your contract should specify:

• Your assigned point of contact or account manager

• Hours and methods of communication

• Expected response times

• Frequency of meetings and report delivery

At Thrive Medical Billing, we assign a dedicated account manager to every client and offer prompt support via phone, email, or virtual meetings.

Red Flags to Watch Out For

Not all contracts are created equal. Here are some warning signs to be cautious about:

• Unclear pricing with lots of vague “additional fees”

• Limited data access or unclear ownership

• No mention of HIPAA compliance or data protection measures

• Lengthy automatic renewals with high exit costs

• Overpromising results without clear benchmarks or SLAs

• No reference to support or customer service protocols

If any of these red flags appear in the contract, ask for clarification—or walk away.

Tips for Negotiating a Better Contract

• Ask questions: Never hesitate to clarify confusing terms.

• Get legal review: Have a healthcare attorney review the contract before signing.

• Compare multiple companies: Don’t settle for the first option. Evaluate based on quality, transparency, and references.

• Focus on value, not just price: A cheaper company isn’t necessarily better—look at results, support, and long-term ROI.

• Request performance reports: Ask potential partners to provide data on claim acceptance rates, collection improvement, and denial trends.

Why Choose Thrive Medical Billing?

At Thrive Medical Billing, our mission is to deliver transparent, effective, and customized billing services for every client. We don’t just provide great billing—we build lasting partnerships rooted in honesty, integrity, and results.

Our contracts are:

• Clear and concise

• HIPAA-compliant

• Flexible and scalable

• Performance-driven

• Client-first in every detail

From solo practices to multi-specialty clinics, we support your growth with reliable, expert billing solutions designed for long-term success.

Final Thoughts

A medical billing company contract is more than just paperwork—it’s the foundation of a business partnership that directly impacts your revenue, compliance, and patient satisfaction. Taking the time to understand every clause, clarify expectations, and ensure transparency is critical.

Whether you’re just beginning to outsource billing or you’re exploring a better partner, Thrive Medical Billing is here to help you navigate the process with confidence. Reach out to us today for a free consultation and contract review.