How do I know if my medical billing company is doing a good job?

It's tempting to judge a biller by the deposit total and by how calm the billing lead sounds on the phone. Neither tells you much. Deposits can hold steady for months while old claims age past the filing deadline and lost money gets posted as contractual adjustments, where nobody goes looking for it.

Ask for the same one-page report every month, on a fixed date, pulled from the billing system rather than typed up by hand. The table lists eight lines. Start with the adjusted collection rate: payments net of credits divided by charges net of contractual adjustments, measured over 12 months. AAFP puts the floor at 95% and says top performers collect at least 99%. Read it next to days in A/R and the share of A/R older than 90 days, because a healthy average can hide a pile of old claims. AAFP tells practices to watch A/R over 120 days for exactly that reason.

Then ask for the adjustments split two ways: contractual, and everything else, such as timely filing, missing authorization, small balances and bad debt. AAFP calls misapplied adjustments one of the most common posting mistakes, because lumping the two together makes collections look better than they are. HFMA wants bad debt and unnecessary write-offs under 3% of expected collections. Give timely filing its own line. Medicare allows one calendar year from the date of service and Texas gives providers 95 days to file with an HMO or insured PPO, so every late-filing write-off is a claim that sat untouched for months.

Then run the cash test. Every payment the biller posts should match a deposit in your bank account, and the monthly totals should tie to the dollar. Medicare won't pay a billing agent whose fee depends on the amount billed or collected, and when it does pay an agent, it pays in your name (42 CFR 424.73 and 424.80). A biller on a percentage of collections shouldn't be receiving your Medicare money at all. Keep the bank account, the clearinghouse account and every payer portal login in the practice's name, so changing billers never costs you access.

Write the scorecard into the contract: the report and its due date, read-only access to the billing system, a full data export if you leave, and a yearly coding audit. OIG's compliance guidance for billing companies recommends reviewing a valid statistical sample of claims at least once a year, before and after submission. The same guidance says OIG has long worried that percentage billing arrangements may increase the risk of upcoding. The liability doesn't move with the work: OIG notes that repaying an overpayment is generally the provider's responsibility. Ask for the audit results and for the credit balance report, which OIG suggests someone reviews monthly.

If two or three lines miss for a quarter, put it to the biller in writing with a date to fix it. If they can't produce the report at all, you have your answer.