How to know if your medical billing company is underperforming
The easiest way to judge a medical billing company is not by this month's deposit.
Look at what is happening underneath it: aging A/R, unresolved denials, paid claims that may not match contracted rates, and encounters that still have not turned into claims.
A practice can have a perfectly respectable collection month while problems continue to build behind the scenes. A few large payments can mask older A/R. Paid claims can close without anyone checking the contracted rate. Denials can sit without a next action.
If you cannot get claim-level answers without turning it into a special project, you probably do not have enough visibility to evaluate the work.
Collections alone will not tell you how your biller is performing
Month-end collections matter, but they only tell you what came in.
They do not tell you what is stuck, what was written off, what paid short, or what never made it out the door.
A strong month could simply mean several large claims finally paid. A weak month could reflect payer timing even when the billing team is doing good work.
The same collection number can tell very different stories depending on what is happening in the underlying claims.
MGMA's July 28, 2026 Stat poll of 203 medical group leaders found 43% saying days in A/R were about the same as a year earlier, 32% saying they were higher, and 22% saying they were lower.
That is useful industry context, but it is not a score for your billing company.
A January 6, 2026 MGMA Stat poll of 288 respondents, also referenced in the July piece, found 48% of leaders naming denials and appeals as their largest source of revenue leakage.
Again, that does not tell you how your own biller is performing.
A better test is whether your billing company can explain what is happening in your own data, at the claim level, as part of normal reporting, not after days of pulling information together.
Basic billing visibility should be routine
You should not have to chase your billing company for the basic information needed to understand your revenue cycle.
At a minimum, regular reporting should make it possible to see:
- Claims submitted, accepted, denied, and paid
- Open denials, including age and next action
- A/R by payer and aging bucket
- Adjustment categories
- Charge lag
- Paid claims compared with expected allowed amounts
- How metrics such as first-pass rate are actually defined
A portal can be useful, but access to a dashboard is not the same as visibility.
If the detail cannot be exported or traced back to individual claims, you are still dependent on someone else's summary of what is happening.
Be careful with first-pass and clean-claim metrics because companies do not always define them the same way.
A clean claim may simply mean the payer accepted it for processing. It can still deny later or pay incorrectly.
Ask for the definition behind the number and, when possible, look at the result by payer.
MGMA has reported first-submission denial benchmarking around 7% to 8% over several years. That is not the same thing as a first-pass rate, and it should not be converted into an assumed 92% or 93% industry first-pass benchmark.
The definition matters.
Five signs your medical billing company may be underperforming
None of these signs proves that a billing company is doing a poor job on its own.
They are reasons to dig into the claims and see what is actually happening.
1. Reporting gaps
You ask a specific question and get a high-level answer instead of the underlying claims.
Repeat denials are not broken out by payer or reason. Paid claims cannot be compared with contracted rates.
When the detail is difficult to access, it becomes much harder to spot patterns or hold anyone accountable for follow-up.
2. Repeat denials and denials that sit
A denial-rate percentage is not enough.
Ask which denials are still inside an appeal window and which have already aged out.
For original Medicare fee-for-service, a redetermination generally has to be requested within 120 days of receiving the initial determination. Commercial and Medicare Advantage deadlines vary by payer and contract and may be shorter.
If the biller cannot tell you, by payer, which denials are still workable and what the next action is, follow-up may not be under control.
Repeat eligibility, authorization, or registration denials are another warning sign. When the same preventable problem keeps leaving the door every month, something upstream needs attention.
3. Paid claims nobody checks
A paid, zero-balance claim can still deserve a second look.
If the contract allows $145 and the remit reflects $119, that $26 difference could be valid, or it could be an underpayment.
The important question is whether anyone is routinely comparing paid claims with the expected contracted amount before those accounts disappear from view.
4. A/R that ages while collections look fine
Total days in A/R is an average, and averages can hide a lot.
Ask for aging by payer, the largest balances past 60 or 90 days, and the next action on those claims.
Credits sitting in A/R deserve attention too. If a workflow focuses only on debit balances, credits can remain unresolved.
Timely filing matters as well. For original Medicare fee-for-service, claims generally must be submitted within one calendar year of the date of service. Commercial payer limits vary.
Once a filing or appeal window closes, follow-up options become much more limited.
5. Charges that never dropped
Some revenue problems happen before a claim ever reaches the payer.
An encounter can sit because documentation is incomplete, a charge was never entered, or the claim was never created.
Those issues will not appear in a denial report because there is no claim to deny.
These problems do not automatically mean the billing staff is careless.
In smaller independent practices, good people can still be working inside a process that lacks visibility, consistent follow-up, or enough controls to catch the same issues every month.
You should be able to get a clear answer on a specific claim
Response time matters, but the more important issue is whether the billing team can give you a clear, specific answer when you ask about a claim.
If you ask why a $2,400 claim has been open for 70 days, the answer should include what happened, the last action taken, and what happens next.
"We are working the A/R" is not enough.
Clear claim ownership becomes especially important when deadlines are approaching or when a practice eventually changes vendors.
What to review before you decide to switch billing companies
Before replacing the billing company, get a clean picture of what is happening today.
Pull roughly 12 months of claims, remittances, denial reports, and A/R aging, then walk through a few real examples with whoever manages billing.
One denial, one paid zero-balance claim, one old receivable, and one encounter that never became a claim can tell you more than a polished dashboard.
Ask four questions:
- Which denials from the last 90 days still have a next action, and which do not?
- Can you show 10 recently paid claims next to the contracted allowed amount?
- Which payers hold the most A/R past 90 days, and what is the next action on the five largest claims?
- How many documented encounters from last month still have no claim, and how do you define first-pass rate?
If those questions can be answered clearly, you have something concrete to evaluate.
If they cannot, the first issue to solve may be visibility rather than the vendor relationship itself.
Switching vendors is a separate decision. The handoff has to protect open claims, old A/R, and continuity inside the current EHR.
Get the picture first.
When an independent review can help
An independent review can be useful when claim-level questions keep going unanswered or the same revenue-cycle issues continue to show up without a clear explanation.
You do not need to leave your current billing relationship just to understand whether there are gaps.
VeroRCM's free Revenue Leak Audit provides an independent look at areas such as claims, payments, denials, underpayments, appeals, and aging A/R.
It does not require you to change billing companies first.
Sometimes the review confirms that the current operation is working well. If it uncovers specific gaps, you can decide whether to address them with the existing team or consider a change with a much clearer understanding of the revenue cycle.
Common questions about billing company performance
How do I know if my medical billing company is underperforming?
Look beyond monthly collections.
Review aging A/R, unresolved denials, paid claims against expected contracted amounts, and encounters that never became claims.
A good billing company should be able to explain those areas with claim-level detail.
What are medical billing vendor red flags?
Common red flags include reporting that stops at collections, denials with no documented next action, paid claims that are never checked against contracted rates, old A/R with unclear ownership, and encounters that remain unbilled.
These are reasons to investigate, not automatic proof that the billing team is doing a bad job.
What is first-pass rate?
First-pass rate generally refers to claims paid on the initial submission without needing rejection, denial, correction, or resubmission, although definitions vary.
Clean-claim rate is different because an accepted claim can still deny later or pay short.
Always ask the billing company how it defines the metric before comparing results.
What is the most important metric when evaluating a billing company?
There is no single metric that tells the whole story.
Collections, denial rate, days in A/R, first-pass performance, payment accuracy, and follow-up all need context.
The best evaluation usually comes from combining the metrics with a sample of actual claims.
Start with the claims you already have
If you are not sure whether reporting gaps, sitting denials, unchecked paid claims, or aging A/R are sitting inside your current billing, VeroRCM's free Revenue Leak Audit can review your claims, payments, denials, underpayments, appeals, and aging A/R without requiring you to change companies first.