Due Diligence Checklist
4 Questions to Ask Your Medical Billing Service
7.5-9%
Industry true cost of billing
~6 of 100
Claims lost or never paid
Attrition + fee
How to calculate your true cost
The fee on your invoice is only part of what you're paying. Claims that are never submitted, rejected and not recovered, or quietly written off add up to a hidden cost that most specialists never see. These five questions will help you understand what your billing service is actually delivering and calculate the true cost of your billing.
Q1
How do you confirm that every claim I generate has actually been submitted?
Most billing services process in bulk and assume everything goes through. But claims can fail silently due to system errors, missing fields, or transmission failures. If your billing service cannot show you proof that every single claim was submitted, you may be losing revenue without knowing it.
Benchmark: ~2 in every 100 claims never submitted
Q2
What percentage of submitted claims are rejected due to data or coding errors?
These are rejections caused by incorrect item numbers, invalid referral details, mismatched patient data, or other preventable errors. A good billing service should be catching these before submission, not after. This number reflects the quality of their pre-submission checks.
Benchmark: ~8 in every 100 submitted claims
Q3
What percentage are rejected for clinical or eligibility reasons outside your control?
Some rejections are unavoidable - a patient's Medicare eligibility has lapsed, a fund doesn't cover a particular item, or a clinical rule blocks the claim. These are outside the billing service's control, but they should still be tracked and reported so you can make informed decisions.
Benchmark: ~4 in every 100 submitted claims
Q4
Of all rejected claims, what percentage do you successfully recover and get paid?
Rejections are inevitable. What matters is what happens next. A billing service that simply writes off rejected claims is costing you money. Ask how they track, follow up, and recover rejected claims - and what percentage they actually get paid.
Benchmark: ~4 of 12 rejections never recovered
Q5
Now you can calculate your true billing cost
Add together the percentage of claims that are lost through non-submission, unrecovered rejections, and write-offs. This is your attrition rate. Now add your billing service's fee percentage on top. The result is your true cost of billing - and it's almost always higher than the number on your invoice.
Benchmark: Attrition % + effective fee %
Why these questions matter
Most billing services only report on what they've processed. They don't report on what they've missed, lost, or written off. Asking these questions forces transparency and gives you the data you need to compare services on an equal footing.
FreshClaim · Australian inpatient billing
We built FreshClaim to solve these problems at the source.
FreshClaim tracks and logs every claim from the moment it's generated to the moment it's paid. We never write off a claim without your explicit approval, and we follow up on every rejection until it's resolved or you decide to stop. Every claim has a full audit trail, and you can see exactly where your money is at any time.
2.85%
Fee
99.7%
Approval rate
3.15%
True cost
$5,100
Saved per $100k
