Red Flags in a Billing Company Proposal

Proposals are written to win. These four features each predict a specific problem later, and each is visible before signing.

A promised collection rate

Nobody can promise this. Payment is decided by payers, and outcomes depend on your documentation, your payer mix, and your front desk as much as on the biller. Such a promise is either meaningless or hedged into meaninglessness in the contract. It also tells you what the vendor thinks you want to hear, which is the more useful signal.

Undefined collections

If the agreement says "percentage of collections" without defining collections, you will discover the definition on the first invoice. Copays taken at your own desk, capitation, and incentive payments are the usual disputes.

No monthly minimum

Counterintuitive, but a minimum protects you. Without one, a small practice pays too little to fund competent service — and the service adjusts to the fee rather than the fee to the service. A vendor with no floor has either not modelled the work or is planning to under-serve small accounts.

Silence on post-termination A/R

The clause you need most is the one nobody writes. If the contract does not say who works outstanding claims after notice, the answer in practice is nobody, and the loss is yours.

Two smaller ones

Clean claim rate quoted without a definition — almost always clearinghouse acceptance, which flatters everyone. And a single national percentage quoted without any mention of state variation, which suggests nobody has looked at whether the model is even available where you practise.