Four things in a proposal each predict a specific later problem: a promised collection rate, undefined "collections", no monthly minimum, and silence on post-termination A/R. None is disqualifying on its own, and all four together describe a bad arrangement.
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 modeled 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 practice.
Ask who actually works denials
Submission is largely automated; denial work is where the money is and where the labor cost sits. A proposal that describes claim submission in detail and denials in a sentence is telling you where the effort goes.
Ask for the ratio of staff on submission versus follow-up, and what a denial workflow looks like end to end.
Get the reporting sample before signing
Ask for an anonymized monthly report from a real client. If it counts denials rather than grouping them by cause, and shows aged A/R without naming the unrecoverable portion, that is the visibility you are buying.
Reporting is far easier to evaluate before the relationship than to renegotiate inside it.
Read the termination clause first
Notice period, data return format, and who works claims submitted before the end date. Those three clauses determine what leaving costs, and they are written when you have leverage rather than when you need it.
Common questions
- Should a billing company guarantee a collection rate?
- Be cautious. Collection rate depends on your payer mix, coding and documentation as much as their work, so a guarantee usually means the definition is doing the work.
- What does "collections" mean in a billing contract?
- It has to be defined. Gross receipts, net of refunds, including or excluding patient payments and credit balances — each produces a different fee on identical performance.
- Is no monthly minimum a good sign?
- Not necessarily. It can mean the vendor has no floor of committed effort, which shows up as your small account being worked last.
- What happens to my A/R if I leave a billing company?
- Whatever the contract says. If it is silent, the outgoing vendor has little incentive to work claims they may not be paid for.
- What else should I ask before signing?
- Who works denials versus who submits, what reporting you receive, whether they reconcile to your bank, and what systems and data you retain.
Denials Piling Up?
We handle the revenue cycle end to end — coding by certified coders, claim submission, denial management and appeals, and A/R follow-up, with six reported numbers every month.