ClaroClaim Blog

Your medical practice works hard to provide quality patient care, but if your billing vendor isn’t pulling their weight, you could be losing thousands of dollars every month. The harsh reality is that many healthcare providers unknowingly partner with billing companies that underperform, leaving significant revenue uncollected and opportunities missed.

So how do you know if your current billing vendor is costing you money? Let’s dive into the red flags and warning signs that indicate your billing partner might not be maximizing your practice’s financial potential.

Your Collection Rates Are Stagnant or Declining

One of the clearest indicators of an underperforming billing vendor is flat or declining collection rates. If your collection periods haven’t improved over the past year: or worse, have gotten longer: that’s a major red flag.

A competent billing vendor should demonstrate measurable improvements in how quickly they collect outstanding payments. Industry benchmarks suggest that medical practices should see collection rates of 95% or higher for clean claims, with most payments collected within 30-45 days of submission.

If your vendor can’t show you month-over-month improvements in these metrics, they’re likely leaving money on the table. Your accounts receivable aging report should show a decreasing trend in older receivables, not a growing pile of unpaid claims gathering dust.

They’re Still Relying on Manual Processes

In 2025, there’s simply no excuse for a billing vendor to rely heavily on manual processes. If your billing company is still manually entering patient information, hand-coding claims, or using outdated software systems, they’re creating unnecessary bottlenecks that cost you money.

Modern medical billing should leverage automation to minimize human error and maximize accuracy. Automated eligibility verification, claims scrubbing, and denial management systems can dramatically improve your revenue cycle performance.

Ask your vendor about their technology stack. If they can’t clearly explain how they use automation to streamline processes, that’s a problem. Manual processes are not only slower and more error-prone: they’re also more expensive, and those costs get passed down to you.

Revenue Recovery Rates Are Below Industry Standards

Here’s a sobering fact: companies typically lose 1-3% of their revenue due to mismatches between contracted terms and actual billing. If your billing vendor isn’t actively identifying and recovering these losses, they’re essentially leaving your money on the table.

Your vendor should have robust processes for identifying underpayments, tracking denied claims, and pursuing outstanding balances. They should provide regular reports showing how much revenue they’ve recovered through appeals, resubmissions, and follow-up activities.

If you’re not seeing evidence of active revenue recovery efforts, or if your vendor can’t provide clear metrics on how much money they’ve reclaimed for your practice, that’s a red flag. A good billing company doesn’t just submit claims and hope for the best: they actively work to maximize every dollar owed to your practice.

Poor Claims Management and Follow-up

Effective claims management goes beyond just submitting claims to insurance companies. Your billing vendor should have systematic processes for tracking claims status, identifying rejections and denials, and taking appropriate action.

If your vendor isn’t providing detailed reports on claim submission rates, denial rates, and resolution times, you’re flying blind. You should receive regular updates showing:

• First-pass acceptance rates
• Common denial reasons
• Time to resolution for denied claims
• Percentage of claims requiring resubmission

Without this visibility, you have no way of knowing whether your vendor is properly managing your claims or letting potential revenue slip through the cracks.

Lack of Transparency in Reporting

Speaking of visibility, transparency is crucial when evaluating billing vendor performance. If your vendor provides only basic monthly summaries without detailed analytics, they might be hiding poor performance.

You should receive comprehensive reports that break down your revenue cycle performance by insurance carrier, procedure code, provider, and time period. This level of detail allows you to identify patterns and opportunities for improvement.

Your billing vendor should also provide real-time access to key metrics through online dashboards or portals. If you have to wait weeks for basic performance data, or if reports are consistently late or incomplete, that suggests operational problems that could be impacting your revenue.

Inadequate Patient Collections

Many billing vendors focus primarily on insurance collections while neglecting patient responsibility portions. This is a costly mistake, especially with the rise of high-deductible health plans that shift more financial responsibility to patients.

Your vendor should have robust processes for collecting patient copays, deductibles, and coinsurance: ideally at the point of service. They should also provide patient-friendly payment options, including payment plans and online payment portals.

If your patient collection rates are consistently below 60-70%, or if your vendor doesn’t actively pursue patient balances, you’re missing out on significant revenue. Patient collections should be an integral part of your revenue cycle strategy, not an afterthought.

Technology Integration Issues

Your billing vendor’s systems should integrate seamlessly with your practice management software and electronic health records. Poor integration creates data silos that prevent automated reconciliation and increase the likelihood of billing errors.

If your staff is manually transferring data between systems, or if there are frequent discrepancies between your EHR and billing reports, that’s a sign of integration problems. These issues not only create inefficiencies: they also increase the risk of coding errors and missed charges.

Inconsistent Communication and Support

Professional communication is essential for a successful billing partnership. If your vendor is difficult to reach, provides inconsistent updates, or doesn’t respond promptly to questions and concerns, that poor service likely extends to how they handle your claims.

You should have regular, scheduled check-ins with your billing vendor to review performance metrics and discuss opportunities for improvement. If communication is sporadic or if you’re always the one initiating contact, that suggests your account isn’t receiving the attention it deserves.

Making the Switch to Better Billing

If you’re recognizing several of these warning signs in your current billing relationship, it might be time to consider making a change. The right billing partner should be transparent about their processes, provide detailed performance metrics, and demonstrate consistent improvement in your revenue cycle performance.

At ClaroClaim, we believe in full transparency and accountability. Our clients receive detailed analytics, real-time reporting, and dedicated support to ensure every dollar owed to their practice is collected efficiently.

Don’t let an underperforming billing vendor continue to cost your practice money. Take the time to evaluate your current partnership honestly, and remember that your billing vendor should be an asset that improves your bottom line, not a cost center that leaves money on the table.

The financial health of your practice depends on choosing the right billing partner. Make sure yours is working as hard for your revenue as you are for your patients.