Billing your patients and payers is the only way you make money as a provider, but billing also comes at a cost—and some clinics using an RCM service pay a higher price than others. I’m not just talking about blatantly high rates. While rates as high as 12-15% should make you run for the hills, low rates of merely 3-4% are also cause for concern. As noted in this Pulse article, low rates often indicate incomplete RCM services. Furthermore, some RCM service vendors advertise these low percentages only to adjust your rate when it comes time to sign a contract, or they work in hidden fees that wind up costing you big. Let’s dig into a few of the ways RCM service vendors pull a billing bait-and-switch:  

10 Signs Your Current Physical Therapy Software is Bad for Business - Regular Banner10 Signs Your Current Physical Therapy Software is Bad for Business - Small Banner

Service Tiers

If you watch television (and haven’t yet switched to an Apple TV), you know TV providers offer different packages. You can get a good deal on the basic package—a seemingly-solid 150-ish channels—but if you want ESPN, you’ll have to pay extra. More sports channels? Get ready to fork over more money. NFL Sunday Ticket? Tack on a few more dollar signs. HBO, too? Might as well hand over your first-born child. While you may have come to expect this kind of nickel-and-dime maneuver from communications companies, you don’t necessarily anticipate it with your RCM vendor—but you should. Sure, you can get a low rate—but you’re going to get big gaps in service. Typically, RCM vendors with bargain-bin prices will charge more for additional services, including:

  • Patient collections
  • Claims processing
  • Statement forms
  • Fielding incoming calls from patients
  • Payer correspondence
  • Credentialing
  • Ongoing education
  • Policy assistance
  • Monthly A/R reviews

Clearly, if the rates are low, your service package expectations should be, too.

Rate Adjustments  

Location, location, location: That’s the name of the game when it comes to real estate, but it applies to RCM services, too. Vendors that don’t offer a flat rate for all providers can vary their rates greatly based on a number of factors—like the state in which you practice, your payer mix, and the services you provide. Thus, an RCM vendor might advertise a rate of 4%, but after that vendor performs an evaluation of your clinic, its offer may come in way higher.

Hidden Fees

Of course, your RCM vendor deserves to get paid for the service it provides. From claims processing to payment posting, there’s a lot of work being done behind the scenes—even for patient payments. However, what you’re expected to pay for that work should be clear as day. The above-cited Pulse article warns providers to look out for hidden fees and charges, including:

  • Non-refundable, upfront deposits and startup fees
  • Deposits that are conditional upon a set implementation timeframe
  • Charges per order—for both entered and received orders
  • Additional fees for training, implementation, and travel
  • Lockbox or bank agreements that have not been clearly disclosed
  • EDI, software, and hardware costs

Additionally, watch out for vague definitions in vendor contracts. You may think you know what services you’re paying for, but if the terms aren’t clear-cut, you could still be getting short-changed or over-charged.

Contracts and Collections

Be skeptical of RCM vendors that claim they can help you achieve a higher reimbursement rate. Unless the vendor is negotiating your contracts, too, you’re only going to receive your contractual reimbursement, which likely falls well below the RCM service vendor’s claim. Plus, you can’t go higher than 100%—and you should already be collecting at 100% of your allowed reimbursement.

Furthermore, while a few RCM services can act as consultants during contract negotiations, that’s not realistic for single-provider—or certain multi-provider—practices. Even if the consultant is able to negotiate better terms on your behalf, you’ll probably spend twice as much on the service as you’d make in increased payments over the life of the contract. Instead, handle your own contract negotiation like a boss; we’ve got tons of advice on how to help you make a plan and take action the next time you tango with your payers.


While these are some of the most common ways RCM vendors can mislead providers, they certainly aren’t the only ones. To protect yourself and your practice—and make sure you get the best service for your particular needs—you’ll need to do your research: check company websites, seek word-of-mouth recommendations, and ask sales reps plenty of questions before you sign on any dotted lines.

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