Outsourced medical billing for a physical therapy practice is usually priced as a percentage of collections. Industry articles commonly cite about 4% to 8% of collections, with per-claim and flat monthly pricing as alternatives. In-house billing costs whatever your practice spends on billing staff, benefits, software, and clearinghouse fees, plus the owner’s time. That figure varies too much between practices to quote a reliable average.

The useful question isn’t “what’s the going rate?” It’s “what does billing cost us, and what are we getting for it?” This guide covers both: the pricing models you’ll see in quotes, the costs practices tend to leave out, and a worked example you can redo with your own numbers.

The short answer: what PT billing typically costs

Billing model How it’s usually priced What drives the cost
Outsourced, percentage-based A share of collections; commonly cited as about 4%–8% Collection volume, scope of work, payer mix, minimums
Outsourced, per-claim A fixed fee for each claim submitted Claim volume; follow-up may be priced separately
Outsourced, flat monthly A set monthly fee for a defined scope The work included and the volume it assumes
In-house Wages, benefits, software, and clearinghouse fees Staffing level, turnover, and how much time the owner spends on billing

The 4%–8% range comes from vendor and industry articles, such as Physitrack’s in-house vs. outsourced comparison, which cites RCM Experts, and SPRY’s RCM pricing breakdown. It isn’t a survey-based benchmark. Treat it as a reference point for checking quotes, not a price you should expect.

How billing companies price their services

Percentage of collections

This is the most common model. The fee rises and falls with what the company collects, so the billing company has a reason to follow up on claims. Before comparing percentages, ask:

  • What does the percentage apply to? All deposits, insurance payments only, or patient payments too?
  • Do older claims count? Collections on balances that existed before the contract may be priced differently, or excluded.
  • Is there a monthly minimum? For a small or new practice, the minimum may matter more than the percentage.

A percentage arrangement is legal, but deposit control matters. HHS-OIG notes that a practice can pay a billing service a percentage of collections, but the billing service can’t receive Medicare payments into a bank account it alone controls. Our guide to outsourced physical therapy billing covers what stays with your practice after you outsource.

Per-claim fees

You pay a fixed amount for each claim submitted. This is easy to predict, but find out whether follow-up, denial work, and resubmissions are included or billed again. A per-claim price that covers only the first submission can look cheap while follow-up work goes undone.

Flat monthly fees

You pay a set fee for a defined scope. This is the most predictable model, but ask what happens when visit volume grows or the scope changes.

Charges outside the headline rate

Whatever the pricing model, ask for these in writing:

  • Setup or onboarding fees
  • Clearinghouse and software costs, and who pays them
  • Patient statements and postage
  • Credentialing and enrollment
  • Working historical A/R from before the contract
  • Appeals beyond a first resubmission
  • Fees when you leave, and how your data is returned

Our PT billing company pricing checklist lists the contract terms to confirm before you sign.

What in-house billing really costs

Most owners compare a billing company’s quote with one biller’s salary. That leaves out most of what in-house billing costs.

Wages. The U.S. Bureau of Labor Statistics groups medical coders under medical records specialists. It reports a median annual wage of $51,140 for that occupation in May 2025, with the lowest 10% earning under $37,000 and the highest 10% over $81,150. Your local market and the biller’s experience matter more than the national median.

Benefits and payroll taxes. In June 2026, benefits accounted for 30.0% of private-industry employer compensation costs, with wages making up the other 70.0%. That works out to roughly 43 cents in benefits for every dollar of wages. That’s an all-industry average, not a PT-specific figure, but it shows why salary alone understates the cost.

Software and clearinghouse fees. Your EMR may include billing, or billing may be an add-on. Clearinghouse pricing varies by vendor and claim volume. Pull the actual invoices.

Owner and manager time. Hours spent on payer calls, EOBs, and billing questions are a real cost even though they don’t show up on payroll. Value them at what those hours would otherwise earn the practice.

Coverage and turnover. If one person handles billing, a vacation or resignation stops claims and follow-up. The cost shows up later as aging A/R and missed deadlines.

A worked example: one practice, two models

This is a hypothetical practice with $50,000 in monthly collections. Every input below is an assumption for illustration. Replace each one with your own figures.

In-house:

Cost Assumption Monthly cost
Billing staff Half of one full-time employee’s time, at the BLS median wage $2,131
Benefits and payroll taxes Wages ÷ 0.70, using the BLS private-industry average $913
Billing software and clearinghouse Assumed $500
Owner time 8 hours at an assumed $100/hour $800
Total $4,344 (8.7% of collections)

Outsourced:

Cost Assumption Monthly cost
Billing company fee An assumed 6% of collections $3,000
Other vendor charges Statements and minimums, assumed $200
Work kept in-house Front-desk eligibility and copays, assumed $800
Total $4,000 (8.0% of collections)

In this example the two models cost about the same. That happens often, and it means cost alone shouldn’t decide. What decides is how much follow-up each model actually gets done: denials worked, older balances resolved, and claims that don’t sit unworked.

Change a few assumptions and the answer flips. A full-time biller makes in-house more expensive. A higher fee or a large monthly minimum makes outsourcing more expensive. Try it with your own numbers in our free outsourced vs. in-house billing cost worksheet. It runs in your browser, and nothing you enter is sent anywhere.

The cost that doesn’t show up on an invoice

The most expensive billing setup is often the one that looks cheapest: claims go out, but nobody works the denials or the older balances. Before calculating cost as a percentage of collections, check whether collections are lower than they should be.

Three numbers help:

  • A/R aging by payer. How much is over 60, 90, and 120 days, and is it growing?
  • Open denials. How many are unworked, and why were they denied?
  • Unbilled charges. Visits documented but not yet billed.

If those numbers are growing, a lower billing cost may just mean less work is being done. Use our physical therapy billing audit checklist to trace a sample from visit to payment and assign the findings. Our physical therapy denial management guide includes a free checklist for reviewing denied claims.

Questions to ask before you compare quotes

  1. What did billing cost us last month, counting staff time, benefits, software, and owner hours?
  2. How much A/R is aging, and how many denials are open?
  3. Which tasks do we want to keep in-house, and who will own them?
  4. For each quote, what does the percentage or fee apply to, and what costs extra?
  5. What happens to claims that were open before the contract started, and to our data if we leave?

If you’d like help working through those numbers, see our physical therapy billing services or book an introduction with our team.

Sources and further reading