Medical Billing Contract

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Medical Billing Contract

A Brief Introduction About the Medical Billing Contract

A Medical billing contract is a written agreement between a customer and a contractor or medical billing service provider. This agreement is crucial to protect both parties. In general, the billing service will provide the contract to the customer, but if you are a new billing service, you should understand what exactly needed in a medical billing contract. For writing a medical billing services contract, it is always better to consult a legal attorney, as you can save a lot of money in the future.

Who Takes the Medical Billing Contract?

This contract is a very important component for doing medical billing business. The contract defines the various activities of parties involved in the contract, such as customers and the medical billing service. Various activities include the roles and responsibilities of both parties, and other factors such as medical billing services, medical billing services fees and terms, etc. The main thing that the contract will define is the responsibilities of the client and the medical billing service.

Purpose of the Medical Billing Contract

The main purpose of this contract is to mention the various roles and responsibilities of both parties involved in the contract. In other words, the purpose of the contract is to ensure that all parties clearly understand the terms and conditions, and there is no confusion about it. When you develop a medical billing contract, you need to consider certain factors carefully, which may affect your contract in the future. So, for developing the contract, medical billing agencies require the use of some templates to customize and provide them for their clients to take care of billing.

In general, the medical billing template should be in such a way that it is neat, easy to read, easy to understand, and fill by your clients. The contract should at least have minimum information, which helps to be legally acceptable.

Contents of the Medical Billing Contract

Soon after you and your client agree to the pricing terms, you can create a written contract which includes the following contents:

Responsible parties – You should include the names of the parties, such as your name and your client name, along with the business name.

Effective dates – This shows the period of the contract and also includes the expiration date when it is a short-term contract.

Reimbursement – This is a crucial content in your contract, as it clearly explains the various factors such as fees, what happens when you not pay the fees or pay late etc. calculated based on per claim basis.

Responsibilities of your client – The client has to provide several important data to you, such as patient demographics, insurance identification, EOBs, and patient payments. When the medical billing service requests the client, the client has to provide all the above information.

Who completes the coding – In your contract, it is essential to mention the name of the person who is responsible for coding as soon as the contract data starts. According to the medical billing and coding definition, medical billing and coding employees are important for the success of healthcare agencies and providers. So, one should choose the experienced medical billing coder to do this work.

Who receives the insurance and patient payments – Some doctors produce the payments that will go directly to the billing service. Here it is the responsibility of the client to provide copies of all those payments to you.

Medical billing service responsibilities – The medical billing service responsibilities are to provide the processing of claims, follow-ups, patient standards, cash charges, reports, and other duties, etc.

Termination – Of course, the contract has to mention the end date, such as in a year, a month, etc. Thus, the contract includes the starting and ending dates. In general, a doctor will renew the agreement every year rather than creating a new agreement. It is allowed for both parties to go out of the contract within a certain time frame.

Software Compatibility – The contract also mentions the billing company has to use software for handling many fee schedules.

How to Draft the Medical Billing Contract?

To draft a good medical billing contract, you should follow certain tips such as using simple formats, using clear and direct words, using a professional language, mentioning the necessary details, and finally proofreading this contract. If you are searching for a simple format of contract, then refer to the sample medical billing contracts available on the internet.

[ Also Read: Medical Office Lease Agreement ]

Negotiation Strategy

Consult with an experienced attorney in the healthcare provider to help you make out some negotiations. Understand the terms, reimbursement rates, and the length of the contract and your market share before negotiating. Since this contract acts as a basis for the money that you receive from the provider for your work, you have to negotiate it carefully.

Benefits & Drawbacks of the Medical Billing Contract


  • The contract explains all the roles and responsibilities of both the medical billing service and the customer.
  • The contract allows only experienced medical coders or billers to translate health care services into medical claims. So if you have a doubt, how does medical billing works, here you will get the right answer.
  • The contract allows both parties to terminate


Though the contract explains the terms on how to do medical billing from home, it requires many educational qualifications, as well as you have to outline your fees for billing from home carefully.

What Happens in Case of Violation?

As already said, the contract doesn’t impose any strong law on terminating the contract. But when the parties violate rules of the contract, then they are strictly punished according to the law.

Thus, a medical billing services contract is crucial in any medical billing service. Medical billing professionals consider it an important agreement to know about the roles and responsibilities of all the parties, along with other terms such as pricing, etc. Thus, a good medical billing contract can avoid any possible problems in the future between different parties involved in it.