When it comes to old Accounts Receivable (AR) and denial management clean-up, medical providers often face two common billing structures:

Percentage of Collection (30–35%)

Fixed Monthly Fee (FTE-based)

Each has its own limitations. The percentage model, while performance-driven, often leads to ignored claims under $100 since they’re not profitable for billing companies—despite many old AR claims falling in this bracket. On the other hand, the fixed fee model may reduce the motivation to aggressively follow up on claims, potentially leading to higher write-offs and lost revenue for providers.

The Optimal Approach? A Hybrid Fee Model.
A combination of both models—base fixed fee plus a small performance-based percentage—ensures balanced incentives. This way, billing partners are motivated to resolve all claims, large or small, while practices benefit from predictable costs and improved cash flow. A well-structured hybrid model delivers better results, faster collections, and maximized recovery on old AR.