Patient-billing quotes tend to come in one of two shapes. One is a percentage of every patient dollar the practice collects. The other is a platform fee plus a success fee on a defined slice of recovered dollars. They can land on nearly the same annual number and still charge for completely different things. This post is about telling them apart.
No vendor is named here. The comparison is about the pricing basis, not anyone's product.
What each basis charges for
A percentage of all patient payments is easy to read and easy to budget. It also applies to money the practice was going to collect anyway. Most patient cash comes from the first one or two statements, from patients who pay when asked. A fee on all collections taxes that money at the same rate as the balance nobody could get.
A success fee on recovered aged dollars charges only for the dollars that were at risk. If the balance was 60 or more days old when the vendor took it, and the vendor brought it back, the fee applies. If the vendor does not recover it, there is no fee. The practice keeps all of its 0-to-60-day collections without a cut.
Neither basis is dishonest. But they align the vendor to different jobs. A percentage of everything pays the vendor the same whether the aged book moves or not. A success fee on aged dollars pays the vendor only when it does the one thing the practice could not do alone.
A worked example
Take a practice collecting about $965,000 a year in patient payments, which is roughly what a practice taking in $80,000 a month adds up to over a year. Suppose about $187,500 of that year's cash is recovered from balances that were already 60 or more days old when placed, and the rest is ordinary statement cash.
At 3.5 percent of everything, the vendor's percentage fee is about $33,800 a year. Quotes on this basis usually carry a monthly fee as well; at $395 a month that is another $4,740, for roughly $38,500 a year. Most of the percentage sits on the roughly $777,500 the practice was collecting on its own.
At 6 percent of recovered aged dollars, the success fee is about $11,250 a year. Add a platform fee; at a $2,000-a-month tier, that is $24,000 a year. With a typical communications overage of about $1,500, the total is roughly $36,800 a year.
So the two quotes are about the same price. The difference is what the money buys. In the first case, the practice pays a percentage on its own statement cash and on the aged recoveries alike. In the second, $24,000 is a known platform cost and $11,250 exists only because $187,500 that was headed to an agency came back instead.
Consider the alternative for that $187,500. At an agency's 25 to 40 percent contingency, the practice would have paid $47,000 to $75,000 on the same recovered dollars. And per ACA International's benchmarking data as reproduced in trade sources, an agency typically recovers 17 to 21 percent of what it is handed over the life of a placement, so the recovered amount would likely have been much smaller in the first place.
The point of the arithmetic is not that one number is lower. It is that only one of the two quotes gets paid on the outcome the practice is actually buying.
Four definitions that make a success fee auditable
A success fee is only better if the practice can check it. Four terms have to be in the contract, in writing, before the first invoice.
Placement date. The date a balance entered the vendor's system. Everything else keys off it, so it has to be a recorded event in the vendor's ledger, not a date the vendor asserts later.
Age at placement. Whether a balance counts as aged is measured on the placement date, from the date of first patient statement, not from the date of service and not at the time of payment. If age is measured at payment, every slow payer drifts into fee scope and the practice ends up paying a success fee on its own statement cash.
Recovered dollars mean cash actually collected. Card payments and recorded external payments allocated to aged invoices, at face value. If a settlement discount was granted, the fee applies to the cash that came in, never to the portion written off. Non-cash adjustments are not recoveries.
Refunds and chargebacks credit the next invoice. A success fee is invoiced in arrears on cash received. If some of that cash goes back to the patient, the fee on it goes back to the practice, on the next statement, automatically.
Then the meter. The vendor's own ledger should be the meter, and the monthly statement should show the account-level detail behind the fee so the practice's billing lead can tie it out.
Questions to ask any vendor
These questions separate a quote that can be audited from one that cannot.
- What exactly is the fee a percentage of? All patient payments, or a defined subset? If a subset, how is membership in it determined and when?
- Is age measured at placement or at payment? From date of service or from date of first statement?
- Does the fee apply to face value, or to cash actually collected after any discount?
- How are refunds and chargebacks handled on fees already invoiced?
- Is there an attribution window, and what happens to payment-plan installments that straddle it?
- Can the practice see the account-level detail behind every invoice?
- What is in the platform fee, and what is metered? Are text messages and voice minutes included up to a stated allowance, and what is the overage rate?
- Does the vendor hold, receive, or disburse patient funds at any point, or do payments settle directly to the practice's own merchant account?
- What does the vendor earn when an account is sent to a collection agency? Any referral or revenue share on the hand-off is a conflict with in-house recovery.
- What are the termination terms, and what does data return look like?
A vendor that answers all ten in writing has a quote the practice can read. One that answers with a single percentage has a quote the practice can only trust.
Sources
- ACA International benchmarking data on agency recovery, as reproduced in industry trade references
- DueWell analysis of the founder's practice ledger, Sept 2026 (basis for the $965,000 and $187,500 figures in the worked example). Single site, founder-affiliated, observational, no control group.
- DueWell pricing terms and definitions, duewell.io