Before You Sign: What Authority Are You Really Giving Your Medical Billing Company?

Most healthcare providers spend more time reviewing their reimbursement rates than they do reviewing the authority they’re granting a billing company.

That’s understandable. When you’re trying to get a practice up and running, it’s easy to focus on getting credentialed, seeing patients, and getting paid. But one of the most important documents you’ll ever sign may be your billing and collection agreement.

A billing company can only exercise the authority you give it. That authority should be clearly defined in your contract, and the company’s day-to-day operations should reflect what you’ve agreed to.

What Does a Billing Company Typically Do?

Medical billing companies exist to make the administrative side of healthcare easier. Depending on the agreement, they may:

• Prepare and submit insurance claims.

• Follow up on unpaid claims.

• Appeal claim denials.

• Post insurance payments.

• Send patient statements.

• Assist with credentialing and payer enrollment.

• Communicate with insurance companies regarding billing matters.

• Manage portions of the revenue cycle.

In almost every billing relationship, these tasks are performed on behalf of the provider.

The billing company is typically acting as an administrative agent—not replacing the provider or assuming responsibility for the medical services that were performed.

The Provider Still Has Responsibilities

One misconception is that hiring a billing company transfers responsibility for everything related to insurance billing.

In reality, most billing agreements—including ours at Sunshyn Credentialing & Medical Billing—make it clear that the provider remains responsible for the accuracy of their documentation, coding, and the services they perform.

Our agreement specifically states that Sunshyn bills on behalf of the provider. We submit claims, follow up with insurance companies, and assist with collections, but the provider remains responsible for the clinical information that supports those claims.

This approach is common throughout the industry because billing companies generally rely on the provider’s documentation and coding decisions when submitting claims.

Read the Contract—Not Just the Sales Pitch

Recently, there has been public discussion surrounding another company’s provider agreement that describes its role as acting as a billing and collections agent.

There’s nothing unusual about that description by itself. Many billing companies use similar language.

The important question isn’t what the company calls itself.

The important question is:

Does the company’s day-to-day operation match the authority granted in the written agreement?

Every provider should be comfortable answering that question before signing any contract.

Questions Every Provider Should Ask

Before entering into any billing relationship, ask yourself:

• Exactly what authority am I granting?

• Who is submitting claims under my name?

• Who communicates with insurance companies?

• Who receives insurance payments?

• Will I have access to claims, remittance advice, and billing records?

• Can I review claims submitted on my behalf?

• What happens if our business relationship ends?

• Does the company’s actual workflow match what the written agreement says?

These aren’t adversarial questions—they’re simply good business questions.

Why the Fine Print Matters

Contracts exist to define expectations before problems arise.

If your agreement says a company is acting on your behalf, the contract should clearly explain what that means.

If the agreement grants authority to perform billing and collections, understand exactly what activities fall within that authority.

If something isn’t addressed in the contract, ask about it before signing.

Clear agreements help protect everyone involved—the provider, the billing company, and ultimately the patient.

Don’t Skip the Arbitration Clause

One section providers frequently overlook is the arbitration clause.

Many billing and service agreements require disputes to be resolved through private arbitration rather than in court. Arbitration isn’t inherently good or bad, but it can significantly change your options if a disagreement arises.

If you later discover that you and the company have different interpretations of the agreement, resolving that dispute may require hiring an attorney, paying filing fees, covering arbitrator costs, and investing considerable time before the actual issues are even addressed.

For many small healthcare practices, those costs alone can make it difficult to challenge a contract after it’s been signed.

That’s why reviewing the agreement carefully before signing is so important.

An Hour Today Can Save Months Later

The best billing relationships are built on trust, transparency, and clearly defined responsibilities.

Whether you’re hiring your first billing company or considering a new one, don’t be afraid to slow down and read the agreement carefully.

Understand exactly what authority you’re delegating.

Know what responsibilities remain yours.

Make sure the company’s business practices align with the authority described in the contract.

And if there’s an arbitration clause, recognize that signing the agreement may limit how future disputes are resolved.

A contract isn’t just paperwork—it’s the roadmap for your business relationship. Taking the time to understand it today could save you significant time, expense, and frustration in the future.