How to End a Contract With a Medical Billing Company

Working with a medical billing company can significantly enhance a healthcare practice's efficiency, accuracy, and revenue cycle management. However, not every partnership is built to last. Whether due to lackluster performance, poor communication, or business growth prompting a change in direction, there may come a time when a healthcare provider decides to end the relationship with their billing service provider.

Ending a contract with a medical billing company must be done professionally, legally, and with attention to detail to ensure that your practice’s operations, data, and revenue cycle are not adversely affected. At thrive medical billing, we believe in transparency and respect for our clients’ needs—whether starting a partnership or ending one.

This article will guide you through the process of ending a contract with a medical billing company, what to consider beforehand, how to transition smoothly, and how to avoid pitfalls along the way.

Reasons Practices Terminate Medical Billing Contracts

Healthcare providers may choose to end their relationship with a medical billing company for several reasons, including:

• Inefficient billing performance: Frequent claim denials, delays in reimbursements, or a high number of rejected claims.

• Poor communication: Lack of responsiveness or transparency from the billing partner.

• Lack of reporting or analytics: Inability to provide regular updates or access to KPIs.

• Compliance concerns: Issues with HIPAA compliance, data security, or improper coding practices.

• Business changes: Mergers, acquisitions, or a shift to in-house billing operations.

At thrive medical billing, we advise practices to evaluate their billing partnership regularly. If the company no longer meets your expectations, it may be time to consider a change.

Step 1: Review the Existing Contract

Before you notify your current medical billing company, it’s essential to carefully review the signed contract. Pay special attention to the following clauses:

1. Termination Clause

• Is there a required notice period (e.g., 30, 60, or 90 days)?

• Can you terminate without cause?

• Are there any penalties for early termination?

2. Data Ownership and Access

• Who owns the billing data and patient records?

• Is there a provision for data transfer or system access during termination?

3. Outstanding Claims

• Will the billing company handle claims already submitted prior to termination?

• For how long are they responsible after the end date?

Thrive Insight:

At thrive medical billing, we ensure our contracts include fair and transparent exit terms, and we support our clients even during transitions to maintain revenue continuity.

Step 2: Plan the Transition Strategically

Once the decision to terminate is made, you’ll need to create a clear transition plan. An abrupt or disorganized change can disrupt your billing process and hurt your revenue stream.

Key Planning Steps:

• Select a new billing solution: Whether you’re moving to another medical billing company or bringing billing in-house, finalize your next step before initiating the transition.

• Create a transition timeline: Coordinate a schedule that allows for overlap between the old and new billing teams.

• Assign responsibilities: Designate internal staff to oversee and facilitate the transition.

Thrive Tip:

Thrive medical billing offers onboarding support for practices transitioning from another provider. We work alongside your outgoing billing company to ensure a seamless handover.

Step 3: Notify the Billing Company

When you're ready to move forward, provide formal written notice to your current medical billing company according to the terms outlined in the contract.

Include in the Notice:

• Reference to the termination clause in your agreement

• Effective date of termination

• Request for a final account audit and data transfer timeline

• Contact information for your transition coordinator or legal team

Remain professional and courteous in your communication to maintain a positive relationship and ensure cooperation during the transition.

Step 4: Secure and Transfer Your Data

Patient records, claim histories, payer information, and account notes are critical to your ongoing billing success. A professional medical billing company should be willing to provide you with:

• Electronic files of all patient demographic data

• A/R reports and claim status information

• Copies of submitted claims and EOBs

• System access for a defined period post-termination

Ensure data is transferred securely and in compliance with HIPAA regulations.

Thrive Insight:

We make all client data available upon termination and assist with exporting reports, files, and system backups in accessible formats.

Step 5: Manage Outstanding Claims and Payments

During the termination period, it’s important to define who will manage open claims and process any remaining payments.

Consider:

• Will the current billing company follow up on outstanding claims?

• Will payments still go through the old system?

• How will denied claims be handled?

Get written clarification on who is responsible for each phase of the billing process during and after termination. This avoids confusion, ensures no money is lost, and maintains accurate records.

Step 6: Reconcile Accounts and Final Invoicing

Before closing the relationship, conduct a full reconciliation of your financials with the outgoing medical billing company:

• Final invoices for services rendered

• Clarification on any remaining fees or unpaid balances

• Confirmation of completed services (e.g., claim follow-ups)

Be sure to get a final performance report summarizing collections, claim status, and any pending issues.

Step 7: Communicate the Change Internally and With Patients (If Needed)

Inform your internal staff of the transition so they can assist with any questions that may arise during the switch. If your billing company had direct contact with patients (e.g., for collections or payment processing), consider notifying patients of the change as well.

Assure them that billing will continue to be handled securely and efficiently. Provide updated contact information if necessary.

What to Look for in Your Next Medical Billing Company

After ending a contract, selecting a new partner is a critical step. Choose a medical billing company that offers:

• Transparent reporting and communication

• Deep expertise in your medical specialty

• Proven compliance with HIPAA and CMS rules

• Scalable services that grow with your practice

• Excellent references and client testimonials

At thrive medical billing, we pride ourselves on being a trusted, performance-driven partner. Our onboarding process is designed to make transitions effortless and minimize any revenue disruptions.

Why Practices Choose Thrive Medical Billing

If you’re ending a billing relationship due to dissatisfaction or business growth, thrive medical billing offers a fresh start backed by:

• Industry-leading clean claim rates and collection efficiency

• Full-service revenue cycle management with real-time reporting

• Friendly and responsive account managers

• HIPAA-compliant security measures and system integrations

• Transparent contracts with no hidden fees

We don’t just replace your old billing company—we raise the bar for what medical billing support should look like.

Final Thoughts

Ending a contract with a medical billing company is a big decision that must be handled with care. By following a strategic process—reviewing your contract, planning the transition, securing your data, and managing open claims—you can protect your practice from revenue disruption and maintain continuity in care.

Whether you’re upgrading to a more capable partner or shifting business models, the key is to exit responsibly and choose your next step wisely. If you’re looking for a reliable, efficient, and client-focused partner, thrive medical billing is ready to help you make the transition smooth and successful.