Just to clarify a technicality, it is NOT illegal for a billing service to charge a %.. HOWEVER it is illegal for a provider to enter into a fee-splitting contract/agreement, sounds like I'm splitting hairs but in lends importance to the old argument : "But everyone is doing it and doctors like it". Of course it's appealing marketing wise, but not for the biller because of the "we don't get paid until you do". There's no upside to this logistically or legally. Your provider's attorney will point this out to the provider and the first person he/she will blame is you. That aside, there are several other method's to which to charge your clients to where you actually get paid for all of the work you put in. There's the flat fee model with sliding scale, hourly, & per claim (though becoming quite outdated). My flat fee model is derived by an hourly rate to accommodate the hours worked per account and minus expenses. IF you are a third party billing company you will ALWAYS save the provider based on a few important facts: they don't pay benefits, and your fees are deductible on their tax return's VS. If they were to hire an in-house employee or even a sub-contracted employee. There are various posts in the forum here on how to arrive at these fees and even some examples.