When I billed a % of collections it was TOTAL practice revenue. My rule was .. I touch it, I report it, I collect on it. Patient out-of-pocket is a part of the practice reports, if your not tracking them the provider's reports will be inaccurate. Remind them that keeping two sets of bills (assuming HE will be one tracking those) is a big fat NO NO. Patient statements will also be inaccurate again, with the assumption that he's going to track all these.
I never negotiated this either. Once I explained about the tracking, reporting, etc they usually then understood.
I bill a flat fee which solved many of these type of issues. I get paid for all my work and the provider's receivables are not a factor. Much easier and much more justified than billing a %.