What Is My Medical Billing Business Worth?

Medical billing companies benefit from one of the strongest recurring revenue models in service businesses — healthcare providers need billing done every month, and switching costs are high. Buyers value the contract-based, sticky nature of the revenue.

Typical Valuation Ranges

Most medical billing businesses sell for 3x to 5x SDE.

Factors that push toward the higher end:

• Long-term contracts (multi-year agreements)
• High client retention (90%+)
• Diversified client base (no single client over 15% of revenue)
• Specialty billing expertise (orthopedics, mental health, anesthesia)
• Revenue above $500K with growth trajectory
• Technology platform (cloud-based, integrated with EHR systems)
• Staff handling all billing without owner involvement

Factors that push toward the lower end:

• Month-to-month client arrangements
• Owner handles billing personally
• Concentrated client base (one practice is 30%+ of revenue)
• General billing without specialization
• Paper-based or outdated systems

What Drives Value

Client retention is everything. Medical practices don't change billing companies casually — the switching cost is high and the risk of revenue disruption is real. Demonstrating 90%+ retention over multiple years significantly increases your valuation.

Specialization in specific medical specialties creates expertise that's hard to replicate and justifies premium pricing.

Contract terms with defined scope, multi-year duration, and auto-renewal provide the predictability buyers pay for.

How to Increase Your Value

1. Formalize contracts. Move from handshake agreements to written multi-year contracts with auto-renewal.
2. Specialize. Deep expertise in 2–3 medical specialties commands higher fees and is more defensible.
3. Diversify clients. Grow your client base so no single practice dominates your revenue.
4. Build your team. Hire and train billing specialists who manage client relationships independently.
5. Upgrade technology. Cloud-based platforms with EHR integrations demonstrate operational maturity.

Browse the valuation multiples guide for industry data, or schedule a free call for a confidential valuation.