Dental RCM
Dental Billing Cost Calculator
Add up what in-house dental insurance billing costs you per year, per claim and as a share of collections.
Estimated result
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Total annual billing cost
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Billing cost as a share of collections
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- Annual staff cost
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- Annual software and other costs
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- Average monthly billing cost
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- Cost per claim
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Estimates only, based on your inputs and the assumptions below. Not a guarantee of results or professional advice. Inputs stay in your browser.
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Quick answer
What does the dental billing cost calculator measure?
This calculator estimates the full cost of running dental insurance billing in-house: billing staff wages and benefits, plus software, clearinghouse and other monthly expenses. It shows the annual total, the cost as a percentage of collections and, optionally, the cost per claim, so you can compare in-house billing with other options.
Formula
Annual staff cost = FTEs x Wages x (1 + Benefits % / 100)
Fully loaded staff cost.
Annual software and other = (Software per month + Other per month) x 12
Non-staff billing expenses.
Annual billing cost = Staff cost + Software and other
Total direct cost of in-house billing.
Cost share = Annual billing cost / (Monthly collections x 12) x 100
Billing cost relative to collections.
Cost per claim = Annual billing cost / (Claims per month x 12)
Only shown when claim volume is entered.
Worked example
Staff cost is 1.5 x 45,000 = 67,500, plus 25% benefits = $84,375. Software and other costs are (400 + 200) x 12 = $7,200. Total annual cost is 84,375 + 7,200 = $91,575, or 91,575 / 12 = $7,631.25 a month. Annual collections are 80,000 x 12 = $960,000, so cost is 91,575 / 960,000 = 9.54% of collections. With 600 x 12 = 7,200 claims a year, cost per claim is 91,575 / 7,200 = $12.72.
| Billing staff (full-time equivalents) | 1.5 |
|---|---|
| Average annual wages per FTE | $45,000 |
| Benefits and payroll taxes | 25% |
| Software and clearinghouse per month | $400.00 |
| Other billing costs per month | $200.00 |
| Monthly collections | $80,000 |
| Insurance claims per month | 600 |
| Total annual billing cost | $91,575 |
| Billing cost as a share of collections | 9.54% |
| Annual staff cost | $84,375 |
| Annual software and other costs | $7,200 |
| Average monthly billing cost | $7,631 |
| Cost per claim | $12.72 |
Assumptions and limits
- Staff costs cover only time spent on billing, verification and follow-up, not other front office duties.
- Office space, management time and turnover or hiring costs are not included unless you add them to other monthly costs.
- Collections and claim volume are steady across the year.
Frequently asked questions
What costs should I include in dental billing cost?
Include the wages and benefits of everyone who spends time on insurance billing, eligibility checks, claim attachments, posting and follow-up, measured as full-time equivalents. Add software, clearinghouse, eligibility and attachment service fees, statements, postage and training. Leaving out part-time contributions from front office staff is the most common reason in-house billing costs are underestimated.
How do I estimate billing staff as full-time equivalents?
Estimate the hours each person spends on billing tasks per week and divide the total by the hours in a full-time week, often 40. For example, one coordinator full time plus another team member spending 20 hours a week on claims is about 1.5 full-time equivalents. A one or two week time log gives a more reliable estimate.
Is cost per claim or cost as a percent of collections more useful?
Both are useful for different comparisons. Cost per claim shows efficiency regardless of fee levels and is helpful when claim volume changes. Cost as a percentage of collections is easier to compare with outsourcing proposals that are priced as a percentage. Looking at both helps avoid a decision driven by one number alone.
Does a lower billing cost always mean better billing?
No. A low direct cost can hide revenue lost through unworked denials, missed attachments, aging claims and write-offs. A complete comparison looks at both what billing costs and how much of net production is actually collected. Use the dental insurance collection calculator alongside this one to see the revenue side of the picture.
Written by the Texas Solutions RCM team. Last reviewed . General information, not legal or coding advice; payer rules vary.
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