Hospitals, healthcare centers, and other medical institutions are also business organizations after being the focus of health services that require revenue to streamline operations and deliver better healthcare services. Medical Billing Software Development service encounter in a healthcare institution begins with scheduling an appointment and goes up to the post-discharge services. There are a lot of people from different departments who are involved directly or indirectly in this process. 

Thus, the chances of human error are reasonably high. Mistakes in billing are not uncommon and can cost hospitals a whopping $68 billion annually. Some patients are overcharged by 26% due to such mistakes.

Medical billing software can help eliminate such mistakes and streamline your business operations. A lot of healthcare organizations are moving to custom medical billing software development because of their plethora of benefits. There are plenty of medical billing software available in the market. Still, we always recommend getting a custom solution as it will be specially curated for your healthcare organization. Such software will help in patient billing and checks for insurance eligibility, reimbursements, and other financial operations.

However, finding a medical billing software development company that meets your requirements is a challenging task. You must know many other things and follow certain steps to develop your medical billing solution.

What Is a Medical Billing Software?

Medical Billing Software

Simply put, it is software that can automate the invoicing process of healthcare institutions. It includes maintaining charges, recording test history, and documenting payment, thus, improving the speed of the financial process of patients and removing other strenuous manual tasks. 

Medical billing software helps optimize revenue, minimize errors, and manage the financial aspects of the healthcare organization. The software can verify every invoice, classify & store the data, prevent fraudulent claims, and faster transactions. It improves the operations of healthcare centers in different ways, such as:

  • Most of these systems are EHRs integrated.  Thus, there is a very negligible chance of human error, and the data is visualized with minimalistic efforts
  • The first-pass acceptance rate gets increased with the Claim Scrubbing functionality
  • As the claims get automated, the billers can locate their focus on patients

Medical Billing Software Development Statistics and Market Size 

The market of Medical Billing Software is segmented region-wise, like hospitals, Clinics, & others, and Types like Claims Scrubbing, Code and charge Entry, and Compliance Tracking. The market is growing at a compound Annual Growth Rate of 12% between 2022 and 2030.

As per the latest report of Verified Market Reports, in 2019, the market was valued at $14.2 billion and is expected to reach a valuation of $26.5 billion by 2027.

Types of Medical Billing Software

Broadly speaking, medical billing software can be categorized into two types; cloud-based and on-premises. However, these types can be further classified based on their functionality and purpose.

Cloud-based software is accessible from anywhere, easy to maintain and scale, and typically has less upfront costs as opposed to on-premises software.

On-premises software offers complete control over data since it’s hosted locally, and is easier to customize. However, it typically costs more than cloud-based solutions and requires in-house maintenance.

Integrated EHR and billing systems streamline the workflow by combining the functionality of EHR and billing systems.

Standalone billing apps focus exclusively on the billing cycle and can be integrated with existing EHR systems.

Specialty-specific billing apps take into account specialty-specific coding and regulations in addition to revenue cycle management to better serve the practice.

Mobile medical billing apps offer on-the-go functionality to healthcare providers and can be accessed on smartphones and tablets.

Top Medical Billing Software to Inspire You to Build One

 It is always better to learn from the experience of others and build something better with the reference of existing ones. The same is valid with Medical Billing Software as well. Here are the top 3 software in the healthcare industry to understand how you should go for Medical Billing Software Development.

1. Drchrono:


An all-in-one Electronic Health Records (EHR) software, Drchrono is a popular medical billing solution that fits all sizes of medical practice. It facilitates accessible communication between healthcare providers and patients. The software sends automatic reminders for appointments through emails or texts. The software has a medical billing and revenue cycle feature, and the billing gets done once the chart is complete. Drchrono is highly secure and even meets HIPAA standards.

Some of the significant features of Drchrono are:

  • Billing management
  • Document management
  • Appointment management
  • Insurance and Claims
  • Patient History
  • Medical Templates
  • Lab Integration
  • E-prescription
  • Patient Portal
  • Clinical Workflow

2. Kareo Billing:

Kareo Billing

Based in California, Kareo is a reputed name in building medical billing software and the Revenue Cycle Management (RCM) process. The company provides billing software, Cloud-based EHR, Patient Engagement Software, and outsourced medical billing. The billing software offered by Kareo can simplify tasks such as submitting claims to insurance companies, following up on unpaid claims, and posting payments. The software also provides reporting and analytic tools to track the revenue and identify areas for improvement.

You must let your medical billing software development team know this is the kind of software you want to take to market. 

Some of the major features of Kareo Billing are:

  • Billing Dashboard
  • Charge Capture & Encounter Review
  • Insurance Enrollments
  • Claims Submissions and Engagement
  • Rejection and Denial Management
  • Payment Posting
  • Patient Statements

3. Carecloud Central:

Carecloud Central

The medical billing software offering of Carecloud Central streamlines the billing mechanism at every stage, including claim scrubbing & submissions, coding, denial resolution, centralized billing, advanced analytics, and much more. The software streamlines the billing workflow, improves revenue cycles, and reduces administrative burdens.

Some of the significant features of Carecloud Central are:

  • Automated Electronic Remittance Advice
  • Claim Submission
  • Denial Resolution
  • EHR integration
  • Centralized Billing

Medical Billing and Claim Processing Software:  Key Features & Modules

It is imperative to identify the right features and functionalities for your medical billing software is critical. Let’s understand what features you must consider to manage the billing mechanism easily.

1. Patient Pre-registration and Authorization Processes (PIM) 

The accuracy of medical billing software can be achieved by optimizing billing workflow. Although it depends on numerous factors, pre-registration of patients is among the major ones. The patient pre-registration collects a lot of data such as a patient’s medical history, insurance eligibility, medicare provider enrollment, details of the patient, and much more. This feature will also improve patient care and reduce wait times.

During the registration, if the software has preliminary information, it will eliminate any gap in the future. The doctors can also check this information in a precise and accurate manner.

2. Automated Health Insurance Claims Processing-Medical Billing Software

Automated health insurance claims processing is an integral feature of medical billing software carried out through credentialing. The claim processing features deals with multiple aspects of insurance claims, such as:

  • Creating claims
  • Tracking claims
  • Submitting claims
  • Identifying and resolving errors
  • Managing denials
  • Revenue cycle management and others

It is essential to add this feature during the development of medical billing software, as it can manage much of your finance-related operations. It ensures accurate billing and gathers occurring reports, and medical practitioners can focus on providing quality treatment.

3. Cross-department Integrations |Automated Medical Accounting

Cross-department integration is essential in medical billing software as integrating various departments improves workflow. If a patient undergoes first-time registration, then its information should automatically go to the billing department, i.e., there is no need for manual entry in the software. Similarly, the information should synchronize across all other departments, like insurance verification, coding, claims processing, and payment posting.

4. Patient Appointment Scheduling Tools

The appointment scheduling feature helps the software maintain accuracy in medical billing codes. Some of the basic elements of patient appointment scheduling that are a must for your medical billing software development are:

  • Patient inflow
  • Treatment details
  • Appointment type
  • Revisits

5. Data Exchange and Integration with 3rd-Party Systems

Your medical billing software development team integrates third-party systems with your solution to boost its capabilities. EHR (Electronic Health Record) and Insurance Carrier Software integration are the most common integrations.

EHR system integration will benefit the software to access patient data such as diagnosis and treatment plans and will remove duplication issues.

Integration with insurance Carrier Software will help verify the patient’s insurance coverage before making or denying any claims.

6. Hassle-free Payment Processing

The built-in payment processing feature in the software will ensure accurate and secure billing transactions between patients and healthcare providers. The payment processing should incorporate these functionalities:

  • Accurate billing and invoicing
  • Multiple payment options
  • Automated payment reminders
  • Payments should be integrated with medical billing
  • Payment confirmation through receipts, mail, etc.

The payment feature will also help you track and analyze your revenue cycle and ensure timely payments.

7. Detailed Financial Reporting and Analytics

Reporting and analytics are essential to generate the financial reports of your medical billing services, along with patient documentation and claims management. It will also let you set a reliable cost control and can prevent unwanted machinations. It can evaluate the performance by accessing the data and gives you meaningful insight into revenue generation, cost management, and improved financial stability. There must be an easy-to-use dashboard that can give you easy-to-understand insights.

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Medical Billing Software Development Process

After knowing the essential features, it is reasonable to think about how to implement these features or the process of medical billing software development. We have explained each stage of the development process in detail based on our experience of the healthcare billing software development cycle.

1. First Service Encounter 

This is the foundation stage of any development process. You can reach out to our sales or business development team through our website. Within 24 hours, a project coordinator will consult and assist you personally with your requirements and all the further steps.

2. Design Stage

In this stage, we will understand your vision and specific requirements for this project. Here, we will define the core solution’s concept and the business context. At this stage, we will meet with our designers, business analysts, and solution architects. They will discuss different aspects of this project, including work scope, business purposes, primary risks, essential quality factors, and others. After this meeting, the project coordinator will provide you with rough time estimates along with the estimated cost.

3. Research Stage

After gathering and understanding the requirements, the team will sum up them in a structured form. The research helps fine-tune and expedite the development process and ensures high quality. The medical billing software development team will convert the requirements into precise specifications: the essential feature set, 3rd party integrations, a platform to launch the software, etc. It will include:

  • Feature list of the medical billing software
  • Essential quality checks
  • Concept of a responsive and captivating design
  • Precise business process analysis and ongoing strategy to adopt
  • Cost and time estimation
  • Final detailed estimation

If the contract meets your requirements and is per your time and cost estimation, you can sign it.

4. Development Stage

The development stage is the most crucial phase of any software development. Generally, we divide the development process into sprints – each of 1 week. The focus of developers is to implement the functionality of a medical billing app. Each sprint has a period meeting to discuss the progress of development and workflow, the arising issues, and what has been completed.

Before proceeding to the next sprint, we will meet you to discuss further expectations and features to implement in that sprint.

We also create a Proof of Concept (POC) to check that the medical billing software works effectively in your business environment. The POC helps in knowing how the software will survive in real-world conditions. POC is like a test drive in which the prototype version of the software will be run in your healthcare environment to check its compatibility and performance. It helps in identifying technical aspects, which functionality is of no use, and determining potential risks before full-scale development.

During the full-scale development, there will be integrations with 3rd party services such as EHR systems and insurance companies as it helps in data accuracy, improved efficiency, real-time billing, cost saving, and privacy.

5. Quality Assurance

The QA stages run in parallel with development sprints. After each development sprint, the QA engineers identify the issues and report them to developers. The developers then work on those issues and resolve them.

However, after the whole full-fledged development, the QA team double-checked the project for issues. They run multiple checks to evaluate the performance of each feature on all platforms and the performance of the software under specific conditions. If any issue is found, they will immediately report to the development team to fix it.

6. Maintenance and Support

Like any solution, medical billing software may require multi-tier technical support. Thus, choosing the maintenance services of the software development company that develops your solution is crucial. The fixes and improvements are based on users’ feedback, new features are implemented, and if any issue arises, it can be fixed instantly.

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What Technology Stack Is Required to Develop Medical Billing Software?

The tech stack that is generally used for medical billing software is (as per our developers’ experience):

BackendJava, Python, Ruby on Rails, Node.js
FrontendReact, Angular, Vue.js
DatabaseMySQL, PostgreSQL, MongoDB
CloudAWS, Azure, GCP
SecurityEncryption, OAuth, JWT
DevOpsDocker, Kubernetes, Jenkins
TestingJUnit, Selenium, Cypress
MonitoringPromethus, Grafana, ELK Stack

What Compliances Are Required to Develop Medical Billing Software?

Privacy and compliance are highly crucial in the healthcare industry. The patients’ data should not be compromised by any means; thus, certain compliances, standards, and security need to be followed for developing medical billing software. Here are some important compliances that must be done during the development of your billing software:

1. HIPAA Compliance 

Health Insurance Portability and Accountability Act (HIPAA) is a law that was created to protect sensitive patient health information from being disclosed. It provides data privacy and security provisions for safeguarding medical information. The medical software should comply with the HIPAA Privacy Rule, Security Rule, and Enforcement Rule.

2. PCI DSS Compliance

The Payment Card Industry Data Security Standard (PCI DSS) is set to protect the data of the transactions made through credit and debit cards against any fraud & data theft. It helps in ensuring the security of the patients’ financial information and data breaches. If your medical billing software has a payment mechanism, then it must comply with PCI DSS.

Apart from these two major compliances, other compliances will depend on the features of your medical billing software.

3. GDPR Compliance

General Data Protection Regulation (GDPR) is also a set of data privacy and security measures that applies to every organization that serves people in the EU, regardless of the location of the headquarters of the company.

Challenges in Developing Medical Billing Software (H2)

Developing the right medical billing software that meets your goals is not easy. Here are some of the key challenges.

Compliance with healthcare regulations

Since the healthcare industry is heavily regulated, your medical billing software must comply with all applicable regulations like HIPAA and ICD-10. This also includes specialty-specific regulations or nuances that your software must take into account for comprehensive reporting.

For example, in cardiology medical billing, a complex cardiac ablation procedure might require additional codes depending on the technique used by the cardiologist, unlike a general checkup with an assigned CPT code.

Data security and privacy concerns (H3)

Protecting patients’ data against data breaches and unauthorized access is crucial for any medical billing software. You can try implementing robust encryption and authentication and conducting periodic security audits to ensure privacy.

Integration with other healthcare systems (EHR, EMR)

To make the software accessible and easy to use by a wide pool of healthcare providers, you need to ensure its seamless integration with other EHR and EMR systems.

Scalability and performance issues

Your software needs to be capable enough to handle large data sets and high user load without any comprise on functionality or user experience.

User adoption and training

Every new software comes with a bit of a learning curve. And you need to help your new users onboard from other platforms to yours. Including user guides, tutorial videos, and frequently asked questions (FAQs) can help with the transition.

How Much Does It Cost to Develop a Custom Medical Billing Software Development?

There is a plethora of factors that determine the cost of custom medical billing software such as features set, platform, geography of team, experience, etc. A lump sum cost for a medical billing system can lie between $60,000-$105000.

But before going into development, you should know about the cost-reducing practices. There are two most popular and adopted methods for such projects – Outsourcing, and Outstaffing.


In outsourcing, you hire a team from a software development services provider that will work dedicatedly for your project only. The hired agency would be responsible for meeting the project deadlines, requirements, and qualified deliverables. This approach is highly suitable if you don’t possess any expertise in development and want to focus on your healthcare services instead of the technical aspects and want no headache managing your team.


In this approach, you create your team by hiring dedicated remote employees working from anywhere for your project. The employees will work for only your project, but you will be responsible for checking the progress, timely deliveries, and other crucial aspects.

Both of these approaches save time, money, and effort in comparison to hiring your team of developers.

Here are the average rates of the IT professionals by different geographies. These hourly rates are taken from Upwork and Clutch.

Region/IT SpecialistProject Manager/ CoordinatorUI/UX DesignerDevelopersQA ExpertsBusiness AnalystDevOps
North America$70-80$70-80$80-100$60-75$60-75$80-100
Latin America$40-60$40-60$35-70$35-60$35-60$35-70
Central & Eastern Europe$50-70$35-45$25-50$25-35$25-35$30-50
Western Europe$30-50$30-50$30-65$25-45$25-45$30-65

Note: All the rates are hourly

It is easy to observe that the rates vary a lot as per the region. The North American costs are extremely high, while a similar quality of development is also possible from the Asian region where the rates are low and quality is as per the standards. Companies like India, Malaysia, and Singapore have a very high reputation for IT standards while offering reasonable rates for development.

Recommended Read: Hospital Management Software Development Cost & Features

Benefits of Custom Medical Billing and Claim Processing Software in HealthCare Business

There are several benefits of custom billing medical software in your healthcare business. These are

1. Financial Benefits

The billing system highly affects the quality of healthcare and hospital profitability. A streamlined flow of billing and payments will help all the stakeholders involved, like patients, hospitals, and insurance, make & process payments on time through any channel.

It can also improve communication between different departments, doctors, and patients. All the transactions made will be appropriately recorded to maintain a track of payment history.

When the hospitals cannot properly process claims, it leads to a high patient turnover rate and other losses. Both of these issues are significantly big in the healthcare industry, and this medical billing software can eliminate such issues.

2. Better Patient Care

Consistent, scalable, and reliable medical billing software enhances patient care and satisfaction, generates more income for healthcare organizations, and significantly improves practice management.

Also, if there are any complications in billing or transactions, it results in delayed treatment, which is highly frustrating for patients who want urgent medical services. Thus, medical billing software will expedite the process and make healthcare services more appealing to both doctors and patients.

3. Streamlined Administrative Workflow:

A medical billing software would be able to handle claim submissions and billing records and give reporting, increasing the overall efficiency. With multiple processes getting automated, there will be almost no chance of any human error, which is the second major cause of mismanaged finances in healthcare.

Less duplication, typos in documents, and other errors are more likely with automated invoicing and claims handling.

How Octal Can Help You in Developing Medical Billing Software?

Octal IT Solution is a software development company with over 15 years of experience and a physical presence in the UK, India, and Singapore. We have expertise in software consulting services in various industries, and healthcare is our USP.  The Company has previously worked on Patient portals, medical databases, EHR systems, health insurance apps, and more.

We have worked on over 1,500 highly varied projects, with 100+ projects in the pipeline. Our team consists of more than 250 members with expertise in design, development, QA, management, coordination, business analysis, and other fields. We are always able to satiate our 700+ clients by delivering better than their requirements.

Our team ensures that the developed medical billing software meets the latest healthcare industry standards and automates all the required processes. Octal gives you multiple benefits for developing custom medical billing software:

Data Security and Transparency 

We always sign a Non-Disclosure Agreement with our clients and maintain complete secrecy of their requirements and data. During the whole development process, we give regular updates and don’t charge a penny extra for any task. We give you a complete estimation of the project in advance and avoid any hidden costs.


We tend to follow an agile methodology, which increases flexibility and expedites project development. Thus, if you want any additional feature or functionality during the development process, incorporating it would be of no issue.

High-quality Services 

Our design and development always follow best practices and coding standards to give you a high-quality application. Our QA team checks issues or bugs at all stages. We even provide support and maintenance after the release as well.

Varied Expertise 

We have a great deal of technological expertise in creating unique healthcare solutions. Our team has experience creating medical software that complies with many industry standards, like HIPAA, PCI DSS, GDPR, etc.

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Frequently Asked Questions – Medical Billing Software Development

What is medical billing software?

Medical billing software is an invoice-generating application that allows healthcare professionals to generate medical bills, track payments, check insurance coverage, etc.

Which programming language is best for billing software?

When we talk about medical billing software, some of the most dominant programming languages that developers prefer are:
Ruby & Ruby On Rails.

What are the key modules of medical billing software?

Some of the best modules of medical billing software include:
Patient Pre-registration and Authorization Processes (PIM)
Automated Health Insurance Claims Processing-Medical Billing Software
Cross-department Integrations
Automated Medical Accounting
Patient Appointment Scheduling

How much does it cost to develop medical billing software?

The cost for a medical billing system can lie between $60,000-$10,5000 for a feature-rich advanced app. For a basic app with limited features, the cost of development can be as low as $30k to $40k.

What is the claims management process in healthcare?

The process that the insurance payers follow to pay health insurance claims to the users is called the claims management process.

Managing Director

Arun G Goyal is a tech enthusiast and experienced writer. He's known for his insightful blog posts, where he shares his expertise gained from years in the tech industry. Arun shares his knowledge and insights through engaging blog posts, making him a respected figure in the field.

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