How to Start a Medical Billing and Coding Company for US Healthcare Providers from Abroad (2026), Without Visiting: US LLC or C-Corp, EIN Without an SSN, Bank Account, HIPAA Business Associate Agreements, Offshore Restrictions, Medicare Billing Rules and the False Claims Act
How a medical billing, coding or revenue cycle management company outside the USA sets up a US company remotely to serve American doctors, clinics and hospitals: LLC or C-Corporation, EIN without an SSN or ITIN, a US business bank account without visiting, services and pricing, HIPAA business associate duties and security, payer and Medicaid limits on offshore access, Medicare rules on billing agents and percentage fees, the False Claims Act and upcoding, coding credentials and CPT licensing, cyber insurance, tax, and worked examples.
The US healthcare system spends a remarkable share of its effort on getting paid. Every visit becomes a claim, coded in ICD-10 and CPT, submitted to one of hundreds of insurers, often denied, appealed and resubmitted. Physicians' practices, clinics and hospitals rely on medical billing and revenue cycle management (RCM) companies to do it, and many of those companies are partly or wholly offshore, with large teams in Chennai, Hyderabad, Kolkata, Cebu and Manila.
A medical billing company serving US providers can be run from your own country, without visiting the USA. A US company helps you sign US practices, pass their compliance checks and get paid in dollars. But you will be handling protected health information, so HIPAA, payer contracts and US fraud laws shape the business as much as the coding does.
In short: A non-resident can form a US LLC or C-Corporation without visiting, get an EIN without an SSN or ITIN, and open a US business bank account remotely. A billing company is a HIPAA business associate: sign a business associate agreement with every client and meet the Security Rule. HIPAA does not ban offshore work, but some Medicaid programmes, Medicare Advantage plans and payer contracts restrict or require disclosure of offshore access to patient data. Medicare payments must go to the provider's own account. Coding errors that inflate claims can bring False Claims Act liability. If all the work is done abroad, a foreign-owned single-member LLC usually owes no US federal income tax, but files Form 5472 every year.
What a medical billing company does
| Service | What it involves |
|---|---|
| Eligibility and benefits verification | Checking patients' coverage before appointments |
| Medical coding | Assigning ICD-10-CM diagnosis codes and CPT and HCPCS procedure codes from the clinical notes |
| Charge entry and claim submission | Entering charges in the practice management system and sending claims through a clearinghouse |
| Payment posting | Recording insurer remittances (ERAs) and patient payments |
| Denial management and appeals | Working rejected claims, correcting and appealing |
| Accounts receivable follow-up | Chasing unpaid claims with payers |
| Credentialing and payer enrolment | Enrolling providers with insurers |
| Patient billing and support | Statements and patient calls |
Typical pricing is a percentage of collections (often around 4% to 9% for full RCM), a fee per claim, or a monthly fee per FTE for dedicated staff working in the client's systems.
Can you start a medical billing company in the USA without visiting?
Yes:
- Form the LLC or corporation online through a registered agent
- EIN without an SSN or ITIN: Form SS-4 to the IRS, processed manually for foreign owners
- US business bank account without visiting, at a bank or fintech that accepts foreign-owned companies
- Business associate agreements and service contracts, signed electronically
- Clearinghouse and software accounts, opened online with the company's details
Expect four to eight weeks for the company, EIN and bank account. See opening a US company without visiting and EIN for non-residents. Medical billing is a recognised business for banks; your HIPAA policies and sample BAA help. See the US business bank account guide.
US LLC or C-Corp?
US LLC formation for a medical billing company
A single-member LLC owned by a non-resident is disregarded for US tax. When the billing work is done outside the USA, with no US office or staff, the fees are generally foreign-source, so the LLC usually owes no US federal income tax. It files Form 5472 with a pro forma 1120 every year ($25,000 penalty if missed). See Form 5472 explained.
A Wyoming LLC with EIN is $249, or $348 with a bank account, then $121 a year.
US C-Corp formation for an RCM company
A C-Corporation (21% federal tax) suits an RCM company that will hire US-based staff (often needed for clients that restrict offshore access), seek investors or be sold. Healthcare services businesses are frequently acquired by private equity, which buys corporations. A Delaware corporation with EIN is $358, then $578 a year. See LLC vs Inc.
HIPAA: you are a business associate
Under HIPAA, doctors, hospitals and health plans are covered entities. A billing company that handles their protected health information (PHI) on their behalf is a business associate, and your own subcontractors who touch PHI are business associates too.
The business associate agreement
Before you see any PHI, you and the client must sign a business associate agreement (BAA). It requires you to:
- use and disclose PHI only to perform the services
- apply the Security Rule's safeguards
- report breaches and security incidents to the client
- flow the same terms down to your subcontractors
- return or destroy PHI at the end of the contract
Your offshore delivery company, if it is a separate company, needs a subcontractor BAA with your US company.
The Security Rule in practice
US clients and auditors expect, at minimum:
- a written risk analysis, updated regularly
- unique logins, multi-factor authentication and access only to what each person needs
- work inside the client's systems through VPN or virtual desktops, with no downloads, printing or USB storage
- encryption of devices and data in transit
- audit logs of who accessed which records
- workforce training and signed confidentiality agreements
- physical security: badge access, clean desks, no phones on the production floor
HHS proposed a significant strengthening of the Security Rule in January 2025, with more prescriptive requirements for encryption, MFA and asset inventories. Building to those standards now puts you ahead of client audits.
Breaches and penalties
Breaches of unsecured PHI must be reported to the covered entity, which notifies patients, HHS and sometimes the media. HIPAA penalties can exceed $2 million a year per type of violation, and state attorneys general can sue as well. Business associates are directly liable.
Offshore restrictions: read every client's contracts
HIPAA itself does not prohibit sending PHI offshore. But other rules do restrict it:
- Medicaid. Many state Medicaid programmes, and the managed care plans that run them, prohibit or restrict offshore access to Medicaid beneficiaries' data or offshore performance of Medicaid functions.
- Medicare Advantage and Part D. Plans must report and attest to offshore subcontractors that receive, process or store beneficiaries' PHI.
- Payer and hospital contracts. Many contain clauses limiting offshore access.
- Government and VA work. Usually requires US-only access.
Ask each client which payers and programmes its patients use, and whether any contract restricts offshore access. Many offshore RCM companies keep a small US-based team for restricted work.
Medicare's rules on billing companies
- Payment goes to the provider. Medicare pays the provider. A billing agent may not receive Medicare payments in its own name; payments go into an account in the provider's name, which the provider controls.
- Percentage fees. Paying a billing company a percentage of collections is common, but Medicare's rules on billing agents, and the HHS Office of Inspector General's compliance guidance for billing companies, warn that percentage arrangements can encourage upcoding. Some states restrict percentage-based billing fees for certain payers. Document how you prevent this.
- Enrolment. Medicare and other payers may require the provider to list its billing agent.
The False Claims Act and coding accuracy
The False Claims Act makes anyone who knowingly submits, or causes to be submitted, a false claim to Medicare, Medicaid or other federal programmes liable for three times the government's loss, plus a penalty per claim. Billing companies have been sued for:
- upcoding: billing a higher-level service than the notes support
- unbundling procedures that should be billed together
- billing for services not documented or not performed
- ignoring overpayments, which must be reported and returned within 60 days of being identified
Protect your company with:
- certified coders, regular coding audits, and accuracy targets in the contract
- a compliance programme: written policies, a compliance officer, training, and a way for staff to report concerns
- a rule that coding follows the documentation: ask the provider rather than guess
Coding credentials and tools
- US clients prefer coders with AAPC (such as CPC) or AHIMA (such as CCS) certifications, both obtainable from abroad.
- CPT codes are owned by the American Medical Association and are licensed for use, usually through your clients' or your software vendors' licences. Use them within those licences.
- Clients will give you access to their practice management or EHR systems, or you will use your own billing platform and clearinghouse.
Insurance and certifications
- Cyber liability and errors and omissions cover are standard client requirements.
- Larger clients may ask for SOC 2 or HITRUST certification.
- Keep proof of staff background checks and HIPAA training.
Contracts with providers
Your service agreement should define services, turnaround times, KPIs (days in A/R, first-pass claim rate, denial rate), fees and what counts as a "collection", data access, the BAA, offshore disclosure, liability limits, termination and transition of files. See contracts with US clients.
Clients will ask for a tax form: a W-8BEN or W-8BEN-E for a foreign-owned single-member LLC, or a W-9 from a corporation. See W-8BEN-E vs W-8BEN. They pay by ACH to your US account; see receiving payments from US clients.
Running the team abroad
- Your home-country company employs the coders and billers and serves the US company under an intercompany agreement and a subcontractor BAA. Record related-party payments for Form 5472.
- Contractors paid directly by the US company give a W-8BEN; work done abroad needs no US withholding and no Form 1099. See paying contractors abroad.
- Indian residents set up the US company under the ODI rules; see ODI and FEMA.
- Your country's data protection law also applies, such as India's Digital Personal Data Protection Act or the Philippines' Data Privacy Act.
Sales tax
Medical billing services are not subject to sales tax in most states. A few states tax some data processing services, such as Texas. See state taxes for foreign-owned companies.
Worked examples
These are illustrative examples, not client stories.
A billing company in Chennai. Lakshmi's 80-person company handles full RCM for US physician practices at 6% of collections. It forms a Wyoming LLC under the ODI route, with an EIN and a US bank account, signs a BAA with each practice, and has a subcontractor BAA with the Indian company. Staff work only in clients' systems through virtual desktops. Before taking a practice with many Medicaid patients, it checks the state's offshore rules and declines the Medicaid portion.
A coding team in Cebu. A Philippine company provides certified coders to US hospitals on monthly FTE pricing. It forms a Delaware C-Corp because two hospital clients require some US-based staff for restricted payers, and it plans to hire them through the corporation. Quarterly external coding audits keep accuracy above 95%.
A credentialing service in Kolkata. Arnab's firm handles payer enrolment for new US practices, which involves practitioners' personal data but less PHI. It forms a US LLC, signs BAAs where patient data is involved, and keeps enrolment documents in an encrypted portal.
Common mistakes
- Starting work before signing a BAA.
- Staff downloading claim files or using personal email.
- Taking Medicaid work in a state that bans offshore access.
- Receiving Medicare payments into the billing company's account.
- Coding to maximise revenue rather than to match the documentation.
- No subcontractor BAA between the US company and the offshore team.
- Forgetting Form 5472 because the LLC had no US income.
Frequently asked questions
Can I start a medical billing company for US clients from India without visiting? Yes. The company, EIN and US bank account are all set up remotely.
Do I need an SSN or ITIN for the EIN? No. Foreign owners apply on Form SS-4.
Does HIPAA allow offshore medical billing? Yes, with a BAA and proper safeguards. But some Medicaid programmes, Medicare Advantage plans and payer contracts restrict or require disclosure of offshore access.
Can a billing company charge a percentage of collections? It is common, but Medicare payments must go to the provider's account, and the OIG warns that percentage fees can encourage upcoding. Check state rules too.
Will my US LLC pay US tax on billing fees? Usually not, if all work is done abroad and there is no US office or staff. It still files Form 5472.
How UCB can help
We form US LLCs and C-Corporations for medical billing and RCM companies outside the USA, get the EIN without an SSN, and help open a US business bank account without visiting, through our formation, EIN and bank account package. Each year we prepare Form 5472 with the pro forma 1120, Form 1120 or Form 1065, through our US tax filing service. We do not provide HIPAA, healthcare compliance or legal advice.
Starting a medical billing company for US providers? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.
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This article is general information for non-resident business owners and is not legal or tax advice. Rules and fees change; contact us to confirm what applies to your situation.
