Wiki Billing Department Costs

[slj41768]

Does anyone know what the formula is to determine how much the billing department of a practice should cost in the way of salaries? My doc says he was told 4.5 - 5% of receivables. Thanks!

 

[armen]

Does anyone know what the formula is to determine how much the billing department of a practice should cost in the way of salaries? My doc says he was told 4.5 - 5% of receivables. Thanks!

Cost would depend on volume of work. I would saycost = number of people working in billing department X average salaries (you can get this from AAPC salary survey). I would agree with your doc only on the numbers, but I would say it should not cost more than 5%. Because, if it would cost you more than that then it would make sense to outsource the billing and possibly coding & collections. Most companies would charge from 4-12% depending on quality and number of services provided.