Wiki Medical Billing Agency Set up Fees & % of AR?

[cathy@eyebillforyou.com]

I have had a small (very small) medical billing agency since 2000. I have had to keep a FT job throughout and couldn't spend as much time as I should getting new clients. I am revamping my company and wondering what the average seems to be for Med Billing Agency fees for set up and % of AR? I was thinking it seems around 7%. Do you all know if any billing agency use a retainer system for the first 3 months. As you know if we are working off of old crappy AR we are not getting paid much until we turn things around. If the dr's office is collecting our data, the quality and accuracy of that data is key. Also best advice to controlling and making sure we get the full say 7% from the dr's office and they don't hide payments from us either from insurance, third party, or the patients. ?? Thank you!!

 

[LisaHoman]

Cathy, your questions are complex and from experience I can tell you that they are questions that require lots of consideration and personal decision making based on comfort level.

When setting fees, you may want to research the going rate in your region. It can be different based on region, and specialty type. Also consider a higher percentage for collection instead of billed amount. This is attractive to potential clients because they pay when the you are successful. I don't know many providers willing to pay on effort, but will pay for results. Considering the advancement in technology, it is much easier to determine claims payments than it was even 5 years ago. Many payors provide an online EOB service for providers. (You would need to get approval by PIN). Set up a simple system of managing payment posting to the physicians A/R. He/She has a need/desire to have accurate record keeping so, getting paid should not be too concerning. If you see a problem don't be afraid to walk away from the service. And always be sure your contract or service agreement spells out the terms of your service. I recommend that you pay the money to have someone experience in contract law review your agreements. Never begin work without a signed agreement in place.

 

[lorrpb]

Here are some of the things I did when I had my billing service:
Charge a per-patient setup fee to cover some upfront costs.
Provide the office with a patient registration form that provides all the info you need, in the form you need it.
Charge a research fee if you have to go back and obtain missing information or correct the info they gave you.
If you are taking on their old AR over 60 or 90 days, you need to charge substantially more than 7% for those accounts because they are a lot more work, and not all of them will be paid.
I don't think it would work to charge a retainer for 3 months, then also collect the 7% when it comes in. It would be a hard sell.
I never had any problem with doctors "hiding" money from me. It wouldn't work anyway, if you're doing followup. If you think a claim hasn't been paid and you call the insurance company, they would tell you when it was paid and how much. If that happened more than once, I probably wouldn't keep the doctor (if it seemed to be intentional withholding).
Hope that gives you some ideas.

 

[cathy@eyebillforyou.com]

Thank you both very much. I just had a possible client meeting and based on my research most drs around here seem comfortable with to 7 to 7.5 % of ar collected. This one doctor says copays don't count as part of the claim, when I think I need copays to count because you know how crappy some of the insurance carriers pays nowadays. I like you responses and will remember your advice. Thanks again.