As the business of owning a medical practice gets to be more competitive, many practices are looking towards a third-party medical billing service for economical solutions to maintain maximum profitability. In evaluating any medical billing service agreement it has an array of factors that you should taken into consideration – pricing of services is principal one of them. This article compares the two most common pricing approaches available from medical billing services – Percentage Based Agreements and Flat Fee per Claim – and identifies several of important points to consider when selecting a medical billing company.
Percentage Based Agreements:
Probably the most frequent approach to pricing by medical billing services would be the percentage based agreement. In this kind of agreement, the medical billing service’s fees to your practice use a percentage, usually in a single form or any other of the following:
Percentage of collections,
Percentage of gross claims submitted with the billing service,
Percentage of total collections to the overall practice.
With the 1st type above, area of collections, the medical billing company charges the practice only on net received for people claims in which it has directly assisted in collections (typically excluding monies collected on the job, for instance co-pays, deductibles, etc.). This may be the purest illustration of how a portion based agreement will tie the medical billing service’s success to your practice while safely limiting it to that particular which they possess some measurable capacity to affect. This sort of percentage based agreement benefits the practice by its “self-policing” quality- the medical billing service only makes money if the practice makes money.
In our second type, number of gross claims submitted from the billing service, the practice is charged a portion of the total amount published to insurance companies along with other payers. This might be tricky for two main reasons. First, the speed billed with an insurance company isn’t necessarily the same as the negotiated rate that is to be paid. So an allegedly competitive percentage in one medical billing service is usually drastically not the same as another medical billing service based on where the percentage is applied. Second, many of the incentive already stated is removed for follow through to claims while there is no tie-in for the results of medical billing service’s submissions.
With a portion of the total collections to the overall practice, the billing service charges for your total net received through the practice. It includes co-pays, deductibles, and then for any other monies collected on the job, not just through the service. This arrangement is normally found with full-scale practice management companies who not merely handle medical billing but may also administer staffing, scheduling, marketing, fee schedule negotiations, etc. In this arrangement, the medical billing service might be driven by incentive that you follow up on claims with payers, but gains some protection to its revenues from the other types of payment getting into the practice.