Medical Billing Forum
Starting a Medical Billing Business => Starting Your Own Medical Billing Business => : KLA February 08, 2011, 01:24:31 PM
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Good Morning Ladies
Let me first say.... Great forum and chock full of goodies! YEAH!!
My question is can some explain the difference between billing your clients % of net collected and flat fee - what is flat fee and how does it work - what are you invoicing them off of - per claim? It seems tedious? Please help, I really value all your info!
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Billing a % is determining your fee after the providers collect and it is a set % of what is collected. A flat fee is the same fee each month and is preset. Many people use the provider's average receivables, or average amounts billed out to determine their flat fee. Others estimate the time of work they will be putting on, others bill based on the average number of claims that are submitted. If you are used to billing a % it can be tough switching your thought process. But % billing is illegal is several states. Many billing services still do it that way and it is sometimes hard to explain it to the provider, but flat fee billing has many benefits.
Michele
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Thank you so much Michelle - My company is in the process of switching over to the flat fee becasue we bill in multiple states and I don't want to have a legal issue - I think NJ is a sticky one and that is where alot of our providers are. I have sinces moved to SC and am trying to acquire some practicioners here but it is quite different. The marketing here is not as aggresive apparently!
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My first provider was from SC. They are neurology, but they started supplying dme equipment (AFO?KAFO's) and hired me to bill that portion out. She was obtained via a Craigs List ad. :-)
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Charlene,
Thats great! Where in NC are you? -Raleigh? Thats about 2 hours from me I think. I was saying in my other post, I have a few meetings coming up with mental health - I really haven't done much of that myself and the biller who did do this in NJ wont be doing that here. Do you have mental health clients? DME is always a treat! I enjoy doing that too! Good for you getting the response from craigslist. What do you do - respond to a job posting?
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Yes in the big Capital!! SC is about 3-4 hrs away depending on where you are. Greenville SC is right on the border of Charlotte. Yes I do mental health, and currently doing SAIOP billing on the UB04. He was also a craigs list client. He was seeking some help billing his claims. Wanted help with Blue E, well I helped him, ended up doing a PAID inservice for him and the staff, and that turned into a signed contract!!
Yes I simply reply to the ads that are posted. I have run into only 2 that were seeking to outsource from the ad. Most are seeking in-house billers, however what I send to them intrigues quite a few. Its like anything else, hit or miss. Some are receptive, some are not, however it has been very lucrative for me, so I wont' complain about craigs list.
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Good for you. My hubby and I are always in NC - we should have a meeting of the minds some day!
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i have a twisted mind....LOL
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Thank you so much Michelle - My company is in the process of switching over to the flat fee becasue we bill in multiple states and I don't want to have a legal issue - I think NJ is a sticky one and that is where alot of our providers are. I have sinces moved to SC and am trying to acquire some practicioners here but it is quite different. The marketing here is not as aggresive apparently!
There are actually a few formula's you can use for flat fee billing. The end of the formula always turns out where you get paid for all the time you put in which is the nice part of flat fee billing. The formula I use is based on hourly rate. If you have less experience (meaning your hourly rate may do your flat fee justice) than you can use a 6 or 12 month analysis of receivables, claims etc. For me I start out with what I want to be paid per hour $25/$35 an hour. I estimate the time it will take, hourly rate I want to make, add expenses for that client (postage, clearinghouse, paper, ink, phone, etc) and there you have it. Here is a rough example:
Based on $25 per hour: Estimated time for client per week = 15 15X$25=$375 X 4 weeks = $1500 + Expenses $300 = $1800 per month.
I also use ACT which allows me to time my work by provider so that I can run my own reports to make sure I am accounting for all my time. I simply hit the timer in that clients database, work strictly on their claims and/or calls, etc and whenever I stop, I pause the timer. At the end of the month I run reports and I can see if/where I am losing money. ;D
I also use a sliding scale. If I can enter let's say 5 claims/ 5/patients in an hour, that's $25 per hour, so i would charge the client an additional $25 for every 5 new patients.
If I am doing consulting also with the same practice I have two contracts and my consulting/training is done hourly.
I also get asked if I reveal my hourly rate, no, there's no need. You have all the information you need to just state the flat fee is based on the estimated time, and work involved. So far I've never been asked what my hourly rate was when I give them the flat fee ideology. I do have providers ask what my incentive is since I'm not collecting a percentage and my answer without hesitation is "My reputation" and that usually suffices :)
NJ is not bad really, I used to live and work in NJ but after I moved I stopped doing billing for a little bit but they adopted regulations that require third party billing companies to register their businesses. It is a little tedious and they really don't have any one "qualified in our industry" to "credential" us so they base the registration on your submission of information the need to have to register you.
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Thank you so much Michelle - My company is in the process of switching over to the flat fee becasue we bill in multiple states and I don't want to have a legal issue - I think NJ is a sticky one and that is where alot of our providers are. I have sinces moved to SC and am trying to acquire some practicioners here but it is quite different. The marketing here is not as aggresive apparently!
There are actually a few formula's you can use for flat fee billing. The end of the formula always turns out where you get paid for all the time you put in which is the nice part of flat fee billing. The formula I use is based on hourly rate. If you have less experience (meaning your hourly rate may do your flat fee justice) than you can use a 6 or 12 month analysis of receivables, claims etc. For me I start out with what I want to be paid per hour $25/$35 an hour. I estimate the time it will take, hourly rate I want to make, add expenses for that client (postage, clearinghouse, paper, ink, phone, etc) and there you have it. Here is a rough example:
Based on $25 per hour: Estimated time for client per week = 15 15X$25=$375 X 4 weeks = $1500 + Expenses $300 = $1800 per month.
I also use ACT which allows me to time my work by provider so that I can run my own reports to make sure I am accounting for all my time. I simply hit the timer in that clients database, work strictly on their claims and/or calls, etc and whenever I stop, I pause the timer. At the end of the month I run reports and I can see if/where I am losing money. ;D
I also use a sliding scale. If I can enter let's say 5 claims/ 5/patients in an hour, that's $25 per hour, so i would charge the client an additional $25 for every 5 new patients.
If I am doing consulting also with the same practice I have two contracts and my consulting/training is done hourly.
I also get asked if I reveal my hourly rate, no, there's no need. You have all the information you need to just state the flat fee is based on the estimated time, and work involved. So far I've never been asked what my hourly rate was when I give them the flat fee ideology. I do have providers ask what my incentive is since I'm not collecting a percentage and my answer without hesitation is "My reputation" and that usually suffices :)
NJ is not bad really, I used to live and work in NJ but after I moved I stopped doing billing for a little bit but they adopted regulations that require third party billing companies to register their businesses. It is a little tedious and they really don't have any one "qualified in our industry" to "credential" us so they base the registration on your submission of information the need to have to register you.
Very good formula. I am confused that before working for client how can we figure out how much time we will spend on the client?
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Very good formula. I am confused that before working for client how can we figure out how much time we will spend on the client?
In any formula (theory) you are going to estimate some aspects of it. When I say estimate however it is assuming you have gone over the practice and did a good analysis of the receivables, taken into account type of claims, do they do a lot of claims attachments, appeals, workers comp, and you want to account for phone time doing verifications and authorizations. When I know a client is almost ready and it comes down to pricing, I have them complete a very thorough analysis, I then can determine my time in a few different ways. If I have a similar client I can estimate my time based on that client, I can estimate by just the 5/6 patent per hour, etc. It's not exact science, but no theory is. And like I mentioned there are other formula's such as basing it on average of receivables (6 mos - year). If it's a new practice, obviously you cannot do that so since it is new you will also want to take into account time spent possibly credentialing for example and other tasks you might help them setup that are included in your services within your contract.
Doing flat fee is actually MUCH easier than arriving at a %, it's more accurate, PLUS you get paid for your time like any other business would!
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Thanks so much ladies. I have a question... I know I read it some where here... is sc and nc illegal to billing a percentage? I know NJ is sticky and I am now charging flat rate EXACTLY as michelle said. Thanks
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Hey Charlene,
I as well have a twisted mind. We all have to to do what we do! LOL
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Very good formula. I am confused that before working for client how can we figure out how much time we will spend on the client?
In any formula (theory) you are going to estimate some aspects of it. When I say estimate however it is assuming you have gone over the practice and did a good analysis of the receivables, taken into account type of claims, do they do a lot of claims attachments, appeals, workers comp, and you want to account for phone time doing verifications and authorizations. When I know a client is almost ready and it comes down to pricing, I have them complete a very thorough analysis, I then can determine my time in a few different ways. If I have a similar client I can estimate my time based on that client, I can estimate by just the 5/6 patent per hour, etc. It's not exact science, but no theory is. And like I mentioned there are other formula's such as basing it on average of receivables (6 mos - year). If it's a new practice, obviously you cannot do that so since it is new you will also want to take into account time spent possibly credentialing for example and other tasks you might help them setup that are included in your services within your contract.
Doing flat fee is actually MUCH easier than arriving at a %, it's more accurate, PLUS you get paid for your time like any other business would!
Thanks Linda.
I will try with my next potential client.
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Thanks so much ladies. I have a question... I know I read it some where here... is sc and nc illegal to billing a percentage? I know NJ is sticky and I am now charging flat rate EXACTLY as michelle said. Thanks
NC is, SC is ok so far. My opinion is to go flat fee across the board so you are assured 100% OIG compliant. NJ is ok too.
It's important to know that in the states it's not a good idea, it's because it's illegal for the provider; NOT the Billing company to enter into any fee-splitting arrangement.
NJ just has funky registration requirements, which are a pain, however I like the idea and hope the other states follow suit. Gives us better credibility.
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Thanks Linda - I will do Flat Fee - oh by the way... sorry I call you Michelle! Duh...
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Thanks Linda - I will do Flat Fee - oh by the way... sorry I call you Michelle! Duh...
Your welcome, if you need help with coming up with a formula let me know!
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will do, thank you so very much!!!