I look at my set up fee as MORE than just money/costs associated with setup of the client. I also look at it as a "security" payment. MANY billing companies will be brought in to clean up a mess, or maybe to cover for a leave of absense and they won't know it until they have done all the work in setup and then they are released by the provider because they don't need you anymore. Another reason I think of it as a security is as a measurement of the practice's professionalism and ethics. I usually set my setup fee as 50% more than what I think it should be, I will then talk with the client about it, go over their practice, needs, run an analysis and quote them a fair price, IF they hang on the setup fee, or they turn me down because of the setup fee then there's a good chance it's a practice I DO NOT WANT anyway. If they don't balk, then I use it as an extra marketing strategy and will give them a contract and tell them I will waive 50% of that setup fee if they sign by a certain date (usually 2-3 business days).
I have never NOT charged a setup fee. I wouldn't either not even for the smallest provider. I have charged anywhere from $100 to $5000 start up fees depending on the client, work involved, and current setup of their billing.
