The first thing I said was that, unless a client's income varies significantly, a consistant flat fee will end up being some percentage of the income that the biller brings in for the client. This is a math statement, not a political one.
I suppose when you take two numbers you could indeed make them come out with the same mathematical formula to arrive at the same number, that is correct. So when I made $1300 BEFORE expenses doing a % and then after converting to flat fee $2100 as example for one small solo provider I've kept through my transition to flat fee, that would come to 8% ... finding the % for the $2100 would be about 13.5% (not taking into account expenses, sliding scale for new patients/practice growth) So sure.. I found a calculation to come to a %. But still the flat fees I charge are not "constructed" from revenue percentage at all.
If your client's practice stays relatively stable for the next 36 months, you would "earn" roughly the same amount of money if you charged him that percent rather than your fee. This is a math issue, not a political one.
No, I wouldn't earn roughly the same. Your not accounting for client expenses, OR perceived value of work (AMOUNT of work done) that % is before you pay expenses and with NO baring of work involved! The flat fee I collect already has expenses deducted and the sliding scale applied for provider growth (New patients) So how can you say you "earn" the same? Not by a long shot. It took me a long time to really learn about perceived value in business and if you present it the proper way from the get go you will NOT have a problem. % may be the "simplest" way, but it's NOT representative of value, and hard work. It's a number a biller would come up with that is going to sound good to the provider. You know this, I know that, why side step it? Billing companies charge a % only because they know the doctor loves the idea that "You don't get paid until they get paid" that is the only advantage aside from it sometimes being the "simplest" of ways. With flat fee, there are no surprises, I get paid what I AM WORTH and for all time I put in. No more spending HOURS on one appeal only to get paid a small percentage of what I collect on that appeal maybe a month or two later.
Another thing to consider is that at the various seminars put on by the carriers and Medicare and even the AMA, they are advising physicians to be extra cautious with PM companies and the method of charging a %. The OIG frowns on it, it's an open door to the end of it, and it is indeed an incentive to commit fraud. In my opinion only in states OTHER than where it's permitted, I do wonder why billing companies are undercutting their services when it really is simple to come up with a better formula to where everyone is satisfied and they are earning by the amount of work they do as well as the quality and efficiency of that work. In states where it's prohibited.. It's blatant disregard for the law and the providers you are signing.
Translation: your flat fee costs the doctor more than a standard 6% - 7% percentage fee would cost him. In a state where fee-splitting is not illegal, you might be under-bid by someone else offering to do the billing for a percentage fee. From the time I started reading your comments about fee-splitting, it occurred to me that this is the bind you (and others) are in. If you charge a percentage fee high enough to cover your costs and give you a profit, the doctor won't hire you. That is the real reason you prefer a flat fee over a percentage one (ignoring the anti-fee-splitting laws of New York for the moment). It covers your costs and gives you a profit (I assume), but it costs the doctor more than he would be willing to pay if you offered him a percentage fee. It's OK to admit to that. There is no point in working if you can't make a profit.
Yes, but again we are talking "PERCEIVED VALUE" A doctor is going to jump to the percentage as what he perceives to be cheaper. If you don't QUOTE a percent of revenue and you calculate a monthly flat fee/sliding scale, they don't HAVE a % in their head. I don't justify or explain my method of billing beyond telling them that in the state of NY THEY are prohibited from entering into a fee-splitting arrangement. USUALLY that does it, but when I was in PA doing it, I merely just said, with this method of charging I am compensated for my time as well as costs and the number will ALWAYS be significantly cheaper than going in house. Again, though I've never gotten into any argument and have never been challenged further on it. Our perception that doctors are "greedy" or "inconsiderate" or "cheap" is wrong. We are the ones that got hung up on the
old and tired marketing ploy of "we don't get paid until you get paid". Not them.
