Author Topic: Can you make a profit by charging 4%?  (Read 22953 times)

PMRNC

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Re: Can you make a profit by charging 4%?
« Reply #45 on: November 29, 2012, 03:54:47 PM »
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There are five major medical billing companies in United States, most of those in business know who they are, they do about 80% of all business in medical billing. They ALL use cutting edge technology.

That's absolutely incorrect and what are we basing the word "MAJOR" on? What study would show only 5 "major" billing companies? This is absolutely FALSE since I happen to know a hundred times that amount so I would want to know what study this is from and how they conclude those 5 companies are "major"  ??  Statistics are worth nothing.. Of course if this study took 10 companies to create that study..well then I could understand how they would come up with 5. But really that number is so incredibly low I would have to think they only accounted for 10 companies. We have a network of over 7500 billers of which more than 75% are billing companies, many of which are successful and servicing a nice market of providers. 

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supertaz93

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Re: Can you make a profit by charging 4%?
« Reply #46 on: November 29, 2012, 04:17:23 PM »
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When I make a statement, I give a link to a study, data, or factual basis for the statement.

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There are five major medical billing companies in United States, most of those in business know who they are, they do about 80% of all business in medical billing.

Please provide your link to this information.

Also, tallmanusa, you remind me of this person I know.  That person will ask me a question, but when I reply with an answer that is not what he wanted to hear, he goes on the defensive.  You came to this forum asking if you could make a profit while charging 4%.  You already believe the answer is yes and nothing will change your mind even though facts (experience, business 101, whatever you want to call it) have been presented to you.  When several people have given you advice about your inquiry, you became defensive. Just read back through this thread.  Several members have given you great advice.  You say you are new to the medical billing field yet you act like you know it all so I am not sure why you came to this forum.  However, I believe you are quite the opposite....clueless.  Examples of you being clueless include HIPAA, compliance, and what a medical biller does (read back through this thread and your obamacare thread) 

So why did you really come to this forum? 

tallmanusa

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Re: Can you make a profit by charging 4%?
« Reply #47 on: November 29, 2012, 04:29:29 PM »
http://www.moneyandbusiness.com/business/accounting-taxes/accounting/5-best-online-medical-billing-service-companies

All of the above businesses do very well, and use latest technology, that was the question.

This business is no different than many other businesses, in which a small percentage of vendors do most of the business. Nothing unusual. Surprise? They use technology to get where they are, something wrong there?

Where that figures came from? My discussions with HBMA. It has 600 members, usually those doing well.

Me, defensive? I beg your pardon.

I have learned a great deal from the discussion here and so have many other people.

In essence, this is a tough business, to be successful, and the definition may vary, you have to have cutting edge technology.

Quite obviously my definition of successful is different from many others; but there is nothing wrong in that.

If nothing else, nobody should have any illusion that somehow EHR would not be completely implemented ahead of the schedule.

« Last Edit: November 29, 2012, 04:40:33 PM by tallmanusa »

PMRNC

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Re: Can you make a profit by charging 4%?
« Reply #48 on: November 29, 2012, 04:38:45 PM »
HBMA?   Ahh... ok, I'm starting to see clearer now.

As for the link you posted .. this was first paragraph:
"Below you will find a list of the five best online medical billing companies.  These companies share several common characteristics as they have years of experience, and they comply with all Health Insurance Portability and Accountability Act (HIPAA) regulations to assure that patient records are handled with privacy."

I expected to see HOW they got this information or at LEAST a hint of how they rated them.. but no.    It's no more reliable than If I posted 5 companies and said they were the best.

I'm not going to continue to be argumentative.. time is money of which I'm wasting both.    You came here with questions, but I don't know why since you have found "YOUR" answers.   Good luck to you.

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QueenAlicia

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Re: Can you make a profit by charging 4%?
« Reply #49 on: November 30, 2012, 02:18:02 PM »
Practice Mate/Office Ally is free because they get paid on the back in from the insurance companies.

Thanks for the comments Richard, very helpful.
I agree with you that most billing companies have many things to worry about, HIPAA is not one of them, as long as you follow some basic rules do your best to comply with them.
My impression is that the platform you use is the key to this business, you survive or perish on the system you choose. This is an IT business more than ever, or at least it has become one now.

Office Ally/ Practice mate, I did not think that it was a good enough system that I would want to offer; but it is free.

Kareo/ Practice Fusion is good enough and will do for most practices, cost $299 per month for the top platform, but not good enough for large practices.

What if you have large practices:

There are two that I investigated, I am sure there are others.

Advanced MD
Health Fusion/ Meditouch, this works with ipads as well.

The above two are more expensive than Kareo.

If you charging only 5% your profit is constrained if you offer high end platforms.

I could not pay $30 per hour and be profitable. In addition the technology is so superb, why do I need such experienced biller? I plan to outsource the billing for a fraction of that cost.
I have to make a profit, otherwise I would not be doing this for long. You can charge more, which I would not, or you can skimp on the platform which is imprudent or you outsource, which I chose.
Outsourcing does not have to be offshore, it can be within the United States.

QueenAlicia

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Re: Can you make a profit by charging 4%?
« Reply #50 on: November 30, 2012, 02:36:28 PM »
I was thinking the same thing.  Why ask questions when you are already assuming that you know everything when clearly there is an obvious amount of ignorance for this industry.  Stop harping on EMR and learn the basics of billing first.  How can you be a competitive billing software company but not know the first thing about HIPAA?!


Quote
When I make a statement, I give a link to a study, data, or factual basis for the statement.

Quote
There are five major medical billing companies in United States, most of those in business know who they are, they do about 80% of all business in medical billing.

Please provide your link to this information.

Also, tallmanusa, you remind me of this person I know.  That person will ask me a question, but when I reply with an answer that is not what he wanted to hear, he goes on the defensive.  You came to this forum asking if you could make a profit while charging 4%.  You already believe the answer is yes and nothing will change your mind even though facts (experience, business 101, whatever you want to call it) have been presented to you.  When several people have given you advice about your inquiry, you became defensive. Just read back through this thread.  Several members have given you great advice.  You say you are new to the medical billing field yet you act like you know it all so I am not sure why you came to this forum.  However, I believe you are quite the opposite....clueless.  Examples of you being clueless include HIPAA, compliance, and what a medical biller does (read back through this thread and your obamacare thread) 

So why did you really come to this forum?

RichardP

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Re: Can you make a profit by charging 4%?
« Reply #51 on: November 30, 2012, 07:34:18 PM »
1.  tallmanusa - I went into detail just to give you some things to think about as you contemplate starting a business.  Hopefully those points will also help stimulate the thoughts of others who might pass this way.  You have seriously missed my points if a.) you still think this is about pencil and paper versus technology (it isn't), and b.) you think that better technology would help my doctors earn more money (it won't).

2.  Bottom line is, the technology does not get the doctor paid all he is due.  It is the knowledge in the biller's head that gets him paid all he is due (or not, if the biller is no good).  If you are going to charge a percentage of monies collected, you will make more money if you help the doctor make more money.  Billers who know what they are doing can help you with that.  Software cannot.  But, judging from your responses here to me and others, you don't seem to have first-hand knowledge of what you are talking about.  So I'm guessing you would not know what to look for in order to hire good billers.  So - it looks like you are simply interested in skimming whatever money you can off of the top, using technology, and nevermind helping the doctor get properly paid for all the work he does.  I have nothing against technology.  I'm just pointing out to you that the technology is not what gets the doctor paid all he should be paid.

3.  I have been exposed to a good mix of older doctors, and younger doctors just setting up practice, and doctors of any age who just "put in the hours" in some doctors' group or University hospital.  The younger doctors are gung-ho about adopting technology.  Mainly because they do not have the perspective of the older doctors.  The older doctors know how many patients they can see in a day, and generally how much money they can make off of that many patients per day.  So they can recognize the drag on their efficiency created by having to use an EMR on all patients.  As I said above, this amounts to a loss of about 1 1/2 hours per day.  The young bucks and does just starting out don't have that frame of reference.  So they have no concept of the money they are leaving on the table by using EMRs and other technology.  As the older doctors die off and more newbies come on board, doctors won't know any other way of life.  Not having a comparison, there will be no basis for cognitive dissonance.  They will never know how much money they could have made without the EMR, so they have no reason to be unhappy with the EMR.  Same thing goes for the doctor paid by the hour.  He doesn't care how many patients he sees in a day, his pay stays the same.  So why should he not be satisfied with the EMR?  It is no skin off of his nose.  These folks are probably over-represented in the survey you pointed to.

4.  You said "It is anticipated that the vast majority of practices have already adopted EMR or in the process of doing it; (55% in 2011)".  Speaking statistically, 55% is not a vast majority, as your quote claims.  But consider this also:  assume that four doctors have implemented an EMR and 100,000 doctors are "studying" the issue.  We could say about this fictional group what you quoted from your link: the vast majority of the 100,004 doctors have already adopted EMR or are in the process of doing it.  "Studying the issue" counts as being in the process of doing it.  How much information does your quoted statement give us about the true state of my fictional group of 100,004 doctors (none), even though you can argue that the statement is true?  Only four out of 100,004 doctors have actually implemented an EHR.  But by using your quote, and including those who are only studying the issue, we can make it seem like the number of implementers is much larger.

There are a number of good IT writings for doctors on-line or in paper magazines.  None of these writings claim that the vast majority of doctors have adopted EMRs.  Rather, they state the opposite.  This quote from your link to the CMS article is closer to the figures I am familiar with: Among solo practitioners, 29% were adopters of EMR systems.  For this kind of discussion, I think it would be useful to distinguish between solo practitioners (who's livelihood depends upon the efficiency of their own efforts), and corporate physicians who punch a clock and use whatever technology their employer places in front of them (and who's pay is only loosely tied to their productivity).

Finally, the detail of the CMS report reveals that the statistics you quote were derived from the response of the 3,180 physicians who responded to the survey.  The initial sample size was around 10,000 physicians, and about 7,000 refused to participate.  The detail says the majority of those who refused to participate were nonadopters of the EMR technology.  So - about half of the 3,180 physicians use EMR (1,700) and slightly less than 8,300 don't (of the initial 10,000 physician sample).  That proportion (about 21% adopters) is more in keeping with the anecdotal evidence I have run across.  If you haven't read the detail of the CMS report, you should.  It is enlightening.

5.  You seem to have some seriously rose-colored glasses, or you are just tweaking the readers of this forum.  At any rate, the American way is to go for it, so go for it.  Your goal is to make a buck off of creating a business.  Which is a completely different process than making a buck off of helping the doctor get paid all he is owed.
« Last Edit: December 01, 2012, 02:30:58 AM by RichardP »

tallmanusa

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Re: Can you make a profit by charging 4%?
« Reply #52 on: December 01, 2012, 06:55:18 AM »
Let us be clear, my goal at this time is to challenge the supremacy of the five best rated companies. The first step is to know my competition. I have to be better and cheaper than they are. It is not an easy task, and I certainly would not get there without a clear understanding of how they operate and what the  market is. How and whether I would achieve that, remains to be seen. I have no illusions to road to riches. It is not just money; most people who build companies do not do it for the money.

Incidentally, even if you are a one person business, you are up against the same companies. Though one person can provide personal services, these companies cannot. No doctor will ever hire you without looking around what is available. Food for thought for all those who are looking for new clients and wondering why they can't land them.

I plan to have branches all over the country, that would provide personal services, and do not plan to outsource off shore at this time. I hope to have ten branches by the end of 2013.

I posted this on another thread.

http://www.moneyandbusiness.com/business/accounting-taxes/accounting/5-best-online-medical-billing-service-companies

I gave this link before.

One is a public company and records are freely available. Four are private but still we can tell plenty about them from information available.

Here is what I found.

1. The founders are not involved in the day to day business.  I cannot tell if they ever were, my impression is that they  were never involved in the operation. They are ALL men.
2. The founders are doctors or MBA or IT people.
3. At least two companies were IT companies before they got involved in Medical billing. One company has a logo that says " An IT company ".
4. They all outsource their work, they will tell you if you call them, I did. They freely admit that they outsource off shore. Two say that they " outsource locally ". One company stated that they had 1500 billers working at their location in Islamabad, Pakistan and another 2000 billers at another location in Kashmir. The addresses of these locations are available.
5. They operate through a network of sales people (not billers); I did not think that the salesmen were particularly well informed about medical billing. The salesmen freely admit that they are salesmen not billers.

They all use cutting edge technology, an integrated EHR/ PM web based platform, exactly the same thing I plan to offer. Some would not take a client who does not want the package, some will, but reluctantly. Some will work around an existing EHR - for an additional fee.
What does that tell you?

There are lot of things you can tell about them.

« Last Edit: December 01, 2012, 08:20:15 AM by tallmanusa »

PMRNC

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Re: Can you make a profit by charging 4%?
« Reply #53 on: December 01, 2012, 09:42:30 AM »
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What does that tell you?

I don't know what it tells everyone else but I know what I'm thinking..  I don't need to sell cutting technology because I've got something those companies that outsource overseas will never have.... PROPER education, REAL experience, and above all business ethics.

I looked at that link actually, I have heard of Two of them.. I've operated my billing company since 1997, prior to that I spent 10 years working for insurance companies. Since 2000 I've operated one of the largest online communities of medical billers. None the less, I took a gander at that list of top 5..

Allstate Billing..  Interesting, I'm from NJ (born and raised) near this one.. never heard of them.. also the Dept of Insurance/banking requires ALL third party Medical billing companies be REGISTERED with the state.. they are not there:  http://www.state.nj.us/dobi/division_insurance/managedcare/tpblist.html

Athena Health- This is the one I have heard of, possible because they are an IT company, article misleads saying they service over 30,000 clients, however their own claim to fame is: Medical providers live on athenaNet®: 38,145     They provide PM/EHR software/IT.    They also list NJ as a place of doing business AND they registered :)    Those are bad things at all.. I'm just saying this article claims they are "one of the five best online medical billing companies."   Also.. THIS is an ARTICLE.. Not a study by any stretch of the imagination. They provide NO stats on how they arrived at these companies being the BEST.

ClaimCare - not much to really say, first time I've heard of them, nice website though.

MTBC.. ahhhh that's where you got your 4%. .. Of course now they are 5%...  (yes, heard of them.. many of us billing companies now have doctors who have too <G>). Least they are registered in NJ. :)   

PGM - Hmm I'm seeing a pattern with NJ billing companies (this one too is registered)  This one vaguely sounded familiar but when I ran their name through my own database I realized it sounded familiar because I have 11 billing companies with the same name.

Not knocking them, just stating some facts and calling out this bogus article about the five best online medical billing companies. Perhaps they can write what they did because they used the word "online" maybe they typed in Online Medical Billing companies in NJ, into Google ?  My point was.... don't confuse "articles of opinion with real stats"    If I were to run a membership report from my database I would come up with my own top 5 list of companies and none would include those 5.   That wouldn't happen however unless I backed that up with HOW I arrived at that conclusion.  I can write an article right now and say "List of top 5 Soda's in the US"  .. would that make it so?       

When I started my billing company I DID ZERO research on companies you would say were my competition. I don't actually think of any company I know of as competition. I networked with several companies both locally and not locally but never did the word "competition" come into play. I didn't NEED to try and compete. Clients and potential clients get what they pay for with me and I've never haggled, over my fees. If I client told me they were looking at a company who could do all that I could do for 4%, I simply shook their hand and told them I'd welcome their call in 6 months, I've had that happen where providers were shopping billing companies and I would leave my biz card and I'd hear from them again.   I had one client that went with a company (one we may or may not have talked about <g>) and is still digging out of a legal mess and I could not help him as he was in too deep.  I have another client now who found a fairly large billing company who turned around and offshore outsourced w/out notifying them which also landed them in hot water with patients, messed up their accounts, patient complaints because they couldn't get anyone to explain in English what was going on.   Yes, I have had a great many a success in cleaning up "cheap" billing companies work.   I guess in a way you can say.. WE need more of them <g>
« Last Edit: December 01, 2012, 09:44:51 AM by PMRNC »
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tallmanusa

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Re: Can you make a profit by charging 4%?
« Reply #54 on: December 05, 2012, 12:38:43 PM »
Market research is the first step towards developing any business. A business should have a written business plan, and I do. Competition is an important part of it. Businesses who fail to plan, plan to fail.
When Walmart comes in, smaller businesses go away; there are few and far butchers left, because they have to charge more money. But butchers can survive by performing personal services, of course at higher cost, there will always be a market for them. So goes for medical billers, but just like butchers, they would have to find someone to pay for them, not easy considering that Walmart is around the corner.

A closer look at Athena Health, revealed that they outsource their work to Channai, India, according to their website. They have close to 40,000 providers.  They charge about 6.5%.
That information is buried on their website. They have a fire wall, patients and clients cannot call India, they have to call the local offices who then handle the problems consulting the Indian office.
Lesson learned.

MTBC  has only sales office in USA. They charge 5%. I don't know how many clients they have, but they once offered to buy out all the small businesses owned by the entire membership of AHIMA, which has a membership of 53,000. I am sure not every body sold out but many must have. They have running offer to buy out any small time business that wants to sell.

The inference is clear, these businesses are behemoth, and we all know how they got there.

best biller

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Re: Can you make a profit by charging 4%?
« Reply #55 on: December 05, 2012, 06:49:40 PM »
could someone explain me?
if e clinical works offers to do the billing for just 2.9%, is there any reason for a doctor to do it with a small company for a higher rate?

PMRNC

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Re: Can you make a profit by charging 4%?
« Reply #56 on: December 06, 2012, 09:14:06 AM »
Quote
could someone explain me?
if e clinical works offers to do the billing for just 2.9%, is there any reason for a doctor to do it with a small company for a higher rate?

This is what I was afraid of.. this kind of question and discussion which I feel is a bit inappropriate.. as far as I know e clinical works is a software product/service, I sure hope it's not a billing company to which someone would come on here to price shop.   If so I'd have to say that's "CHEAP"

One more comment on this and I'm done with this discussion.   Yes maybe in many industries market research is important in a detailed way, however this industry isn't one of them.  If you decide to "compete" rather than network and you are shopping other services, do NOT be surprised if you receive a cold shoulder along the way. It's frankly TACKY IMHO.   Secondly..  I've lived by networking and NOT doing this type of "UNDERCUTTING" and for that reason alone I've received numerous referal's and have consulted with numerous billing companies as well as networked with them.    I suggest if your trying to "UNDERCUT" that you step back and then learn about "Perceived value"   

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Businesses who fail to plan, plan to fail

Yes, all businesses should have a plan, but you have repeatedly looked at the "pricing" angle only.  I certainly haven't failed and I have NEVER undercut another billing company nor would I.  My services are worth more than 4% hands down and my services will OUT do the 4% market any day.  Nuff said.
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Michele

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Re: Can you make a profit by charging 4%?
« Reply #57 on: December 06, 2012, 10:21:47 AM »
could someone explain me?
if e clinical works offers to do the billing for just 2.9%, is there any reason for a doctor to do it with a small company for a higher rate?

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RichardP

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Re: Can you make a profit by charging 4%?
« Reply #58 on: December 06, 2012, 08:11:21 PM »
best biller - some doctors do really complicated work, others do really simply work, and others are somewhere between those two extremes.

The doctors who do only a few things, over and over, and whose accounts receivable are also simple, could get by with a cheap billing setup such as you describe.  In such a situation, there is little chance that the doctors will be leaving money on the table through their ignorance of how to bill properly.  In this situation, the doctor is only paying for billing, and anybody can do it.

The more complex the medicine gets, the more likely it is that a doctor will leave money on the table because of incorrect billing.  The doctors who do more complex medicine, and maybe also have physician office labs (POL), pay not only for billing, but also pay for the knowledge that their biller has (if they are any good) that can help the doctors not leave money on the table through poor billing practices.  A good biller can get these doctors more money than what the biller costs them. 

I give an example on Page 3 of this thread where a group of doctors, using very sophisticated technology and software, are still leaving about 30% on the table - due to them not knowing how to bill for their services properly.  A biller who knows what s/he is doing can recoup most if not all of that 30%, which will more than pay for the 5-8 percent the biller may charge.  It is not likely that the company you mentioned would recoup any of that 30%.  Therefore, their low rate is of no benefit at all to that group of doctors.

A good biller will manage the finances of the doctor.  If the medicine is complex, the finances will be complex, and the need for financial management will be correspondingly more complex.  If the medicine is simple, the finances will be simple.  And the need for financial management will be simple or non-existant.  But consider this, based on a recent real-life encounter with the doctor's wife.  A doctor at a sizeable practice just up and quit one day.  The practice called a highly-regarded staff physician away from UCLA Medical Center.  Been a physician for a while.  First time in private practice, where his income depends on his own efforts.  Pays a reasonable fee to some off-site company to do his billing electronically.  He gets EOBs electronically.  But has never needed to look at the EOBs, since he has been a staff doctor for all of his professional life and somebody else looked at them.  He just collected his salary.  Doesn't really know how to interpret them, so has not looked at his electronic EOBs since he took over the practice.  Some of you are already asking the relevant question in your heads:  if he doesn't look at his EOBs, how can he know how much of his charges are simply being written off rather than persued?  And without knowing the answer to that question, how can he know that he is getting paid all he should be getting paid?  How can he know that his billing company is actually doing the work he is paying them for?  My wife gently pointed this out to the doctor's wife, and the doctor's wife was both flabbergasted and appalled.  That anecdote is another example of how doctors benefit from the services and knowledge of a personal biller.  If the personal biller is any good, they will force the doctor to pay attention to his finances - which is to the doctor's benefit.
« Last Edit: December 06, 2012, 08:47:21 PM by RichardP »

PMRNC

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Re: Can you make a profit by charging 4%?
« Reply #59 on: December 07, 2012, 06:36:30 AM »
I just couldn't sleep w/out wondering something.. no matter HOW I run the numbers there's NO way I could offer (nor would I, of course) my services for 4%.. I am willing to BET that those "cheaper" servicing companies hire just the bare bones minimum of data processors and how the hell are they buying E/O insurance?   (my bet, is they are NOT) But it makes sense, when you look at all the fraud cases filed, they are all the larger billing companies. Even more suits filed by physicians suing larger billing companies. 
Linda Walker
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