Flat Fee Billing

[Lindat]

Hello, I just purchased and read the new E-Book, Pricing Your Medical Billing Service, and I have a couple of questions:  For a Billing Service that will have employees and more than 1 client, would you still use the formula outlined on pages 28 & 29 for adding additional clients? 

If so, would you add the cost of the employee's salary in addition to the owner's salary as referenced on page 29 ($25.00/hr + employee salary + office expense) to come up with the hourly rate? 

If not, how is the owner's salary calculated as the business grows?

By the way, I thought this was an excellent E-Book!

[Michele]

Thank you for the feedback.  Glad you found it helpful. 

Regarding the salary, if you have employees you may need to consider your hourly rate higher.  $25 might not be enough to cover the cost of an employee plus the owners salary.  But the owner's salary won't be recouped just on one client, it is spread over many clients.  When you are a one man band, the $25 is about average.  However, you can't go too high or you'll be overpriced. 

Hope that helps!

[TammyL]

I to purchased pricing your medical billing service but after reading it if I charge flat fee billing aint I losing money because I charge a percentage between 6-8 which is allowed in the state of missouri I seen your examples but I also came across another example of flat fee billing by taking the number of claims per month and multiply that by  2 or 4 minutes at 50.00 an hour so example 120 claims x 2 = 240 minutes or 4 hours x 50 = 200.00 plus your other expenses that you showed on page 28  so if i did flat fee it would be $513.76  but if i did percentage billing at 8% whats collected of 6600 average claim paid 55.00 x 120 claims for the month it would be 528.00 so after doing my totals its not a huge gain just $14.24 so now I see the diffrence . Thanks you guys this really helped in pricing my services. Should I give the client the option of percentage or flat fee or should I stick to percentage billing

[Michele]

Whewwww.  That was tough to follow.  Glad we could help.   

[PMRNC]

When you are calculating your monthly fee.. DO not give your clients this formula, there is NO need.  A simple explanation is that your fee is based on your time and expenses. PERIOD. Trust me if you start explaining this formula you are going to take hits and be explaining it for the next 20 years.  My flat fee is formulated by using what I DESERVE per hour, minus expenses of course, so if I want to make $50 an hour I can and never have to explain that.

[Michele]

Exactly!  They don't need to know what you think you deserve an hour.  They would never agree no matter how much you put!  They have no idea what you do on your end.  If you are good you deserve a good fee.  And if you aren't good and you charge high, you won't have many clients.