Medical Billing Forum

Starting a Medical Billing Business => Starting Your Own Medical Billing Business => Topic started by: LW5689 on September 03, 2008, 12:20:20 PM

Title: Set up Fees
Post by: LW5689 on September 03, 2008, 12:20:20 PM
I am just starting out and would like to know if anybody charges "start-up fees" to their clients and if so how much?  Thank you.  Lori
Title: Re: Set up Fees
Post by: Alice Scott on September 03, 2008, 12:31:13 PM
Hi Lori,

We personally do not charge set up fees.  We tell the providers we are in this for the long haul so we average out the work of setting up a new client over the long term.  I admit there are instances where we should have charged a set up fee.

Title: Re: Set up Fees
Post by: MMBS1 on September 03, 2008, 02:13:45 PM
Hi Lori

I thought about this too and for myself I charge a set up fee. It takes time to enter in all the patient and insurance information. Especially if it is just you entering the information.  I hope this helps!

Title: Re: Set up Fees
Post by: LW5689 on September 05, 2008, 06:41:14 AM
Thank you so much for your responses.

   Ashley, do you have a set fee that you charge for each client?  What fee range is a fair and reasonable one that wouldn't scare off a potential client?  Thank you so much for your help.
Title: Re: Set up Fees
Post by: MMBS1 on September 06, 2008, 10:38:43 AM

Each client is different. It depends on the volume of patients I have to enter and their opening balances and such. I charge anywhere from $200-$500. $200 would be typically for a small practice (individual) who nets about $9,000 a month on average. I would enter the patient information, any opening balances (if there are any from previous billing companies), and charges. Not to mention getting the provider pre-enrolled with any insurance carriers that require this for electronic billing. I hope this helps!

Ashley  :)
Title: Re: Set up Fees
Post by: Trisha Reyes on September 08, 2008, 11:54:52 PM

I don't have my first client yet but I have already bought a costly practice management software that charges me set up fees. I do not have the money to front so I plan to charge my clients a DEPOSIT that will be returned to them in equal payments over the first six months that they do business with me. This will allow the client a chance to see what I can do for them during that time period, at that point asking them to sign a contract. If for some reason, they decide not to finish out the first six months when they do terminate they forefit the reamainder of the balance.
Title: Re: Set up Fees
Post by: Michele on September 09, 2008, 10:30:33 AM
I would be careful with the way you are planning.  You may want to just have a straight set up fee, that if they stay with you for x amount of time you credit back to them off their bill.  I'm afraid the way you are doing it makes it obvious to the dr that you are just starting out and don't have the funds to cover him.  You are making him give you $xxx up front and then giving back $1/6 every month.  It looks like a forced loan.

Just a thought.

Title: Re: Set up Fees
Post by: PMRNC on September 26, 2008, 07:36:55 AM
I never NOT charged a setup fee, I did not think of my setup fee in accordance to what the doctor has to pay out, but rather what my services were worth. Not charging a setup is basically doing a LOT of work for free. My setup fee also worked very much like an added piece of security. Many doctors in a crunch with their previous billing company or staff would find a billing company to go in, fix and then dump them (happens a lot!). I charged anywhere from $100 up to $2000 taking many things into consideration. A doctor who even slightly balked at my setup fee was not a client I wanted so the setup fee told me something about that client before even getting started. I also used my setup fee as a negotiating and marketing tool. I would do mailings that would offer 30%-50% off my setup fee if they signed with me by a certain date. Or I might negotiate with a provider who seemed to not be picking my fees apart by telling them, I would give them $100 off or $200 off if they signed within 48 hours.
Never give your expertise away, and never fall for the doctor who tells you he's waiting on other "bids".  I never did "bids" as it was beneath me. I charged according to what I was worth.

Linda Walker
Practice Managers Resource & Networking Community (PMRNC)
Title: Re: Set up Fees
Post by: MMBS1 on September 29, 2008, 09:05:48 AM
Hi Linda

Great post. I agree with the way you think. I had the same idea with my mailings. It's a great marketing tool. There is a lot of work involved in the getting the doctors set up. It's worth it for them to pay the set up fee. You're putting hard work in. By the way, are you with any national associations?

Title: Re: Set up Fees
Post by: heritagemedicalbilling on October 30, 2008, 08:44:22 AM

We get charged by our software vendor to set up new accounts and it it a lot of work setting up the database, so we charge the vendor charge plus $350 as an initial one time set up fee. 

Title: Re: Set up Fees
Post by: PMRNC on November 01, 2008, 01:09:39 PM
I never used a software with a per client or setup fee but a lot of your ASP models are charging them and it's an understandable charge and up to industry standards today. I would say if you are being charged a setup or per client fee by your vendor it stands to reason to collect that as a setup fee. I never did refundable deposits because again, it really takes a lot of time and effort in setting up a client/practice and I believe you shoudl be compensated for your time as well as setup costs your vendor puts on you. For example if your vendor is charging $300 per practice setup (one database) your setup fee should at LEAST be this amount. If it were me I would charge that on TOP of my setup fee and maybe offer a discount giving them a sense of urgency to "sign" on the dotted line <g>
My setup fees ranged from $200 -$2000 depending on what I found after doing a complete practice analysis which consisted of analyzing reports (I try to get 6 months worth) such as A/R, Procedure codes, denials, managed care adjustments, etc. Also I took into account the services they wanted, sometimes full practice management for me meant maintaining managed care contracts and credentialing.. other times it might have been A/R clean-up only.. always think outside the box. Your setup fee can also tell you a lot about a potential client whether you realize it or not. The ones that balked or complained about it usually meant they were after something for nothing. With my first few clients I "cut" my deposit and let them know I was giving them a discount, but I never waived it completely.

Linda Walker - PMRNC
Title: Re: Set up Fees
Post by: Anne on January 23, 2009, 01:17:17 PM
I just read here with interest because I was recently asked to do billing for a new client.  I bill now for two PT/OT Groups (home business).  I never charged any start-up fees because we all started this together - me as the biller and them doing the treating of patients - just a few patients to start - now it's grown and I've upgraded my software and now billing electronically.  This new opportunity just happened - word of mouth - I didn't go out looking for more business.  But think now I'm ready to take on more business.  However, I just spoke w/ office manager once but evidently billing person they had before "messed things up"  - I don't know how badly or exactly what all will be involved in the "clean up" but willing to take it on.  There are two of us now doing billing in my business.  Anyway, my question is:  is there a guideline of some sort to determine how much to charge for clean-up - depending on size of practice?, how many claims per week?, how many months back clean up will involve?. 
Also, I charge providers that I already bill for, 7% of collectibles - was willing to do that since, as I said we started small and I appreciated them giving me the opportunity.  Now with this new client, if it works out as I'm thinking, will be different and I'm not sure if 7% is enough, or does that sound reasonable, or if I should charge a different way?  Also, I don't have a contract w/ my providers.  Is there a place to look for a standard type of contract? 
I know a lot of questions here - I have more even :) but this is for starters.  thanks, Ryanne
Title: Re: Set up Fees
Post by: Michele on January 24, 2009, 08:21:08 AM
There are no set guidelines for doing cleanup.  You just have to decide what you will do and how you will charge.  First I would pick a set date I'm willing to go back to, like June 1, 2008, or maybe even 1/1/08.  Some will be denied due to timely filing, but some plans allow a long time.  Many times clean up just involves billing the claims out and it's really no different then regular billing, just older dates.  It depends on how the previous biller 'messed things up'.  We did this for an account once where we submitted the old billing and most of it was just paid on the first time around.  There was no extra work for us.  We just added the clean up in with the regualar billing and charged the same amount.  It was a large account and we wanted to establish a long term relationship with them so we let them know we were doing it as a favor.

If the cleanup is going to be more intense then you should find a way to bill for it separately and get a higher fee.

Your fee really depends on a lot of things, where you are, what type of specialty etc.  7% is around the going rate, you will find some services who charge more, but some who are charging less.  I wouldn't recommend going less than 7% no matter where you are in the country.

I have not been able to find a sample contract.  Some have offered on this forum to show one, but it has never seemed to surface, not sure what happened.  Anyway, we have a very simple contract that our lawyer looked over and approved.  It is very basic and covers us both for HIPAA, explains what we will do, what we will get paid, and when the provider should pay us.  It has worked for us for 15 years.

Title: Re: Set up Fees
Post by: Anne on January 24, 2009, 05:34:46 PM
Thanks Michele,  Your answers were as I expected - mostly - "it depends".  My business partner and I are going to meet w/this new client next week, so will probably have more specific questions at that time.

thanks,  Ryanne

Title: Re: Set up Fees
Post by: MedicalBillingCourse on February 03, 2009, 10:58:13 PM
My beliefs on this are in line with Linda's.  There has never been a time that I have not charged a set-up fee.  Not only does the fee pay you for your initial set up time and work, but the fee is also a great way to get your prospective client "off the fence" and on to "signing your contract" by offering a discount "if the contract is signed by XX/XX/XX date".  :)
Title: Re: Set up Fees
Post by: Alice Scott on February 05, 2009, 02:37:58 PM
Good idea on the incentive.  We have been burned more than once by not charging a set up fee.