Medical Billing Forum

General Category => General Questions => Topic started by: WMBS on July 19, 2011, 10:16:01 AM

Title: New Client Contract problem
Post by: WMBS on July 19, 2011, 10:16:01 AM
I strictly bill for mental health providers.  For the past 6 years I have always billed on a percentage basis.  Now that I have recently purchased the ebook "Pricing Your Medical Billing Service" it has become apparent that I have been underpricing my services.  I am on the brink of loosing my business and now possibly my current clients due to changing them from percentage billing to a flat monthly fee.

My largest client is now complaining that the flat monthly billing will not work for their business because they will be fluctuating during certain periods of time in throughout the year.  This is one of my problems because of the big fluctuations in income.

I do full service billing (VOB, Auths, claims, reports, day sheets, etc) and now they are complaining because there are certain EAP reports they fill out and don't feel that I should be collecting on those even though I have to maintain the accounting in the database.

If anyone can help me with the right wording of justification for the amount of work is still involved on my part I would appreciate because I am really brain dead right now.

Title: Re: New Client Contract problem
Post by: Michele on July 20, 2011, 10:19:50 AM

    If you are on the brink of losing your business then it obviously isn't working for you.  Unfortunately your clients are used to getting a lot of service for a small amount and it will be hard to get them to see.  On the flat monthly fee for the largest client, maybe you could arrange to evaluate the fee quarterly or bi-yearly to show them that even though money fluctuates throughout the year it all evens out in the long run. 

    If you are in a state where fee splitting is illegal you can tell your clients that you just became aware that your current method is causing them to break the law and you don't want to be responsible for that.

    In any case, things aren't working for you the way they are and you're going broke.  You've got to find a way to change it.  Hopefully some of this will help.

Best wishes! 

Title: Re: New Client Contract problem
Post by: WMBS on July 20, 2011, 10:45:13 AM
Thanks Michelle, I know that many billing companies use the percentage in Texas and that is what I have always used since there has never been any clear determination in our state about fee splitting.

I offered this client a percentage rate at 2.5% higher than what I was billing and she felt the 31% increase was not right.  They would be better off with the flat monthly rate because I built in the buffer if they go over or under the amount of claims per month and explained that it evened itself out according to last years figures.

I felt better after my smallest client agreed to the new contract and they will be paying 3x more than they are now.  I stood my ground and told my largest client that I would only agree to the flat monthly or the new % I gave them.

Haven't heard back but if all my other clients agree then I should be OK until I get my coding certification so I can branch out to other business.
Title: Re: New Client Contract problem
Post by: Michele on July 24, 2011, 07:27:23 PM
Good for you!  Hope the rest work out as well!

Title: Re: New Client Contract problem
Post by: PMRNC on July 27, 2011, 04:33:11 PM
Have you ever called your mortgage company to complain with how they charge you? The Electric company? ... No of course not. So my rule is.. I don't explain it. This is my fee, take it or leave it, business owner's do not need to explain or justify their fees if a client complains.  Once you do begin to do that, you'll find yourself always having to explain why you are raising rates.. This is a crappy economy, this is the way the world goes around.  Explain it once in your contract, if you are billing a flat fee you do NOT need to go into detail how the fee is calculated, beyond explaining what the fee includes.  If you signed a lease, your rental agreement price is listed in the lease but it's not explained how they got to that fee (insurance, taxes, etc etc)  I had one or two clients question me about increases and when I moved from percentage to flat fee, but I really didn't comment, if they asked why, I simply explain what I just said here.