Medical Billing Forum

Starting a Medical Billing Business => Starting Your Own Medical Billing Business => Topic started by: Tameka79 on July 18, 2017, 03:10:29 PM

Title: Flat Fee Pricing Question
Post by: Tameka79 on July 18, 2017, 03:10:29 PM
Hi. I hope this is not a ridiculous question, but I have been reading your book on pricing and I am not sure if I am doing something wrong, but I am starting to wonder if I can really make more money starting my medial billing business.

Currently I am working full time, 40 hours a week, billing for a provider. I get paid hourly and that is pretty much what I would want my hourly rate to be in my billing business. I figured if I could do billing on my own full time I would be able to make more money because right now I can do my billing duties in half the time (20 hrs/wk) maybe even less. (Although I also do bookkeeping and some managerial duties, which I will not include in my business). It will only be me billing at first, so I figured I can have at least 3 full service accounts and be able to handle that in a 40 hour week but make more money.

However, the amount I am coming up with when doing the Flat Rate calculations seems a lot less then what I make now and less then % billing. I am figuring this is because of the amount of hours I have to spend on his account would be much less.

Has this happened to anyone else? Is is feasible to make a substantial amount of money a month, between $6,000 to $10,000, charging flat fee, having 3 providers and working solo?
Title: Re: Flat Fee Pricing Question
Post by: Michele on July 19, 2017, 09:30:21 AM
Are you sure you are allowing for all of your time?  Are you allowing for working aging reports, handling denials, filing appeals, taking patient calls, communication back and forth to the provider's office, preparing reports for the provider, etc?  There is so much more to providing full service than billing the claims and entering the payments.   Also, when determining your hourly rate you need to consider that you are not simply paying yourself.  You have to allow more for business overhead, taxes, etc.  When a provider hires you for $15 an hour it is really costing him at least $30 an hour to have you in the office.  He has to pay payroll taxes, workers' comp & disability, office space, desk, computer, utilities, etc.  I think you are underestimating either your time or your rate.

Title: Re: Flat Fee Pricing Question
Post by: Tameka79 on July 19, 2017, 11:01:24 AM
Hi Michelle,

Thank you for your reply. I figured I am. Because it just didn't seem to add up.  I guess I am going to have to review your pricing book :-) Thank you again.
Title: Re: Flat Fee Pricing Question
Post by: PMRNC on July 20, 2017, 11:15:06 AM
You can still get paid based on an hourly rate, just do it as a flat fee amount on monthly basis. You can actually charge based on whatever hourly rate you want! If you feel you can get work done in half time, double the hourly rate. You don't even have to disclose that hourly rate. You just base it on estimated hours you will spend, add in your expenses and sliding scale to accommodate practice growth and that is your "flat fee". For example, if you are currently getting $15 an hour for an eight hour day, and you can do that work in four hours, go for $30 an hour X four weeks ($600 X 4 Weeks=$2400) Your sliding scale depends on how much you can get done in an hour so you want to see what time it takes you to generate claims for new patients. So for example, if you can add 5 new patients and generate claims in one hour your sliding scale would be an extra hour for every five new patients. You then add all of your expenses and Voila.. you are getting $30 an hour based on an eight hour work day! The great part, the client doesn't need to see $30 an hour which may intimidate them. Remember a business never needs to justify HOW they charge. Even at $30 an hour the provider saves money by outsourcing to you. 

Title: Re: Flat Fee Pricing Question
Post by: Michele on July 20, 2017, 01:57:40 PM
Linda is right.  I never disclose the hourly rate because they usually don't take into account the other expenses.  They think "$30 and hour!  That's crazy, I can pay $15" but in reality they are not paying $15.  It's costing them much more.
Title: Re: Flat Fee Pricing Question
Post by: voquendo6167 on July 25, 2017, 08:07:16 PM
I'm a little confused. I read the responses, but how do you hand a physician a contract without the expected fees?
Title: Re: Flat Fee Pricing Question
Post by: PMRNC on July 26, 2017, 06:14:12 AM

Quote
I'm a little confused. I read the responses, but how do you hand a physician a contract without the expected fees?

With a flat fee you are basing it on an hourly rate, you don't disclose the hourly rate you disclose the full flat fee in your contract. They don't have to know how you came to that amount.
Title: Re: Flat Fee Pricing Question
Post by: voquendo6167 on July 26, 2017, 10:25:17 AM
Ok, got it. Thanks