Author Topic: Coming up with a Flat Fee From Scratch  (Read 1536 times)


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Coming up with a Flat Fee From Scratch
« on: February 14, 2011, 09:38:08 PM »
Hello Ladies - Happy Valentine's Day!

I have a questions, I had a potenial client call today and I don't know how to come up with a flat fee for him.  It is a brand new practice so it has no receivables and it is going to start small - any ideas on how to set pricing and how to write up his contract so that it can be changes with the growing business?  Thanks so much for all you help.


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Re: Coming up with a Flat Fee From Scratch
« Reply #1 on: February 14, 2011, 09:57:41 PM »
KLA.....if you PM me or Pay_My_Claims, we can direct you on information for this...
Michelle Rimmer, CHI, CPMB
President-Professional Medical Billers Association
Owner-ABA Therapy Billing Services
Author, 'Medical Billing 101' and 'Coding Basics: Understanding Medical Collections


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Re: Coming up with a Flat Fee From Scratch
« Reply #2 on: February 15, 2011, 06:42:00 AM »
KLA, you can also just use the formula I posted in another thread. Depending on how long you have been in business and your experience, use the flat fee based on an hourly rate you believe would be fair for both of you. Since it's a new practice you want to make sure you make the flat fee a sliding one to accommodate the practice's growth.So if you come up with $20 p/hour estimate how many patients/claims you can enter in an hour, make sure to come JUST under with the volume to account for any problems.. for example if you know you can do 10 patient's/claims in an hour, use 7-8 with your sliding scale.

I'll give you another example based on the $20 per hour rate.  You are going to estimate all the "costs" associated with this client. Ink, postage, claim forms, clearinghouse, software client monthly fees if any, For the sake of the example, let's say we come up with $300 in costs per month for this client, and let's say there is a one time fee of $500 to setup the client in your PM software.  Now estimate how long you believe you will work on this client per month. Just because it's a new client does not mean you will be basing this on all claims filing only. Let's say they require your help for other things in setup, you will estimate based on what YOU need to work for that client per month. For the example we will use 60 hours per month. I know it's a little hard to estimate time w/out knowing specifics.but you can make it easier by finding out (if you didn't already) will they be bringing patient's over from previous practice, will there be hospital visits? What services will they require and what services will you provide.

Taking those numbers above:   60 hours @ $20 p/hour = $1200  + $300 monthly expenses = $1500 per month.  7-8 additional patient's added = +$20

Again, this is JUST an example.  You can then take that $500 one time cost for your software and add it in with a setup fee which you could say would be equal to the first month's fee and then offer to discount that if they sign your contract by a certain date. This way you have some wiggle room and the client will be getting a break.

If you have additional information such as specialty, number of providers, types of services, etc.. I can come up with a more "specific" formula. Also if you let me know what YOU want to make in addition to what your years/experience dictates in your geographical area that will help too. You can email me if you want, or we can do it here. :)

It seems a bit difficult in the beginning, especially when it's a brand new practice, but it's not really, there is going to be some estimating but your contract will cover you for adjustments to this.  ;D
« Last Edit: February 15, 2011, 06:44:44 AM by PMRNC »
Linda Walker
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Re: Coming up with a Flat Fee From Scratch
« Reply #3 on: February 18, 2011, 01:21:59 PM »
Thanks everyone for all your help!