Author Topic: What to charge  (Read 2412 times)

PENNY10

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What to charge
« on: February 23, 2011, 12:44:51 PM »
I have been doing billing for almost 20 years and I have always charged a percentage of amount collected. Recently though I have decided this may not be the best option for many reasons. However, I have no idea what to charge as far as flat rate. Most of my clients are small mental health providers. If anyone can give me some guidelines or point me in the right direction for a formula I would really appreciate it. For those of you who bill per claim. What constitutes a claim? One date of service?

PMRNC

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Re: What to charge
« Reply #1 on: February 23, 2011, 01:17:49 PM »
There have recently been a few threads on this.  How I do it is based on hourly rate, what I want to make per hour. My formula goes like this:

For this example I will use an hourly rate of $25 p/hour.

I determine the amount of time I will need per week per client (estimated). This is easy if you have been billing for the provider and it's always a good idea to calculate how much time you spend on each client no matter how you are charging. For this example we will say this provider will take or takes 12 hours per week.

I then add up my expenses PER client (this should NOT include any fees for the cost of doing business such as computer, attorney, books, education, etc) only costs such as clearinghouse, postage, phone, claim forms, software per client fees, envelopes, ink, paper, etc.. should be included in these costs.  For the sake of this example we will use an estimated cost of $500

I then take my hourly rate of $25 and multiply it by 12 hours per week=$300 per week X 4 weeks= $1200 per month
I then add my estimated costs for each month $1200 + $500 = $1700 monthly flat fee total.

To create the sliding scale I then break down (again estimating) how many patients/claims I can comfortably do per hour. For this example I will use 8 patients. That will equal $25 (hourly) per every 9 patients added.  That will allow you to continually get paid for your time and allow for growth of the practice. Remember to increase you "costs" and I do this once every 6 months as per my contract.

Nice and simple, and biggest factor is I get paid for all my work. :)
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

csbilling

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Re: What to charge
« Reply #2 on: February 23, 2011, 06:29:02 PM »
I to, am trying to figure out the whole flat fee billing. I get the formula, but got confused on the sliding scale factor. How do you calculate that into your monthly fee? Or do you only use it when you go over the 12 hours estimated of $1700.00. Can you please explain?

PMRNC

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Re: What to charge
« Reply #3 on: February 23, 2011, 07:25:25 PM »
Quote
I to, am trying to figure out the whole flat fee billing. I get the formula, but got confused on the sliding scale factor. How do you calculate that into your monthly fee? Or do you only use it when you go over the 12 hours estimated of $1700.00. Can you please explain?

I only charge them when the full set of 8 patients. So let's say month #1 they only gain 2 patients. I don't charge anything more, let's say month #2 they gain the additional 7, so then I charge the additional fee (based on my hourly) so it's basically accumulative and when I'm ready to add the additional hourly fee the money catches up :)
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

PENNY10

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Re: What to charge
« Reply #4 on: February 24, 2011, 10:17:27 AM »
Thanks for the replies. I think I have read all the threads on this. Wondering if anyone knows where you can find the laws that pertain to your state as fas as a provider paying a precentage? I'm in Colorado. I can see that billing based on hourly would certainly bring me more money but I know my clients will balk at this

PMRNC

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Re: What to charge
« Reply #5 on: February 24, 2011, 04:19:14 PM »
Well remember in the states it is illegal to bill % it is illegal for the "provider" to enter into the fee-splitting arrangement..NOT the billing company, however why would any biller want to put a provider in that situation anyway.  To research your state, go to Google and type in your state and look for search terms such as illegal fee splitting in _____ for providers or healthcare practices.

Now.. though I gave you my formula, my hourly rate STAYS with me. My providers do not need to know I have came to that formula with an hourly rate. If asked I simply tell them it's based on time, costs, etc. I've never been pressed. Remember that in business such as ours, you don't have to fully explain your fees, they are what they are. My contract will simply state the services I am providing and the flat fee amount and an explanation of the sliding scale.
If a provider balks.. simply tell them that you expect to be paid for your time like any other business.
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

PENNY10

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Re: What to charge
« Reply #6 on: February 25, 2011, 10:49:33 AM »
Thanks so much for the help  :)