Author Topic: Percent Billing and OIG  (Read 4078 times)

odastone

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Percent Billing and OIG
« on: February 23, 2013, 01:42:57 PM »
I know this may have been answered before, however to save myself some grief and time, I'm asking again.

My business is in the early stages of adding on clients, it was brought to my attention that the OIG strictly prohibits fee spliting and that percentage billing would be classified as fee spliting. I cannot find any concrete answer to this statement that says no you cannot percentage bill on the OIG website.  If anyone has a specific link to where I may go and find this information that lists the states that will not allow percentage billing , please post so that we all can have a better grasp on this serious side of our business.

Thanks :-\

RichardP

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Re: Percent Billing and OIG
« Reply #1 on: February 23, 2013, 02:00:25 PM »
Go here and type in fee splitting in the upper right-hand corner (search box), then read:

http://www.medicalbillinglive.com/members/index.php

The OIG does not currently prohibit fee splitting as it pertains to billers charging a percentage of monies collected for the doctor.  Some states do prohibit this, tho - the details of which you should find in your search of this site.  New York and I think Florida prohibit doctors from fee-splitting arrangements.  And the fee splitting prohibition is for doctors, not billers.  Linda can give more specifics.

California does not prohibit fee splitting.  See this thread for how the California Business Code reads in this regard:

http://www.medicalbillinglive.com/members/index.php?topic=7131.msg21583#msg21583

« Last Edit: February 23, 2013, 02:03:27 PM by RichardP »

odastone

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Re: Percent Billing and OIG
« Reply #2 on: February 23, 2013, 02:56:29 PM »
Richard, thanks for your info. I'm not seeing what you are saying as to info in the site. If you have a specific in mind please post a link. Sorry to be difficult, just getting a little aggravated trying to find an answer.

PMRNC

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Re: Percent Billing and OIG
« Reply #3 on: February 23, 2013, 03:01:26 PM »

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Richard, thanks for your info. I'm not seeing what you are saying as to info in the site. If you have a specific in mind please post a link. Sorry to be difficult, just getting a little aggravated trying to find an answer.

What state are you in?

Also.. can you tell me why you want to charge a %? 
Linda Walker
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RichardP

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Re: Percent Billing and OIG
« Reply #4 on: February 24, 2013, 03:00:58 AM »
Sorry to be difficult, just getting a little aggravated trying to find an answer.

I gave you the answer in my post above.

I cannot find any concrete answer (on the OIG website) to this statement that says no you cannot percentage bill ...

That is because no such language exists.  The only way we know that the OIG does not prohibit doctors from paying billers a percentage of what they collect is the fact that there is no language published by the OIG that says they prohibit such an arrangement.  On the other hand, some states DO prohibit such arrangements:  New York at least, maybe Florida, and maybe one or two others.

If you need an answer fast re. a specific state, contact a health-care attorney for the state you have questions about.

http://lawyers.findlaw.com/lawyer/practice/health-health-care-law

You would do well to search as I suggested in my post above, and read the posts that come up.  This subject has been discussed a bit on this site.

Cmporter82

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Re: Percent Billing and OIG
« Reply #5 on: March 04, 2013, 02:43:27 PM »

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Richard, thanks for your info. I'm not seeing what you are saying as to info in the site. If you have a specific in mind please post a link. Sorry to be difficult, just getting a little aggravated trying to find an answer.

What state are you in?

Also.. can you tell me why you want to charge a %?

I realize this was directed at someone else, but I just wanted to say that every biller I have contacted to get pricing info here, bills by %.  That's all providers around me know and are generally unwilling to do anything but! It's aggravating.

RichardP

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Re: Percent Billing and OIG
« Reply #6 on: March 04, 2013, 04:11:08 PM »
Unless your client's income varies widely from month to month, your fee for services will end up in the ballpark of being a percentage of the monies you collect for him anyway.  So, charging a percentage up front can sometimes be the simplest solution.  We charge a percent for our collection efforts.  Anything else not directly connected to collection efforts carries a separate fee - such as data mining, credentialing, etc.

For newbies who might be passing by:

http://medicalassociationofbillers.yuku.com/reply/722/Percentage-Billing-or-Per-Claim#reply-722

http://medicalassociationofbillers.yuku.com/topic/8974/Training-Primer-What-do-I-charge#.UTUadfKtZDE

PMRNC

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Re: Percent Billing and OIG
« Reply #7 on: March 04, 2013, 04:50:33 PM »
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I realize this was directed at someone else, but I just wanted to say that every biller I have contacted to get pricing info here, bills by %.  That's all providers around me know and are generally unwilling to do anything but! It's aggravating.

There are a lot of things a lot of different billing companies do, doesn't mean it's right. It's not aggravating at all because once you figure out pricing your getting reimbursed for ALL of your time, your provider is getting fair reimbursement in exchange for "SERVICES" rendered. Do they pay other bills on a % basis? In states that prohibit a physician from entering into a %, your actually looking out for the best interest of the provider as well as your own interests.

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Unless your client's income varies widely from month to month, your fee for services will end up in the ballpark of being a percentage of the monies you collect for him anyway.  So, charging a percentage up front can sometimes be the simplest solution.  We charge a percent for our collection efforts.  Anything else not directly connected to collection efforts carries a separate fee - such as data mining, credentialing, etc.

Richard are you agreeing that if "everyone" is doing it its ok?  In the states that do prohibit it, the verbiage doesn't include JUST % billing.. ANY arrangement that constitutes as a profit of percentage. And I don't agree it comes out to the same.. NOT at all.   When I billed a % I worked my butt off for 6-7% and sometimes it was barely enough to sustain costs.. Go higher and the doctors don't want to pay it.  I'm in NY and since I moved here 8 years ago I've not run into ONE provider who has argued this point, I simply show them the statue and not ONE has tried to interpret it because it's absolutely CUT/Dry.   I understand that the OIG only has recommendations.. but there are in fact States that prohibit it.. period and that supersedes the OIG "proposed regs"  PERSONALLY I don't know why we would want to do the opposite of what the OIG recommends anyway.. but that's just me.   

On a side note, a billing company just sent me a copy of a letter they got from the underwriting dept of their E/O insurance in NY.. attached was a questionnaire about their services. on there was the question about contracted rates and they wanted a copy of contract. When I looked into mine I noticed when I attached mine for NY it did not include % so I didn't get the questionnaire, upon asking my own agent he told me that they were FULLY aware of the NY regs and fee-splitting arrangements with physicians and that contracts IN state of NY that violated that would not be provided coverages.. Stands to reason because the contract wouldn't hold up in a the NY courts.   Makes me wonder how many billing companies are not even getting proper insurance. If they were surely they would all be aware of this. 

Tiring discussion.. whoever wants to bill % .. go for it. I'll continue it as a marketing point to steal clients from the ones that want to disregard the law.
Linda Walker
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RichardP

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Re: Percent Billing and OIG
« Reply #8 on: March 04, 2013, 08:07:40 PM »
Linda asked:  Richard are you agreeing that if "everyone" is doing it its ok?

No.  I was not offering an opinion on OK or not OK  I was responding to Cmporter82's "complaint" and giving a possible reason why s/he is finding so many people charging a percent.

... I just wanted to say that every biller I have contacted to get pricing info here, bills by %.  That's all providers around me know and are generally unwilling to do anything but! It's aggravating.

Linda stated:  And I don't agree it comes out to the same.  I agree with you.  That is why I did not say that it comes out the same.  I said two separate things, neither of which was that.  The second thing I said was that charging a percent can sometimes be the simplest solution.  Note that I didn't claim that it was a simple solution (big difference between "simple" and "the simplest").  The second link I provided in my last post shows that determining pricing solutions for one's billing business is not a simple process in many cases.

The first thing I said was that, unless a client's income varies significantly, a consistant flat fee will end up being some percentage of the income that the biller brings in for the client.  This is a math statement, not a political one.  If your clients have a relatively stable practice, you could add up the income you collected for them over the past 36 months and add up the fee you charged for collecting that income over the past 36 months.  Divide the total fee income by the total monies collected and you will get a percentage.  If your client's practice stays relatively stable for the next 36 months, you would "earn" roughly the same amount of money if you charged him that percent rather than your fee.  This is a math issue, not a political one.

When I billed a % I worked my butt off for 6-7% and sometimes it was barely enough to sustain costs.. Go higher and the doctors don't want to pay it.

Translation: your flat fee costs the doctor more than a standard 6% - 7% percentage fee would cost him.  In a state where fee-splitting is not illegal, you might be under-bid by someone else offering to do the billing for a percentage fee.  From the time I started reading your comments about fee-splitting, it occurred to me that this is the bind you (and others) are in.  If you charge a percentage fee high enough to cover your costs and give you a profit, the doctor won't hire you.  That is the real reason you prefer a flat fee over a percentage one (ignoring the anti-fee-splitting laws of New York for the moment).  It covers your costs and gives you a profit (I assume), but it costs the doctor more than he would be willing to pay if you offered him a percentage fee.  It's OK to admit to that.  There is no point in working if you can't make a profit.
 

PMRNC

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Re: Percent Billing and OIG
« Reply #9 on: March 05, 2013, 09:23:44 AM »
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The first thing I said was that, unless a client's income varies significantly, a consistant flat fee will end up being some percentage of the income that the biller brings in for the client.  This is a math statement, not a political one. 

I suppose when you take two numbers you could indeed make them come out with the same mathematical formula to arrive at the same number, that is correct. So when I made $1300 BEFORE expenses doing a % and then after converting to flat fee $2100 as example for one small solo provider I've kept through my transition to flat fee, that would come to 8% ...   finding the % for the $2100 would be about 13.5% (not taking into account expenses, sliding scale for new patients/practice growth)  So sure.. I found a calculation to come to a %.   But still the flat fees I charge are not "constructed" from revenue percentage at all. 

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If your client's practice stays relatively stable for the next 36 months, you would "earn" roughly the same amount of money if you charged him that percent rather than your fee.  This is a math issue, not a political one.

No, I wouldn't earn roughly the same. Your not accounting for client expenses, OR perceived value of work (AMOUNT of work done) that % is before you pay expenses and with NO baring of work involved! The  flat fee I collect already has expenses deducted and the sliding scale applied for provider growth (New patients)  So how can you say you "earn" the same? Not by a long shot.   It took me a long time to really learn about perceived value in business and if you present it the proper way from the get go you will NOT have a problem. % may be the "simplest" way, but it's NOT representative of value, and hard work. It's a number a biller would come up with that is going to sound good to the provider. You know this, I know that, why side step it? Billing companies charge a % only because they know the doctor loves the idea that "You don't get paid until they get paid" that is the only advantage aside from it sometimes being the "simplest" of ways.    With flat fee, there are no surprises, I get paid what I AM WORTH and for all time I put in.  No more spending HOURS on one appeal only to get paid a small percentage of what I collect on that appeal maybe a month or two later. 

Another thing to consider is that at the various seminars put on by the carriers and Medicare and even the AMA, they are advising physicians to be extra cautious with PM companies and the method of charging a %. The OIG frowns on it, it's an open door to the end of it, and it is indeed an incentive to commit fraud. In my opinion only in states OTHER than where it's permitted, I do wonder why billing companies are undercutting their services when it really is simple to come up with a better formula to where everyone is satisfied and they are earning by the amount of work they do as well as the quality and efficiency of that work.   In states where it's prohibited.. It's blatant disregard for the law and the providers you are signing.

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Translation: your flat fee costs the doctor more than a standard 6% - 7% percentage fee would cost him.  In a state where fee-splitting is not illegal, you might be under-bid by someone else offering to do the billing for a percentage fee.  From the time I started reading your comments about fee-splitting, it occurred to me that this is the bind you (and others) are in.  If you charge a percentage fee high enough to cover your costs and give you a profit, the doctor won't hire you.  That is the real reason you prefer a flat fee over a percentage one (ignoring the anti-fee-splitting laws of New York for the moment).  It covers your costs and gives you a profit (I assume), but it costs the doctor more than he would be willing to pay if you offered him a percentage fee.  It's OK to admit to that.  There is no point in working if you can't make a profit.

Yes, but again we are talking "PERCEIVED VALUE" A doctor is going to jump to the percentage as what he perceives to be cheaper. If you don't QUOTE a percent of revenue and you calculate a monthly flat fee/sliding scale, they don't HAVE a % in their head.  I don't justify or explain my method of billing beyond telling them that in the state of NY THEY are prohibited from entering into a fee-splitting arrangement. USUALLY that does it, but when I was in PA doing it, I merely just said, with this method of charging I am compensated for my time as well as costs and the number will ALWAYS be significantly cheaper than going in house. Again, though I've never gotten into any argument and have never been challenged further on it. Our perception that doctors are "greedy" or "inconsiderate" or "cheap" is wrong.  We are the ones that got hung up on the old and tired marketing ploy of "we don't get paid until you get paid". Not them.
Linda Walker
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www.billerswebsite.com

RichardP

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Re: Percent Billing and OIG
« Reply #10 on: March 05, 2013, 08:06:22 PM »
Linda - First, I am not pushing percentage billing over flat fee.  I was making a math point.

Second, you have stated elsewhere that you charge a flat fee for bringing in the client's monies (billing), using a sliding scale sometimes, based on volume of work;  you charge other fees for other work that is not directly a part of collecting what is owed to your client (consulting).  The "math" I talked about in my previous post applied only to the billing part of your fees.  I understand that, in addition to the billing monies, you earn other monies for consulting, etc.  We charge a percentage only on billing activity.  We charge extra fees (flat rate) for consulting stuff that is not directly related to billing.

PMRNC

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Re: Percent Billing and OIG
« Reply #11 on: March 05, 2013, 10:49:25 PM »
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Second, you have stated elsewhere that you charge a flat fee for bringing in the client's monies (billing), using a sliding scale sometimes, based on volume of work;  you charge other fees for other work that is not directly a part of collecting what is owed to your client (consulting).  The "math" I talked about in my previous post applied only to the billing part of your fees.  I understand that, in addition to the billing monies, you earn other monies for consulting, etc.  We charge a percentage only on billing activity.  We charge extra fees (flat rate) for consulting stuff that is not directly related to billing.

NO Richard, I have NEVER stated I charge a flat fee for bringin in the clients monies.  I charge a flat fee based on MY hourly rate, expenses and sliding fee to accommodate provider growth. NOTHING to do with revenue.   Revenue is not taken into account at all.   I did not state "volume" of work. I stated the WORK I do, my expenses/client expenses.

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you charge other fees for other work that is not directly a part of collecting what is owed to your client (consulting).
  Different fee all together, different contract as well.   For clients I bill and consult for we have two different contracts and two methods of payment all together.

Unlike those companies that charge a % of revenue, I get paid for every minute, every hour and every task I work. My contracts for billing and consulting are separate as they should be.
« Last Edit: March 05, 2013, 10:58:01 PM by PMRNC »
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RichardP

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Re: Percent Billing and OIG
« Reply #12 on: March 06, 2013, 10:42:56 AM »
Linda said:  My contracts for billing and consulting are separate as they should be.

That was the distinction I was making.  If I was not clear on that, then my bad.  The math I discussed above would have been relevant only to your billing contract, as it is for ours.  The consulting contract is a totally separate issue and has nothing to do with percentages.

PMRNC

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Re: Percent Billing and OIG
« Reply #13 on: March 06, 2013, 11:35:50 AM »
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That was the distinction I was making.  If I was not clear on that, then my bad.  The math I discussed above would have been relevant only to your billing contract, as it is for ours.  The consulting contract is a totally separate issue and has nothing to do with percentages.

I understand that, but my billing services are NOT constructed using revenue or percent of revenue and ONLY based on time, expenses/costs. There is NO connection to a percentage of revenue in any way.
Linda Walker
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RichardP

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Re: Percent Billing and OIG
« Reply #14 on: March 06, 2013, 12:00:45 PM »
There is NO connection to a percentage of revenue in any way.

Seriously??  At this point, this is just for fun - so please don't think I'm picking on you.  You will find that there is indeed a connection to a percentage of revenue if you carry out the experiment I suggested in this quote from above.  But I think you know this already.

... unless a client's income varies significantly, a consistant flat fee will end up being some percentage of the income that the biller brings in for the client.  This is a math statement, not a political one.  If your clients have a relatively stable practice, you could add up the income you collected for them over the past 36 months and add up the fee you charged for collecting that income over the past 36 months [don't include consulting income here].  Divide the total fee income [for billing only] by the total monies collected [for the doctor, from billing only] and you will get a percentage.  If your client's practice stays relatively stable for the next 36 months, you would "earn" roughly the same amount of money if you charged him that percent rather than your fee [for billing only].  This is a math issue, not a political one.