Author Topic: Percent Billing and OIG  (Read 3768 times)

PMRNC

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Re: Percent Billing and OIG
« Reply #15 on: March 06, 2013, 05:04:33 PM »
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].


I did do the above calculations.. Yes I could arrive at a % but no where near what I would charge if charging a percentage. And again the above calculation and the arrived at % MIGHT be somewhere in the ballpark (not for the example I used) but it's STILL not taking into account the AMOUNT of work done on the account.   My monthly fee is constructed using an hourly rate between $25-$40 per hour (BILLING) If I billed on a % basis I would need to bill somewhere in the ballpark of 18% to be compensated for my time which then makes the % based model MOOT!



Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

RichardP

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Re: Percent Billing and OIG
« Reply #16 on: March 06, 2013, 10:43:31 PM »
I did do the above calculations..   If I billed on a % basis I would need to bill somewhere in the ballpark of 18% to be compensated for my time ...

Thank you for that.  And the reverse of your statement is this:  so long as my client has a relatively stable practice at its current level, he is in essence paying me approximately 18% for my billing services.  It's only math, not politics.  The amount is the same, regardless of whether you call it a flat fee or percentage billing.  You still earn roughly the same amount of money.  And I'm sure that if the billing work-load increased dramatically (which would imply the doctor is bringing in more money), you would raise your fee.  New fee divided by new doctor's income would probably end up roughly at 18% again (speculation on my part, I know).  You haven't moved away from percentage billing at all.  Calling your fee for billing services by a name that is politically-correct doesn't change the math.  That fact is probably why so few states have gotten excited about banning fee splitting or percentage billing.  I like the language the State of California uses on this issue:  (from here:  http://www.medicalbillinglive.com/members/index.php?topic=7131.msg21583#msg21583 )

(b) The payment or receipt of consideration - for services other than the referral of patients - which is based on a percentage of gross revenue or similar type of contractual arrangement shall not be unlawful if the consideration is commensurate with the value of the services furnished or with the fair rental value of any premises or equipment leased or provided by the recipient to the payer.

Again, I am not pushing percentage billing over flat-fee billing.  And I'm not criticizing you for how you bill.  I'm just making the point that you are not as far removed from percentage billing as you keep insisting that you are.

PMRNC

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Re: Percent Billing and OIG
« Reply #17 on: March 07, 2013, 12:15:01 AM »
Quote
You haven't moved away from percentage billing at all.  Calling your fee for billing services by a name that is politically-correct doesn't change the math.  That fact is probably why so few states have gotten excited about banning fee splitting or percentage billing.
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Well the fact that I don't agree with you at all is one thing.. MY attorney not agreeing is all that matters to me because IN NY state our fees cannot be even constructed from revenue.  I took 2 more clients to try the same formula, and nope.. sorry no where near close.
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com