Pricing your billing service

[atwmedbilling]

Hello , My state doesn't allow for Fee Splitting . I was thinking of pricing flat rate monthly for the amount of claims that come in . Do you think this would be a good idea ? ( 0-1500 - $1000 monthly ,1500-2000- $1500 monthly) That is just a example . How do you price your billing service in the states that doesn't allow fee splitting ?

Thanks in advance 

[williamportor]

Hello , My state doesn't allow for Fee Splitting . I was thinking of pricing flat rate monthly for the amount of claims that come in . Do you think this would be a good idea ? ( 0-1500 - $1000 monthly ,1500-2000- $1500 monthly) That is just a example . How do you price your billing service in the states that doesn't allow fee splitting ?

Thanks in advance

Not a bad idea you have there. I prefer to bill my clients a flat rat, but based on a percentage of their average monthly volume. i.e. $10,000 average monthly billing volume x .07 = $700.00/mo. This can be adjusted when the contract is up for renewal.

[PMRNC]

Not a bad idea you have there. I prefer to bill my clients a flat rat, but based on a percentage of their average monthly volume. i.e. $10,000 average monthly billing volume x .07 = $700.00/mo. This can be adjusted when the contract is up for renewal.

This would not work in NY since the verbiage includes language to say the fee cannot even be BASED on %. I bill my flat fee based on an hourly rate + expenses. Easy and straight forward. I get paid for all work I do. There is a sliding scale to accommodate practice growth.

[Rclausing]

Not a bad idea you have there. I prefer to bill my clients a flat rat, but based on a percentage of their average monthly volume. i.e. $10,000 average monthly billing volume x .07 = $700.00/mo. This can be adjusted when the contract is up for renewal.

This would not work in NY since the verbiage includes language to say the fee cannot even be BASED on %. I bill my flat fee based on an hourly rate + expenses. Easy and straight forward. I get paid for all work I do. There is a sliding scale to accommodate practice growth.

Dang, that would be nice to be able to be on a time clock. On the down side, your clients pay extra for appealed and/or claims delayed for info requests etc. I understand the desire to eliminate the capacity for fraud when getting paid a % based on claims (billing agency upcodes, or bills for services not performed in order to increase their income), but it also eliminates some desire on the billing entity to be efficient. Quite a trade off. I really don't like the idea of getting a % based on what's billed as opposed to what is paid - lacks incentive to squeeze (collect) every dollar billed out for the client. In order to avoid even the slighted hint of any improprieties, I require my client to code their own superbills. It's just one doc and a PA, so not a big deal.

[PMRNC]

Dang, that would be nice to be able to be on a time clock. On the down side, your clients pay extra for appealed and/or claims delayed for info requests etc.

NOT necessarily. It depends on HOW your flat fee comes to play. MY flat fee is based on time/hourly rate, but my clients don't know the hourly rate. I'm in NY so physicians understand they can't pay me based on a % anyway.   So let's say my hourly rate is $60.  A practice that takes me 20 hours a week that's 1200.. add expenses and voila. Now let's say my hourly rate is about 10 patients.. so for every 10 new patients that's a sliding scale of $60. Easy..   Aren't most people paid on an hourly rate? Why do billing companies have to be different? I've NEVER been drilled on my flat fee.. if asked I simply state it's based on estimated time and expenses. Any other service business would do the same. 

I understand the desire to eliminate the capacity for fraud when getting paid a % based on claims (billing agency upcodes, or bills for services not performed in order to increase their income), but it also eliminates some desire on the billing entity to be efficient. Quite a trade off. I really don't like the idea of getting a % based on what's billed as opposed to what is paid - lacks incentive to squeeze (collect) every dollar billed out for the client. In order to avoid even the slighted hint of any improprieties, I require my client to code their own superbills. It's just one doc and a PA, so not a big deal.

I also don't code..but I'm also in a state that prohibits physicians from paying me on a % (Fee splitting).  I also believe the old "We don't get paid till you get paid" is so very tired.. and blase.. I understand some billing companies starting out really have no choice until they build a client base and determine their working time..but I just prefer to be paid for all the hard work I put in and I don't have any client that has questioned that.. I think if I did, I'd walk away.

[williamportor]

Not a bad idea you have there. I prefer to bill my clients a flat rat, but based on a percentage of their average monthly volume. i.e. $10,000 average monthly billing volume x .07 = $700.00/mo. This can be adjusted when the contract is up for renewal.

This would not work in NY since the verbiage includes language to say the fee cannot even be BASED on %. I bill my flat fee based on an hourly rate + expenses. Easy and straight forward. I get paid for all work I do. There is a sliding scale to accommodate practice growth.

Perhaps I didn't explain properly. I use their monthly billing volume as a guide, nothing more. The billing volume is not mentioned in the service agreement, only the flat monthly fee. I calculate the clients monthly fee based on the hours I think I'll spend actually working.  Sorry for the confusion.

[tallmanusa]

There are Public and private companies that sell medical billing services and charge a percentage fee. They also do business in New York.

This includes  Athena Health (Symbol ATHN), General Electric (GE), Cerner (CERN).
Also private companies, like Kareo, Nuesoft, Advanced MD.  There are thousands of other companies who do the same.

All of the above companies charge a percentage fee for medical billing services. A visit to their websites or call to their rep would confirm that.
These companies have CEO who are paid in the tens of  millions of dollars; and have full time General Counsels who are paid millions.  I am sure they have looked at the law very well.
All of this is public information.

Percentage billing is the norm in the industry.

[PMRNC]

There are Public and private companies that sell medical billing services and charge a percentage fee. They also do business in New York.

This includes  Athena Health (Symbol ATHN), General Electric (GE), Cerner (CERN).
Also private companies, like Kareo, Nuesoft, Advanced MD.  There are thousands of other companies who do the same.

All of the above companies charge a percentage fee for medical billing services. A visit to their websites or call to their rep would confirm that.
These companies have CEO who are paid in the tens of  millions of dollars; and have full time General Counsels who are paid millions.  I am sure they have looked at the law very well.
All of this is public information.

Percentage billing is the norm in the industry.

    And politicians are not supposed to lie..but hey it's the norm.     And for the MILLIONTH time..it is NOT illegal for the billing company to charge a %. THE LEGALITY and responsibility is on the physician in the state that prohibits fee-splitting. 

[tallmanusa]

Let me get this straight.
So there is one set of laws for those who make millions (or billions) in this business and another set for those who at the bottom of the totem pole filing claims  for a few bucks an hour. And they are advised that they should charge other than percentage so that they remain at the bottom and can never compete.

Obviously most companies and the millionaires are not concerned whether it is "illegal" for the physicians to pay by percentage, but the lowly person at the bottom must be concerned, should be worried sick.
What an advice!
I am sure when the millionaires in this business go to their palaces, their hearts must start to bleed, as they have jeopardized the physicians by " fee splitting ".

Ours is a society in which rich get richer and poor become poorer; lack of proper information is but one of he causes that makes the poor poorer.

[PMRNC]

Captain: "What we have here is a failure to communicate" 

So there is one set of laws for those who make millions (or billions) in this business and another set for those who at the bottom of the totem pole filing claims  for a few bucks an hour. And they are advised that they should charge other than percentage so that they remain at the bottom and can never compete.

What? Who said anything about their being two sets of laws? This is ONE side the law tilts against.. physicians.. NOT the billing company, read the umpteenth posts about this and read the verbiage of the state law(s) and you will find this is about physicians. Companies that make millions ..well every American has that opportunity, the liberal mind of thinking is to penalize the CEO's making millions.. that's their right to do so, not our right to say no. Every doctor that signs on with a billing company IN The state where fee-splitting is illegal will be the one breaking law. The physician can (and case precedence are there to show it has been exercised) be sanctioned and even lose their license.   Do all billing companies care? NO.. should they care.. YES because of people who can't seem to wrap their head around a law just because "It's not right" or "everyone else is doing it".   If you would like some referrals to attorney's who have defended physicians on this, let me know. 

I will say this one more time and hopefully it will sink in:   THE LAW makes it illegal for the PHYSICIAN to enter into any fee-splitting arrangement.. The billing company does not break the law if they sign a physician willing to take that risk.  YES billing companies will take advantage of knowing this and allowing a physician to take that risk.. shame on them. Shame on the doctor also for not consulting with legal counsel before signing a contract. This is where I love the law for the small billing company, a chance to swoop in and care.  To the rest, everyone else is doing it.. so go on ahead.

Ours is a society in which rich get richer and poor become poorer; lack of proper information is but one of he causes that makes the poor poorer.

Spoken like a liberal ...    Not lack of information.. lack of understanding and then ignoring information is more like it. The poor will stay poor, the rich will get richer in a free society of free trade and land of opportunity. Bless AMERICA!

[Rclausing]

Hopefully we can start airing our differences with a bit fewer pejorative statements...

First, these are state laws, all of which differ in many ways except one: They were written to help eliminate the occurrences where physicians were referring services to facilities which they either had an ownership interest in, or were paid by the facilities for referring patients. Many times, especially in cases where a state attorney is trying to decide whether or not a law has been violated, the intent of the law is closely examined. In this case, no state that I am aware of had any intent whatsoever to limit physician/billing entity relationships with a fee splitting legislation. However, the point here is that THEY CAN BE INTERPRETED in that way, and many may choose the safer path of not seeking percentage contracts.

The fact is, a percentage contract between biller and physician does not provide the same self referring benefits that lab and diagnostic testing self referrals do. Sure, a practitioner could upcode, or bill for services not provided, but the billing service relationship does not provide any extra ability to do so. In fact, most relationships between providers and billing services retard such occurrences. Again, the intent of the law will likely play a key role in the decision making of any prosecuting party.

I for one refuse to chastise anyone for trying to be on the safe side of any law.

One last thought.  I spent a good number of hours over the last few days of last week pouring over court records to find any cases (in the state that I am providing billing services for) of fee splitting that involved a billing service. I could not find a single one. Not to say I couldn't have missed any, but it seems somewhat unlikely.

[PMRNC]

In this case, no state that I am aware of had any intent whatsoever to limit physician/billing entity relationships with a fee splitting legislation. However, the point here is that THEY CAN BE INTERPRETED in that way, and many may choose the safer path of not seeking percentage contracts.

Not true at all. Let's look at the language of NY 

 Section 6530.19 - 19. Permitting any person to share in the fees for professional services, other than: a partner, employee, associate in a professional firm or corporation, professional subcontractor or consultant authorized to practice medicine, or a legally authorized trainee practicing under the supervision of a licensee. This prohibition shall include any arrangement or agreement whereby the amount received in payment for furnishing space, facilities, equipment or personnel services used by a licensee constitutes a percentage of, or is otherwise dependent upon,
the income or receipts of the licensee from such practice, except as otherwise provided by law with respect to a facility licensed pursuant to article twenty-eight of the public health law or article thirteen of the mental hygiene law;

Referral of patients has nothing to do with many of these laws anymore, there is just as much incentive for fraud with a billing company to share in revenue based on billed fees than there is referral/kickbacks.

One last thought.  I spent a good number of hours over the last few days of last week pouring over court records to find any cases (in the state that I am providing billing services for) of fee splitting that involved a billing service. I could not find a single one. Not to say I couldn't have missed any, but it seems somewhat unlikely.

There are case precedence's and I've found a few for Florida,NY, Illinois (prior to them revising their law), and North Carolina.   One of the biggest law firms in the country has a lot of great information and can weigh in on other cases (Liles & Parker).  It's important to note that WHERE these fee-splitting laws are found VARY from state to state. For example NY is under Public health law or article thirteen of the mental hygiene law. Arizona is professional conduct, and public health and safety, some states list it under education, etc.   Some of the state laws are completely CLEAR and others are vague. Tennessee is another one that is pretty CLEAR, Florida has the most case precedence's, with NY following.  In fact many of the cases have actual set precedences making this not just about referrals, but about "incentives" between non licensed medical personnel. I've been doing the research on this for about 15 years starting with the OIG's reccomendation back in 1997.  It's also important to know that in cases presented in Illinois, NY and Florida, there were instances where billing companies contracts were null/void due to not being legal (physician).  So while many who have billing companies in those states will not violate the law, if they EVER need to go to court, their contracts will be challenged.

[Michele]

I can see this is a heated topic.  I just wanted to chime in with one small comment.

There are Public and private companies that sell medical billing services and charge a percentage fee. They also do business in New York.

We actually recently signed a Neurologist from NYC who specifically hired us because we were the first billing service to NOT charge her a %.  She had been advised by her medical society that it was fee splitting and she refused to sign with any billing service charging a %.  This is not the norm, but it is accurate.  I do believe that more and more providers will become aware of this in the future.

Percentage billing is the norm in the industry.

I actually agree with you on this statement, it is the norm.

[PMRNC]

I actually agree with you on this statement, it is the norm.

I too agree it probably is the norm too, but I think with more and more states adding these fee-splitting restrictions, it won't be the norm in the near future. Again, the OIG and HCCS, along with many other large medical associations frown upon it as an added incentive for fraud.

MY side note.. why on earth wouldn't you want to get paid for ALL of the work you do?

[Rclausing]

In this case, no state that I am aware of had any intent whatsoever to limit physician/billing entity relationships with a fee splitting legislation. However, the point here is that THEY CAN BE INTERPRETED in that way, and many may choose the safer path of not seeking percentage contracts.

Not true at all. Let's look at the language of NY 

 Section 6530.19 - 19. Permitting any person to share in the fees for professional services, other than: a partner, employee, associate in a professional firm or corporation, professional subcontractor or consultant authorized to practice medicine, or a legally authorized trainee practicing under the supervision of a licensee. This prohibition shall include any arrangement or agreement whereby the amount received in payment for furnishing space, facilities, equipment or personnel services used by a licensee constitutes a percentage of, or is otherwise dependent upon,
the income or receipts of the licensee from such practice, except as otherwise provided by law with respect to a facility licensed pursuant to article twenty-eight of the public health law or article thirteen of the mental hygiene law;

And herein lies the issue. It's ALL about interpretation. As the above states, an "employee" or "associate in a professional firm or corporation" are exempt. So what constitutes either of those exemptions? I just filed articles of incorporation (LLC) so that (in my opinion only) should fit the definition. Also, even though I am on a % I am on the payroll. Again, the very definition of employee.

The bottom line is that the outcome of any court incident will depend greatly on the attorneys arguing the case. We, as practice management consultants should be far less worried about what kind of contract WE need, and focus more on physician education and let THEM make the decision as to what kind of contract they want. Many physicians - especially the older school ones - may prefer the % contract and the incentives it provides for quality work on our part.

Our job is to help a practice run smooth, and turn physician services into cash. If we focus on that, the rest usually takes care of itself.

JMO.