Analyze this

[williamportor]

Just looking for opinions here, but what can a freelance biller working full time for smaller clients i.e. Chiropractors, LMT, ND's's etc. expect to make / month? The reason I'm asking is I'm doing:

* 350-400 claims per month split up among 7 clients
* Phone follow up and resubmission of 10-15% of claims that didn't pay (for various reasons)
* Mail invoicing of 60 invoices + phone follow up/ mo. for a ND
* Setting up 2 clients for me to submit claims through office ally + receive electronic remittances
* Phone follow up of a small mountain of old unpaid EOB's for a newer client left over from former office staff that didn't know how to bill correctly


All of this adds up to 40+ hours a week for $1350.00 / mo

 4 of these clients were added in the last 6 months. Between all this and a few other mini disasters I'm doing a lot of "side work" unrelated to actual claims submission which amounts to a lot of work hours for little pay. I'm sure as I get a few of these billing messes cleaned up, and the setup work for office ally and Medicare is complete this will be less labor intensive, but right now I could make a lot more $$ per hour selling nails at Home Depot. The good news is since I stopped trying to bill for MD's my client base has stabilized and I'm not losing clients. The bad news is I'm working long hours for not much income. So....Am I undercharging my clients? Is this normal for a biller with 4 recently added clients in the last 6 months? any input would be appreciated.      

[Michele]

This doesn't seem right.  At 400 claims per month for 7 clients that is only an average of < 60 claims per provider per month.  That should not be taking 40 hours per week.  We don't measure by number of claims but by income.  One full time person should be able to produce $6000 - $9,000 depending on the type of providers and the set up of the biller (ability to autopost, etc). 

I would take a look at your systems to see if there is any place you can find a way to improve the amount of time it is taking.  I would also take a look at what you are charging them.  Maybe that is where the issue is.  But in answer to your question, $1350 per month is not normal for 40+ hours per week.

[williamportor]

$6000 - $9000 / month you say?? Wow, looks like I'm inefficient and undercharging. OK, I'm almost certain I'm undercharging, but 6 out of 7 of these clients fax in the billing info, since they have no billing software, and about 25% are new clients, so lot's of data entry. I try to charge a flat monthly fee, but it averages about $3.00 / claim. I guess this is a good place to start. Once I have the old claims caught up, and can see the light of day, I'll look to bumping up the fees.

* Should I charge extra for a client that sends me 200-300 old unpaid EOB's to call on and/or resubmit? If so, how much?

* What would you folks charge for direct mail billing of cash customers? I'm charging $11.75 for 3 months (3 invoices)



 

[PMRNC]

I have a different opinion, since I do charge a monthly fee it is based on how much I work. I couldn't measure how much I make by a provider's revenue as I'm in a state that prohibits fee-splitting so my fees cannot be even remotely related to the revenue of the practice. With that said, it's much easier to do a flat fee with sliding scale because then I can CHOOSE how much I want to make per hour and the provider NEVER sees that amount. For example, if I know a client is going to take 10-15 hours a week and I want $50 an hour, then their monthly flat fee will be approximately 500-750 a month. I also know how long it takes me to submit claims so the sliding fee would accommodate new patients by the amount of claims I can produce in the hour.

This has worked great for me as I get paid for every single hour I work. I get paid for everything including making a phone call and I'm making exactly what I want to make and working the hours I want to work.  

Your income is very low for that claims volume and that many clients so I would take a look at not only What you are charging but maybe HOW you are charging. If you WANT to be reimbursed for all the time you spend you have to set your fees accordingly. Remember you do NOT have to disclose that hourly rate to your clients. Remember also to add in the expenses for software, clearinghouse, etc. Since I utilize all my clients PM systems, I'm nearly pure profit with very little overhead and costs aside from normal operating costs.

All of this adds up to 40+ hours a week for $1350.00 / mo

  That adds up to just $33 an hour COMBINED for all clients. Imagine the income if you used that $33 an hour as a base for flat fee for EACH client

[williamportor]

This doesn't seem right.  At 400 claims per month for 7 clients that is only an average of < 60 claims per provider per month.  That should not be taking 40 hours per week.  We don't measure by number of claims but by income.  One full time person should be able to produce $6000 - $9,000 depending on the type of providers and the set up of the biller (ability to autopost, etc). 

I would take a look at your systems to see if there is any place you can find a way to improve the amount of time it is taking.  I would also take a look at what you are charging them.  Maybe that is where the issue is.  But in answer to your question, $1350 per month is not normal for 40+ hours per week.

I just wish I could afford to visit you folks in NY and see how you operate. I'll bet I'd learn a lot. Maybe someday 

[PMRNC]

I just wish I could afford to visit you folks in NY and see how you operate. I'll bet I'd learn a lot. Maybe someday 

William, I'd be happy to talk to you more about how I do my flat fee pricing. You can send me an email to: linda@billerswebsite.com   When I was in NJ and PA I did % based billing but when I went to NY I had to have a different way, but in the long run it's been more profitable!

[williamportor]

Thanks, I'll get back to you soon via email.

[Michele]

I have a different opinion, since I do charge a monthly fee it is based on how much I work. I couldn't measure how much I make by a provider's revenue as I'm in a state that prohibits fee-splitting so my fees cannot be even remotely related to the revenue of the practice. With that said, it's much easier to do a flat fee with sliding scale because then I can CHOOSE how much I want to make per hour and the provider NEVER sees that amount. For example, if I know a client is going to take 10-15 hours a week and I want $50 an hour, then their monthly flat fee will be approximately 500-750 a month. I also know how long it takes me to submit claims so the sliding fee would accommodate new patients by the amount of claims I can produce in the hour.

This has worked great for me as I get paid for every single hour I work. I get paid for everything including making a phone call and I'm making exactly what I want to make and working the hours I want to work.  

We charge a flat fee to our clients as well since we are also in NY.  The point I was making is that one person working 40 hours per week should be able to bring in $6000 - $9000 per month which would work out to $37 - $56 per hour.  $1350 per month is too little for someone working 40+ hours per week.  That is way less than minimum wage.  You need to keep in mind that your hourly fee has to include the cost of doing business which includes medical insurance and taxes that are normally paid by an employer.  So if you would be willing to work in an office for $15 per hour you would need to make more like $25 per hour to cover the cost of doing business.

[PMRNC]

Costs of doing business are not passed on to the clients, or rather they shouldn't be. Things like training, coding books, accountants, lawyers, etc. The only "costs" to a client should be the costs associated specifically to the client such as claim forms, envelopes, printer ink, phone, fax, etc. You only want to add in the costs of those things the client utilizes, your "costs of doing business" are other items that the client would not need to pay for at all as a benefit to outsourcing.

[Michele]

Costs of doing business are not passed on to the clients, or rather they shouldn't be. Things like training, coding books, accountants, lawyers, etc. The only "costs" to a client should be the costs associated specifically to the client such as claim forms, envelopes, printer ink, phone, fax, etc. You only want to add in the costs of those things the client utilizes, your "costs of doing business" are other items that the client would not need to pay for at all as a benefit to outsourcing.

Linda is right.  I should have chosen a better phrase for the expenses I was referring to.  I just wanted you to take into consideration that when you are working on your own you are responsible for your own taxes and other expenses that an employer covers when you are working for someone else.  A lot of people make the mistake of thinking "I can't charge $35 an hour!  That's not fair."  When an employer hires someone they pay about 30% higher than the hourly wage just to handle payroll.  And then there are other things to consider. 

[Michele]

Hey Williamportor, I missed these two questions:

* Should I charge extra for a client that sends me 200-300 old unpaid EOB's to call on and/or resubmit? If so, how much?

ABSOLUTELY!  Old work is harder than clean work and takes more time.  Are they giving you the EOBs with denials?  So basically you would go through, determine what went wrong and if it can be fixed and resubmit any that can be resubmitted?  You need to estimate how long that would take you and bill accordingly.  For example, without knowing the specialty and the types of problems they run into I would make a very rough guess that 200 unpaid claims would take me approximately 12-16 hours.  Then I would multiply that by my hourly charge.  You should NOT be doing that kind of work for free.

* What would you folks charge for direct mail billing of cash customers? I'm charging $11.75 for 3 months (3 invoices)

Are you talking about patient billing for self pay patients?  We don't charge like that.  We include the patient billing in with our total flat monthly fee.  But it costs us about $.74 per patient statement to send (we use an online statement service which cuts our cost).  You need to know how much it costs you to actually send the statement.  When we hand mailed them ourselves our cost was around $1.00 for materials (stamp, envelopes, printing, paper).  So if it costs you $1.00 then up to $3.00 is the actual cost of the statements and you are getting $8.75 for your time.  The issue is what do you do if the patient is making payments?  So if they owe $150 and you send out 2 statements and then they send in $25.  Then you mail another statement and they pay another $25 and so on.  When do you stop sending statements?  At 3?  Also, how do you handle if they are coming in on a regular basis?  So they need continuous statements?  Isn't there a way you can include that in your flat monthly fee without separating it out?

[PMRNC]

* What would you folks charge for direct mail billing of cash customers? I'm charging $11.75 for 3 months (3 invoices)

I do same as Michele, all work is included in the flat monthly fee because it's based on average of hours worked so that all services are inclusive and I get paid for all work I do.
Additionally it's much easier to do this way because you are not nickle and diming the client and it's less to track which also takes time doing monthly reports/invoicing. It would be same if you were doing a % of collections since all the services involve the revenue stream they should be included. Even when I did a % years ago, I charged a % of TOTAL practice revenue, NOTHING was broken out... if I touched it (statements, reports, etc) than I got paid. I found that those clients that wanted to NOT pay for cash patient's simply didn't understand the concept of working an account from billed charges to mailing statements. OR they wanted to control that portion themselves, to which I would always remind them it's NEVER a good idea to have two sets of books. Usually that got them to understand how it benefited them to have me do all of the work including statements even to cash patients. I have never had a practice with cash patients who didn't have many that still didn't pay at time of service and needed statements to go out. Not to mention charging a different fee for different services usually added up to more work at the end of the month.

[williamportor]

I do same as Michele, all work is included in the flat monthly fee because it's based on average of hours worked so that all services are inclusive and I get paid for all work I do.



This all sounds great, but if you have no idea how much time it's going to take to do the work, how do you decide how much to charge??

[Michele]

That's tough but you just have to estimate.  Most eligibilty checks can be done online.  We don't do a lot of eligibility checking but I would say it takes about 2-3 minutes to do an average online check.  So I would guestimate that I could do 20-30 an hour.  If you are doing multiple BC and you are logged into the BC website it takes less than 2-3 minutes, and some phone calls will take more, but it should even out.  Also check with your clearinghouse.  OA allows eligibility checks as well.  Many PM systems have eligibility checking as part of the system.  You may be able to streamline it.

[williamportor]

That's tough but you just have to estimate.  Most eligibilty checks can be done online.  We don't do a lot of eligibility checking but I would say it takes about 2-3 minutes to do an average online check.  So I would guestimate that I could do 20-30 an hour.  If you are doing multiple BC and you are logged into the BC website it takes less than 2-3 minutes, and some phone calls will take more, but it should even out.  Also check with your clearinghouse.  OA allows eligibility checks as well.  Many PM systems have eligibility checking as part of the system.  You may be able to streamline it.

OK. I get it. Sorry to ask so many questions, but where most people here worked in insurance companies, doctor's offices etc. before becoming medical billers, I knew next to nothing about it. I'm now entering the intermediate part of the business, in that I now have a client base, and now have to learn to become a decent medical biller. I cannot thank you enough for the help. You folks are priceless!