Author Topic: Protecting your medical billing company with a good contract  (Read 505 times)


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Protecting your medical billing company with a good contract
« on: January 24, 2018, 12:52:15 PM »
I have been medical billing for years. But I am curious what other medical billing companies have to say about how they protect themselves in their contract in regards to: In one situation I contracted with a physician to do his old billing (Clean up) and his new billing. I worked on the old for about a month. After cleaning up his old billing and requested when I would receive the new billing. He stopped calling me and wont return phone calls.  What should i have documented in the contract that would have covered me in this. I did document that I was cleaning up old and doing the new billing. Now since I am on a percentage of the old billing. Anyone who has cleaned up old billing knows that not all claims will not be paid for what ever reasons. So cleaning up old claims is not so profitable.  However it was a way to get to the new billing. 


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Re: Protecting your medical billing company with a good contract
« Reply #1 on: January 25, 2018, 06:30:07 AM »
The contract of a medical billing company is probably the biggest test a billing company faces and it almost seems like every other client is just another test.  ::)  With that said, what you can do for the future is learn and document each incident. Examine your contract and consult with an attorney. One of the things I did when I was about a few years into doing this was sit down and make what I called my "pessimistic outlook list". I literally sat down and made a list of all the things that have happened and I think could happen. First thing off the bat was to lose some of the contractual risks. That included the % based model. Got rid of it. Doing a termination clause in a contract that's billed on a % is nearly impossible to enforce. Next were all the things when ending a contract that made business difficult and stressful. Reports, documentation, who owns what, etc., etc., so changing my business model (thus changing my contract) about software was another biggie. I work in my clients software which took away a lot of the aggravation in startup and if there were a termination. No records to sort, no arguing about documentation, reports, conversion responsibilities, etc.

For your situation, one of the things you could have done was come up with a "minimum time period" along with a setup fee (non refundable). You could have had a setup fee that would be an average of 60-90 days worth of revenue for yourself.
I'm guessing since he hasn't returned your calls he also hasn't paid you? Did your contract specify new billing with a full and complete list of services you would be providing? Did your contract specifically state the responsibilty of the client on sending you claims; such as time frame, method, etc? 

And of course the big question: Did you have an attorney look over your contract? I think we've all tried to avoid that step on this one and probably more than 90% of us have shot ourselves in the foot for not doing it. What I did was find an attorney who worked on a retainer, I pay him yearly and he goes over my contracts, defends the contract and will work any issues I have within the scope of that contract. When I started in 1997 I was foolish and naive enough to base my contract off of a 2 page sample contract found on the internet, over the years my contract has grown to 13-15 pages but since changing business models a few years back I'm down to 11 pages. I cannot even imagine a good contract being less than 7-8 pages.

All business owners (medical billing business as others) will have problems such as this, some will be worse, some won't be. The important thing is to use each of these experiences as a learning experience and improve. Yes it could cost a few bucks more to do so (attorney fees) but in the long run and big picture of things, it's going to save you not only money but a lot of headaches. The attorney you choose does NOT have to be a healthcare attorney as many might think. A good contract lawyer is all you need. When I found my attorney who I've been with for about 12 years now, I gave him a list of pertinent things pertaining to medical billing/consulting/HIPAA/Records Retention and state laws so he had a basis for contract and then I made my own contract (NEVER EVER AGAIN looking at another sample contract) and had him put it into legal language. With all that leg work he gave me $500 off his retainer fee and we have had the same arrangement every year. He even oversees my E/O insurance premium's and policy documents as well. If I need a letter to a client (payment late, etc) he has it ready for me in one business day and all covered under the retainer. He even lets me carryover any retainer amount left over so my annual retainer is hardly anything lately and I attribute that to a good contract now.

We've all been there and it's frustrating. You'll get through it. Just learn from it and improve. Did you send this provider a termination letter (certified) ? Assuming you had a termination clause, you should follow your part in it and terminate him/her according to your contract and cite breach of contract with a copy of the contract and all breaches highlighted. Since you were charging a % and it's unlikely he will pay, you could try to negotiate a settlement for final payment. If you provide more info on the terms of your contract and his actions (not paying, etc.) maybe I can be a bit more specific with advice for that situation regardless of the contract. If he's already breached terms of the contract you may have other options to get paid.
My termination clause actually allows me to terminate a client "IMMEDIATELY" for any breach ..none of this 30 day nonsense.
Linda Walker
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