Starting a Medical Billing Business > Starting Your Own Medical Billing Business
Flat Fee vs. Percentage
PMRNC:
--- Quote ---Very good formula. I am confused that before working for client how can we figure out how much time we will spend on the client?
--- End quote ---
In any formula (theory) you are going to estimate some aspects of it. When I say estimate however it is assuming you have gone over the practice and did a good analysis of the receivables, taken into account type of claims, do they do a lot of claims attachments, appeals, workers comp, and you want to account for phone time doing verifications and authorizations. When I know a client is almost ready and it comes down to pricing, I have them complete a very thorough analysis, I then can determine my time in a few different ways. If I have a similar client I can estimate my time based on that client, I can estimate by just the 5/6 patent per hour, etc. It's not exact science, but no theory is. And like I mentioned there are other formula's such as basing it on average of receivables (6 mos - year). If it's a new practice, obviously you cannot do that so since it is new you will also want to take into account time spent possibly credentialing for example and other tasks you might help them setup that are included in your services within your contract.
Doing flat fee is actually MUCH easier than arriving at a %, it's more accurate, PLUS you get paid for your time like any other business would!
KLA:
Thanks so much ladies. I have a question... I know I read it some where here... is sc and nc illegal to billing a percentage? I know NJ is sticky and I am now charging flat rate EXACTLY as michelle said. Thanks
KLA:
Hey Charlene,
I as well have a twisted mind. We all have to to do what we do! LOL
aksharhealth:
--- Quote from: PMRNC on February 09, 2011, 10:57:49 AM ---
--- Quote ---Very good formula. I am confused that before working for client how can we figure out how much time we will spend on the client?
--- End quote ---
In any formula (theory) you are going to estimate some aspects of it. When I say estimate however it is assuming you have gone over the practice and did a good analysis of the receivables, taken into account type of claims, do they do a lot of claims attachments, appeals, workers comp, and you want to account for phone time doing verifications and authorizations. When I know a client is almost ready and it comes down to pricing, I have them complete a very thorough analysis, I then can determine my time in a few different ways. If I have a similar client I can estimate my time based on that client, I can estimate by just the 5/6 patent per hour, etc. It's not exact science, but no theory is. And like I mentioned there are other formula's such as basing it on average of receivables (6 mos - year). If it's a new practice, obviously you cannot do that so since it is new you will also want to take into account time spent possibly credentialing for example and other tasks you might help them setup that are included in your services within your contract.
Doing flat fee is actually MUCH easier than arriving at a %, it's more accurate, PLUS you get paid for your time like any other business would!
--- End quote ---
Thanks Linda.
I will try with my next potential client.
PMRNC:
--- Quote ---Thanks so much ladies. I have a question... I know I read it some where here... is sc and nc illegal to billing a percentage? I know NJ is sticky and I am now charging flat rate EXACTLY as michelle said. Thanks
--- End quote ---
NC is, SC is ok so far. My opinion is to go flat fee across the board so you are assured 100% OIG compliant. NJ is ok too.
It's important to know that in the states it's not a good idea, it's because it's illegal for the provider; NOT the Billing company to enter into any fee-splitting arrangement.
NJ just has funky registration requirements, which are a pain, however I like the idea and hope the other states follow suit. Gives us better credibility.
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