Thank you so much Michelle - My company is in the process of switching over to the flat fee becasue we bill in multiple states and I don't want to have a legal issue - I think NJ is a sticky one and that is where alot of our providers are. I have sinces moved to SC and am trying to acquire some practicioners here but it is quite different. The marketing here is not as aggresive apparently!
QuoteThank you so much Michelle - My company is in the process of switching over to the flat fee becasue we bill in multiple states and I don't want to have a legal issue - I think NJ is a sticky one and that is where alot of our providers are. I have sinces moved to SC and am trying to acquire some practicioners here but it is quite different. The marketing here is not as aggresive apparently! There are actually a few formula's you can use for flat fee billing. The end of the formula always turns out where you get paid for all the time you put in which is the nice part of flat fee billing. The formula I use is based on hourly rate. If you have less experience (meaning your hourly rate may do your flat fee justice) than you can use a 6 or 12 month analysis of receivables, claims etc. For me I start out with what I want to be paid per hour $25/$35 an hour. I estimate the time it will take, hourly rate I want to make, add expenses for that client (postage, clearinghouse, paper, ink, phone, etc) and there you have it. Here is a rough example:Based on $25 per hour: Estimated time for client per week = 15 15X$25=$375 X 4 weeks = $1500 + Expenses $300 = $1800 per month. I also use ACT which allows me to time my work by provider so that I can run my own reports to make sure I am accounting for all my time. I simply hit the timer in that clients database, work strictly on their claims and/or calls, etc and whenever I stop, I pause the timer. At the end of the month I run reports and I can see if/where I am losing money. I also use a sliding scale. If I can enter let's say 5 claims/ 5/patients in an hour, that's $25 per hour, so i would charge the client an additional $25 for every 5 new patients.If I am doing consulting also with the same practice I have two contracts and my consulting/training is done hourly. I also get asked if I reveal my hourly rate, no, there's no need. You have all the information you need to just state the flat fee is based on the estimated time, and work involved. So far I've never been asked what my hourly rate was when I give them the flat fee ideology. I do have providers ask what my incentive is since I'm not collecting a percentage and my answer without hesitation is "My reputation" and that usually suffices NJ is not bad really, I used to live and work in NJ but after I moved I stopped doing billing for a little bit but they adopted regulations that require third party billing companies to register their businesses. It is a little tedious and they really don't have any one "qualified in our industry" to "credential" us so they base the registration on your submission of information the need to have to register you.
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?
QuoteVery good formula. I am confused that before working for client how can we figure out how much time we will spend on the client?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!
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