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Can you make a profit by charging 4%?

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PMRNC:

--- Quote ---There are dozens of huge companies who do this business, actually well over 80% of the business is done by a handful of companies, they ALL outsource.
One company, which is public so their records are public information; Athena Health symbol ATHN, is valued at 2.2 Billion dollars; its CEO got paid $300 million dollars (including stocks) last year, he is not in jail , he is doing fine, living in a mansion of 50 million dollars. Again all of this is public information.
By the way they charge 6.5%.
--- End quote ---

Mom said.. "If everyone was jumping off the bridge, does that mean you should and that it's ok to jump off the bridge"   I'm confused and your confusing others because you come here, look for help, some of us have been doing this for decades, you want feedback and our opinions and we give them. But it does seem like you want us to tell you what you want to hear.    Did you ask Athena Health what their protocol is for patients who don't want EHR and choose to opt out? Did you ask any healthcare provider or offshore company what measures are in place for telling patients their information is being sent offshore?    Seems to me your looking only at the $$ issues and you again, just want us to tell you what you want to hear. At this point.. good luck and I hope things work out for you. Not much more we can say.

RichardP:
A few points that occurred to me reading through this:

1. tallmanusa does not sound to me like any doctor that I have ever talked to that has been in private practice for 30 years.  Maybe he was a corporate worker-bee doctor working for wages.

2. From my conversations with big business, it sounds like they plan to honor HIPAA mainly in the breach.  "Let them sue us" seems to be a safe proposition because a.) most patients don't know enough about what their rights are to know what a violation would be; b.) most patients have no clue what is being done with their electronic data, and so would not even know that a violation has occurred, and; c.) the agency charged with policing HIPAA violations does not have the budget to monitor the majority of violations.  They few fines they will be able to levy will just be a cost of doing business.

3. As of about three months ago, a great many users were complaining that they were having trouble getting Practice Fusion and Kareo to talk with each other in all the ways needed in order to do billing properly.

4. Practice Fusion will only display 1,000 patients at a time.  For a practice that has more than a thousand patients, cleaning up problems in the database becomes impossible.  Practice Fusion has a limited set of criterion on which to search, and the problems that don't meet those criterion are invisible to you unless you know the specific patient to search for.

5. Office Ally comes in two parts:  a.) Practice Mate, which you use as any practice management system, inputting patient demographics, insurance info, and billing codes.  You bill the HCFA stuff electronically, and the patient statements by printing them, and; b.) Office Ally.  The Office Ally side is electronic billing only.  If you have your own billing program, you can print your statements to a text file and upload that text file to the Office Ally side of "Office Ally".  They turn that text file into electronic data and send it off electronically just as if you had submitted the data through the Practice Mate side of things.  tallmanusa can accept clients who are not web-based and still do electronic billing in this way.

6.  I have a number of clients who see 20-30 patients a day, and all of them have a Physician Office Lab (POL).  Because of the Labs, we do very complicated billing, the tracking of which requires copious pop-up note-posting on the account itself, not in some contact software that has to be accessed separately.  Practice Mate in "Office Ally" does not have such note-posting ability and I think Kareo does not either, so they are useful only for very simple billing.  Kareo can handle more complexity, and has way better reports, than "Office Ally" - but is still not complex enough for my needs.

7.  Many of my clients are not Participating Providers in Medicare; more will probably be dropping out.  None plan to use EMRs.  But they still have to bill.  They use their billing software for Scheduling patients, inputting demographics and insurance info.  We put in the DX and CPT codes and print to text file, then upload to the Office Ally side of "Office Ally" for electronic billing.  Probably five of my clients bring in (not "charge", but actually bring in) more than one million dollars in income per year.  My clients do high-volume, high complexity work, which makes for complicated billing.  And we manage quite well with the set-up I just described.

8. Practice Mate in "Office Ally", Kareo, and Practice Fusion, are not complex enough to handle our billing needs with the ease that our current software does.  But then, it cost a good bit to buy.  We charge 5% plus certain minor fixed expenses, and pay some of our workers $30.00 per hour, and still turn a nice profit.  But we are in Beverly Hills.  Your mileage will vary if you are outside of a major metropolitan area.

I have no doubt forgotten some of the other points I was going to make, but hopefully this much helps someone.

tallmanusa:
Thanks for the comments Richard, very helpful.
I agree with you that most billing companies have many things to worry about, HIPAA is not one of them, as long as you follow some basic rules do your best to comply with them.
My impression is that the platform you use is the key to this business, you survive or perish on the system you choose. This is an IT business more than ever, or at least it has become one now.

Office Ally/ Practice mate, I did not think that it was a good enough system that I would want to offer; but it is free.

Kareo/ Practice Fusion is good enough and will do for most practices, cost $299 per month for the top platform, but not good enough for large practices.

What if you have large practices:

There are two that I investigated, I am sure there are others.

Advanced MD
Health Fusion/ Meditouch, this works with ipads as well.

The above two are more expensive than Kareo.

If you charging only 5% your profit is constrained if you offer high end platforms.

I could not pay $30 per hour and be profitable. In addition the technology is so superb, why do I need such experienced biller? I plan to outsource the billing for a fraction of that cost.
I have to make a profit, otherwise I would not be doing this for long. You can charge more, which I would not, or you can skimp on the platform which is imprudent or you outsource, which I chose.
Outsourcing does not have to be offshore, it can be within the United States.

QueenAlicia:
AMEN CLAP CLAP CLAP!!  ;D


--- Quote from: DMK on November 16, 2012, 01:37:57 PM ---Athena is probably doing everything right, but I doubt that they all are.  BTW are you working for Athena? Because it sure sounds like a sales pitch.

This forum is a great place for back and forth discussion about ALL the complexities of Medical Billing, not just a soap box for doing it ONE way. 

As a nation, we are built on a lot of small businesses.  True, there are large companies, making lots of money, but this forum is mostly about the little guy or the newbie or the person who wants the American dream of owning their own business.

There are laws in place (some good, some bad, some well intentioned but with bad consequences) that we ALL have to follow.  The big guys can pay the fines and pass the costs on to their consumers, the little guy needs to do it RIGHT the first time and all the time. 

If you don't understand this, you don't understand most of the people in this forum.

--- End quote ---

RichardP:
tallmanusa - more stuff to think through.  Questions are not confrontational; rather, they are meant to stimulate thought.

1.  I should have been more clear.  The "big business" I was referring to were hospitals, doctors, data aggregators (who are sucking in data from hundreds of hospitals for the purpose of data mining - without the knowledge or permission of the patient), and anybody else who will be doing something with electronic patient data.  I was not necessarily referring to billing companies - although some might fall into that category - like the larger ones who ship stuff overseas.

2.  The combination of Practice Fusion and Kareo might work for some physicians - but pay attention to the complaints on Practice Fusion's boards about Kareo and Practice Fusion having difficulty talking to each other for billing purposes.

3.  Any doctor who is already established in private practice will have his own billing setup.  Why would he need you?  You have to have an answer he will buy into if you expect to get him as a client.  That is why I mentioned the Office Ally side of "Office Ally".  It is simply a clearinghouse - like any other clearinghouse - except that it is free if Medicare claims are less than 50% of total monthly submissions, and $20 per month if Medicare claims are 50% or more.  And you can take data from any billing program that will print claims to the hard drive as a text file - which most if not all of them do - and upload that text file to Office Ally.  That would perhaps be a service to a physician who is not yet billing electronically, who wants to, but doesn't have the funds to pay for a system that bills electronically.

I would recommend the Practice Mate side of "Office Ally" only to those who must do electronic billing and don't currently have their own billing software or the means to pay a monthly fee for a cloud system (who would that be - doctors just getting established in private practice?).  It is seriously limited in terms of being able to create reports and clean up mistakes in the database.

4.  Have you figured out the answer to this question yet: Do you want to build a kingdom, or do you want to make money?  Sometimes you can make more money by being smaller than you can by being bigger.  I have a number of clients who earn (not bill) over one million dollars per year.  We collect that money with the homely system I described above - a legacy billing program that does what I need it to do for the complex billing we do, print the HCFA output to a single text file, and upload the text file to the Office Ally (clearinghouse) side of "Office Ally".  How could my clients practice better medicine, and how could I make more money, by having a shiny, new "IT solution"?  My clients and us already faced that question together and decided we are fine as we are.

5.  Doctors don't make money by working hard.  Doctors make money by being paid for the work they do.  And they get paid for the work they do ONLY by making sure ALL the work they do is billed, and billed at the appropriate level. That is the value of a biller who knows what they are doing.  Here's an example.  Ponder what I've said here as you think through what you are actually trying to do.

We have been asked to take on a client who has established a state-of-the-art 50-doctor doctors' group with state-of-the-art equipment.  Labs, radiology, whatever-you-need, can all be done on-site.  Problem is, they are a start-up, and income does not yet exceed expense (the doctors are very well paid, which is part of the problem).  We will take them on as a client if they make it to the point that income exceeds expense (we don't fund start-ups; we also want to get paid for our work).  We consulted on the start-up, and have been monitoring the billing for them.  Their billing is currently being handled by a large billing company that sends the work offshore.  They bill what is sent to them, and nothing more (is that the kind of company you are wanting to create?).  The doctors are cracker-jack doctors who are top experts in their field.  But they don't know diddle about getting themselves paid.  As we monitor their billing, we see time and again when they don't bill for all the work they performed.  And often, what they do bill is for a lower amount than what their work qualifies for.  In short - these top-notch doctors are leaving on the table about 30% of what they could get paid.  Yet, their current billing company (who charges more than we do) is giving the doctors zero feedback about this.  And the doctors are using an electronic billing "IT-solution" that costs several hundred thousands dollars.  And yet, even using this, those doctors are leaving on the table about 30% of what they could be earning.  The current billing company is not helping them avoid this.  The expensive IT solution is not helping them avoid this.  Only billers who know what they are doing, who give a damn, and who work hands-on with each physician can help them avoid this.  And the bad part about all of this is the doctors don't even know they are leaving money on the table until it is pointed out to them.

Hopefully, this blurb will help you better understand the lack of understanding you displayed in this part of your response to me:  "I could not pay $30 per hour and be profitable. In addition the technology is so superb, why do I need such experienced biller?"

Experienced billers who know what they are doing are the only ones who will know when you are leaving money on the table.  Technology cannot help you with this.  But this is relevant only for complicated billing.  Simple billing is another matter.  But, again, if the billing is simple, why would they need you?

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