General Category > General Questions
Percent Billing and OIG
Cmporter82:
--- Quote from: PMRNC on February 23, 2013, 06:01:26 PM ---
--- Quote ---Richard, thanks for your info. I'm not seeing what you are saying as to info in the site. If you have a specific in mind please post a link. Sorry to be difficult, just getting a little aggravated trying to find an answer.
--- End quote ---
What state are you in?
Also.. can you tell me why you want to charge a %?
--- End quote ---
I realize this was directed at someone else, but I just wanted to say that every biller I have contacted to get pricing info here, bills by %. That's all providers around me know and are generally unwilling to do anything but! It's aggravating.
RichardP:
Unless your client's income varies widely from month to month, your fee for services will end up in the ballpark of being a percentage of the monies you collect for him anyway. So, charging a percentage up front can sometimes be the simplest solution. We charge a percent for our collection efforts. Anything else not directly connected to collection efforts carries a separate fee - such as data mining, credentialing, etc.
For newbies who might be passing by:
http://medicalassociationofbillers.yuku.com/reply/722/Percentage-Billing-or-Per-Claim#reply-722
http://medicalassociationofbillers.yuku.com/topic/8974/Training-Primer-What-do-I-charge#.UTUadfKtZDE
PMRNC:
--- Quote ---I realize this was directed at someone else, but I just wanted to say that every biller I have contacted to get pricing info here, bills by %. That's all providers around me know and are generally unwilling to do anything but! It's aggravating.
--- End quote ---
There are a lot of things a lot of different billing companies do, doesn't mean it's right. It's not aggravating at all because once you figure out pricing your getting reimbursed for ALL of your time, your provider is getting fair reimbursement in exchange for "SERVICES" rendered. Do they pay other bills on a % basis? In states that prohibit a physician from entering into a %, your actually looking out for the best interest of the provider as well as your own interests.
--- Quote ---Unless your client's income varies widely from month to month, your fee for services will end up in the ballpark of being a percentage of the monies you collect for him anyway. So, charging a percentage up front can sometimes be the simplest solution. We charge a percent for our collection efforts. Anything else not directly connected to collection efforts carries a separate fee - such as data mining, credentialing, etc.
--- End quote ---
Richard are you agreeing that if "everyone" is doing it its ok? In the states that do prohibit it, the verbiage doesn't include JUST % billing.. ANY arrangement that constitutes as a profit of percentage. And I don't agree it comes out to the same.. NOT at all. When I billed a % I worked my butt off for 6-7% and sometimes it was barely enough to sustain costs.. Go higher and the doctors don't want to pay it. I'm in NY and since I moved here 8 years ago I've not run into ONE provider who has argued this point, I simply show them the statue and not ONE has tried to interpret it because it's absolutely CUT/Dry. I understand that the OIG only has recommendations.. but there are in fact States that prohibit it.. period and that supersedes the OIG "proposed regs" PERSONALLY I don't know why we would want to do the opposite of what the OIG recommends anyway.. but that's just me.
On a side note, a billing company just sent me a copy of a letter they got from the underwriting dept of their E/O insurance in NY.. attached was a questionnaire about their services. on there was the question about contracted rates and they wanted a copy of contract. When I looked into mine I noticed when I attached mine for NY it did not include % so I didn't get the questionnaire, upon asking my own agent he told me that they were FULLY aware of the NY regs and fee-splitting arrangements with physicians and that contracts IN state of NY that violated that would not be provided coverages.. Stands to reason because the contract wouldn't hold up in a the NY courts. Makes me wonder how many billing companies are not even getting proper insurance. If they were surely they would all be aware of this.
Tiring discussion.. whoever wants to bill % .. go for it. I'll continue it as a marketing point to steal clients from the ones that want to disregard the law.
RichardP:
Linda asked: Richard are you agreeing that if "everyone" is doing it its ok?
No. I was not offering an opinion on OK or not OK I was responding to Cmporter82's "complaint" and giving a possible reason why s/he is finding so many people charging a percent.
--- Quote from: Cmporter82 on March 04, 2013, 05:43:27 PM ---... I just wanted to say that every biller I have contacted to get pricing info here, bills by %. That's all providers around me know and are generally unwilling to do anything but! It's aggravating.
--- End quote ---
Linda stated: And I don't agree it comes out to the same. I agree with you. That is why I did not say that it comes out the same. I said two separate things, neither of which was that. The second thing I said was that charging a percent can sometimes be the simplest solution. Note that I didn't claim that it was a simple solution (big difference between "simple" and "the simplest"). The second link I provided in my last post shows that determining pricing solutions for one's billing business is not a simple process in many cases.
The first thing I said was that, unless a client's income varies significantly, a consistant flat fee will end up being some percentage of the income that the biller brings in for the client. This is a math statement, not a political one. If your clients have a relatively stable practice, you could add up the income you collected for them over the past 36 months and add up the fee you charged for collecting that income over the past 36 months. Divide the total fee income by the total monies collected and you will get a percentage. If your client's practice stays relatively stable for the next 36 months, you would "earn" roughly the same amount of money if you charged him that percent rather than your fee. This is a math issue, not a political one.
--- Quote from: PMRNC on March 04, 2013, 07:50:33 PM ---When I billed a % I worked my butt off for 6-7% and sometimes it was barely enough to sustain costs.. Go higher and the doctors don't want to pay it.
--- End quote ---
Translation: your flat fee costs the doctor more than a standard 6% - 7% percentage fee would cost him. In a state where fee-splitting is not illegal, you might be under-bid by someone else offering to do the billing for a percentage fee. From the time I started reading your comments about fee-splitting, it occurred to me that this is the bind you (and others) are in. If you charge a percentage fee high enough to cover your costs and give you a profit, the doctor won't hire you. That is the real reason you prefer a flat fee over a percentage one (ignoring the anti-fee-splitting laws of New York for the moment). It covers your costs and gives you a profit (I assume), but it costs the doctor more than he would be willing to pay if you offered him a percentage fee. It's OK to admit to that. There is no point in working if you can't make a profit.
PMRNC:
--- Quote ---The first thing I said was that, unless a client's income varies significantly, a consistant flat fee will end up being some percentage of the income that the biller brings in for the client. This is a math statement, not a political one.
--- End quote ---
I suppose when you take two numbers you could indeed make them come out with the same mathematical formula to arrive at the same number, that is correct. So when I made $1300 BEFORE expenses doing a % and then after converting to flat fee $2100 as example for one small solo provider I've kept through my transition to flat fee, that would come to 8% ... finding the % for the $2100 would be about 13.5% (not taking into account expenses, sliding scale for new patients/practice growth) So sure.. I found a calculation to come to a %. But still the flat fees I charge are not "constructed" from revenue percentage at all.
--- Quote --- If your client's practice stays relatively stable for the next 36 months, you would "earn" roughly the same amount of money if you charged him that percent rather than your fee. This is a math issue, not a political one.
--- End quote ---
No, I wouldn't earn roughly the same. Your not accounting for client expenses, OR perceived value of work (AMOUNT of work done) that % is before you pay expenses and with NO baring of work involved! The flat fee I collect already has expenses deducted and the sliding scale applied for provider growth (New patients) So how can you say you "earn" the same? Not by a long shot. It took me a long time to really learn about perceived value in business and if you present it the proper way from the get go you will NOT have a problem. % may be the "simplest" way, but it's NOT representative of value, and hard work. It's a number a biller would come up with that is going to sound good to the provider. You know this, I know that, why side step it? Billing companies charge a % only because they know the doctor loves the idea that "You don't get paid until they get paid" that is the only advantage aside from it sometimes being the "simplest" of ways. With flat fee, there are no surprises, I get paid what I AM WORTH and for all time I put in. No more spending HOURS on one appeal only to get paid a small percentage of what I collect on that appeal maybe a month or two later.
Another thing to consider is that at the various seminars put on by the carriers and Medicare and even the AMA, they are advising physicians to be extra cautious with PM companies and the method of charging a %. The OIG frowns on it, it's an open door to the end of it, and it is indeed an incentive to commit fraud. In my opinion only in states OTHER than where it's permitted, I do wonder why billing companies are undercutting their services when it really is simple to come up with a better formula to where everyone is satisfied and they are earning by the amount of work they do as well as the quality and efficiency of that work. In states where it's prohibited.. It's blatant disregard for the law and the providers you are signing.
--- Quote ---Translation: your flat fee costs the doctor more than a standard 6% - 7% percentage fee would cost him. In a state where fee-splitting is not illegal, you might be under-bid by someone else offering to do the billing for a percentage fee. From the time I started reading your comments about fee-splitting, it occurred to me that this is the bind you (and others) are in. If you charge a percentage fee high enough to cover your costs and give you a profit, the doctor won't hire you. That is the real reason you prefer a flat fee over a percentage one (ignoring the anti-fee-splitting laws of New York for the moment). It covers your costs and gives you a profit (I assume), but it costs the doctor more than he would be willing to pay if you offered him a percentage fee. It's OK to admit to that. There is no point in working if you can't make a profit.
--- End quote ---
Yes, but again we are talking "PERCEIVED VALUE" A doctor is going to jump to the percentage as what he perceives to be cheaper. If you don't QUOTE a percent of revenue and you calculate a monthly flat fee/sliding scale, they don't HAVE a % in their head. I don't justify or explain my method of billing beyond telling them that in the state of NY THEY are prohibited from entering into a fee-splitting arrangement. USUALLY that does it, but when I was in PA doing it, I merely just said, with this method of charging I am compensated for my time as well as costs and the number will ALWAYS be significantly cheaper than going in house. Again, though I've never gotten into any argument and have never been challenged further on it. Our perception that doctors are "greedy" or "inconsiderate" or "cheap" is wrong. We are the ones that got hung up on the old and tired marketing ploy of "we don't get paid until you get paid". Not them.
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