Payments > Insurance Payments
Insurance payments
PMRNC:
--- Quote ---Or is it just a cost analysis of how much time you think it will take per week/month?
--- End quote ---
That's exactly how it's done :) It's hard for a new billing company to set this up. When I switched I had current clients so I could perform time/cost analysis using a year average. The base rate is based on MY hourly salary which the client really never knows. No reason for them to know that. Either way it's still cheaper than all the costs associated with in-house employee so there is still incentive to outsource.
RichardP:
maxamillion125 - Linda and I have had a vigorous debate on the subject of percent vs. flat fee. I won't rehash that conversation here, except to make a few points for your benefit.
* if you charge a flat fee, and the doctor's business stays fairly constant over time, that flat fee divided by revenue collected actually is a percentage of revenue collected (e.g., divide your fee by, say, $350,000 average collection-per-year for three years = a percentage of collections). In one of our converstations on this issue, Linda stated her fee, as a percent of the stable revenue of her clients. That percent was quite high, and I doubt any doctor would hire her if she told the doctor up front that percentage as her "fee" to do the doctor's billing.
* we charge our clients a fee of $2,000 up front when we take them on, to cover set-up costs. We allow that payment to be amortized over 12 months. If, at the end of 6 months, both us and them are satisfied with the arrangement, we cancel the remaining $1,000.
* I don't see how billing a 7% fee for all monies collected won't cover your costs and leave something for profit. I'm sure there are exceptions - but the fewer patients the client sees, the less of your time you spend on that billing, so your own expenses go down as the income collected from that client goes down. The reverse is also true: as the number of patients your client sees increases, the time you spend on his billing increases, your costs increase, but so does your income.
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If you do electronic billing, my understanding is you will get an electronic EOB - which is what you need for automated posting. You should be able to print that electronic EOB before you post it. But this technology still has a ways to go before it is fool-proof. A number of folks we know tried electronic posting and eventually went back to manual posting. Fixing all the errors created in electronic posting made the time spent posting not that much different from the time required for manual posting. You will need to experiment to find the right balance for yourselves.
maxamillion125:
--- Quote from: PMRNC on October 24, 2013, 01:07:13 PM ---
--- Quote ---Or is it just a cost analysis of how much time you think it will take per week/month?
--- End quote ---
That's exactly how it's done :) It's hard for a new billing company to set this up. When I switched I had current clients so I could perform time/cost analysis using a year average. The base rate is based on MY hourly salary which the client really never knows. No reason for them to know that. Either way it's still cheaper than all the costs associated with in-house employee so there is still incentive to outsource.
--- End quote ---
One of the major issues I see from switching from percentage based billing to a flat fee is when our yearly contracts expire our clients will know exactly how much they've been paying us monthly compared to how much they're taking in. If we've been averaging around $2500 a month for a client and his practice is fairly consistent how do we convince him that we're now going to charge him $3500 flat rate fee for the exact same job we've been doing?
maxamillion125:
--- Quote from: RichardP on October 24, 2013, 01:55:07 PM ---maxamillion125 - Linda and I have had a vigorous debate on the subject of percent vs. flat fee. I won't rehash that conversation here, except to make a few points for your benefit.
* if you charge a flat fee, and the doctor's business stays fairly constant over time, that flat fee divided by revenue collected actually is a percentage of revenue collected (e.g., divide your fee by, say, $350,000 average collection-per-year for three years = a percentage of collections). In one of our converstations on this issue, Linda stated her fee, as a percent of the stable revenue of her clients. That percent was quite high, and I doubt any doctor would hire her if she told the doctor up front that percentage as her "fee" to do the doctor's billing.
* we charge our clients a fee of $2,000 up front when we take them on, to cover set-up costs. We allow that payment to be amortized over 12 months. If, at the end of 6 months, both us and them are satisfied with the arrangement, we cancel the remaining $1,000.
* I don't see how billing a 7% fee for all monies collected won't cover your costs and leave something for profit. I'm sure there are exceptions - but the fewer patients the client sees, the less of your time you spend on that billing, so your own expenses go down as the income collected from that client goes down. The reverse is also true: as the number of patients your client sees increases, the time you spend on his billing increases, your costs increase, but so does your income.
--------------
If you do electronic billing, my understanding is you will get an electronic EOB - which is what you need for automated posting. You should be able to print that electronic EOB before you post it. But this technology still has a ways to go before it is fool-proof. A number of folks we know tried electronic posting and eventually went back to manual posting. Fixing all the errors created in electronic posting made the time spent posting not that much different from the time required for manual posting. You will need to experiment to find the right balance for yourselves.
--- End quote ---
Thanks for the info regarding flat rate vs percentage billing, I see where your coming from.
Regarding the electronic billing this is how I believe it works. Feel free to correct me if I'm wrong. When you submit a claim whether it be electronic or paper you will receive a paper EOB and paper check by default. Your payer has to have the option for EFT (electronic funds transfer) and ERA (electronic remittance advice) and you have to sign up for it separately to to get EFT and ERA (most payers offer it now.) You can have EFT without ERA. Ideally, I would like to have EFT, ERA and still receive a paper EOB for our records, but many payers are trying to reduce costs, so if you sign up for ERA you won't receive paper EOB's anymore. The main benefit of EFT is your client will be paid quicker and you don't have to manually deposit checks. The main benefit of ERA is your insurance payments will auto post but it's not a perfect system, like you said.
dekenn:
One of the other things to consider about percentage billing is the fact that physician's fees are constantly being lowered. Since the physicians are taking a 2% cut in their Medicare pay, so will you!
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