2. For a provider collecting $1.5 Million per year, how many people I would need to handle his end-to-end billing? And what would be the best % to bill?
Actually plain and blunt I offered him 7% of his revenue for all the services right from Appointment reminder to Patient Collections. Is that feasible?
We do the billing for a 1.5 Million dollar provider and charge 7%. We do anywhere from 30-50 claims each day. You have to figure in all the time spent calculating and depositing every Insurance and patient payment, denied claims management, patient calls, statements, entering patient demographics and refunds on top of all the obvious services you'll be doing. Our practice management software costs us $250 per provider so thats another $750 per month on this particular account. 1.5-2 full-time employees for an account this size is about right.
We have billed for an account similar to this, internal medicine, we did all but verify benefits and appt reminders. And NO CODING. It took 1 employee full time and another employee that could handle some other stuff as well. I agree with Linda, no percentage billing. I prefer a flat monthly fee. I do not like quoting a provider an hourly fee. They do not take all of our expenses into consideration. When you quote a doctor an hourly rate they think they are paying an employee that amount per hour, not a business.
Definitely no percentage billing for claims as old as 2011, there's too much chance you'll spend time on claims that will never get paid. If they want you to work with the old claims anyway, flat fee is crucial. You could even do a flat fee for claims over a year old and percentage for claims under a year old. I just would be wary of getting stuck with a pile of claims that are deadweight with nothing to show for it in the end.
Look at what you need to be making to provide for yourself, at minimum, per year. Include your business and advertising expenses. Break it down into a monthly wage. Add foreseeable monthly expenses for this client. Add a small cushion for emergency expenses. That's your minimum monthly flat fee, if you're expected to work full time on this alone (if not, adjust what portion of your monthly wage would need to be paid by this client/factor in wages for any additional employees you would need to hire for this). Once you are more experienced, give yourself a raise in the first category and recalculate.
"How do you calculate the amount collected for every month, so that you bill 7% of that? Where do you get that data from?"