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Profit Margin

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sagemb:
Hello Everyone,

So my only doctor client has finally joined a group practice a couple of months ago. I helped him get started just a month before he even opened his clinic. So goes to say that for the last 7yrs he was very happy with the billing. Now the client was in Chicago and I being in Houston, the likely candidates for the software seem to be cloud based at the time. I went with AdvancedMD. I did pay quite a bit for it but it got the job got done so good. Anyways, we had him switch over to Kareo about 3 years ago. The pricing was better, a pro. But making any adjustment to a bill already sent isn't very intuitive, a con. I did figure it out but it's a list of things that one has to do each time. But what I really like about Kareo is that I can pull up all the charges and rebill a bunch in very few clicks, BIG PRO. Anyways, I'm going off track...

Get ready...here comes math...

Now, all this while for 7years...I'd been charging him 6% on collections like most of us. I did "everything". It was getting me around an average of $2k/mo. Around $350 goes to Kareo, another $200 in stationary and postage. And as you all know, billing takes a LOT of time out of your life. So I'm on average left with around $1400/mo. And may have averaged around 52hrs a week times 4 ...equals 208 hrs of work. Divide that with 1400 dollars and I'm looking at around $6 and change an hour.

Are you guys in the same boat as myself? Am I doing something very wrong or is this normal money for billers? Notice, I haven't even taken out provisions for internet, phone, electric, tax, etc.

I also realized that I'm coming up with self analysis only now that I'm looking for new client. Also, how do billers work on multiple doctors simultaneously? It takes me what I stated above.

Michele:
When you say you did "everything" do you also mean patient billing as well?  The reason I ask is because when you are charging percentage on insurance only that can be a problem.  (% billing in itself can be a problem not only because it is considered fee splitting in many states but I'm not addressing that right now since that is not the question)  Copays and deductibles are higher than ever and for the billing services that are still charging a percentage and only do insurance billing this is killing them.

The basic answer to your question is no, that is not normal money for billers.  This is not a get rich quick business but it's not a lose your shirt business either.  For an account that brings in about $2k per month I think that 52 hours a week is very high.  Our employees can handle about 3-4 x's that in a regular 40 hour week.  That includes working aging reports.  I would take a look at what part is taking so much of your time.  Billing?  Posting EOBs?  Working on denials/appeals?  Working Aging?  Try to break it down by task to see if something is out of order.

PMRNC:
Your scenario was why I changed my business model a few years ago.. first I got tired of building my software costs into my fees, second, I just wanted to be paid for my time, everything else didn't matter to me, Third I was tired of the hassles if they wanted out of the contract. All of those headaches were eliminated when I decided to access or utilize their PM system. Their PM system is THEIR's.. lock, stock and barrel, I have my own HIPAA compliant login and that's that. problem solved. ALL of the costs were due to time and supplies. I'm just sorry I didn't think of this 15 years ago. All the bizops and associations were tooting all kinds of "preferred software" when really it didn't matter. The practice SHOULD have final say on their PM software. No headaches, no surprises, no technical support issues, no conversion issues.. :) I've increased my profit margin with my billing clients significantly this way not to mention reduced the headaches!!

kristin:
Percentage billing is not in your favor. Especially when you are dealing with low amounts each month. If my math is right based on what you have posted, the one doctor you billed for averaged around $33,000-34,000 in receivables each month? Thus netting you $2000 each month? Now imagine if you were charging a flat fee or hourly rate all that time, ESPECIALLY because you weren't just doing the billing, you said you were doing "everything". By "everything", I take that to mean demo entry, insurance verification, billing of claims, follow-up on claims, and patient statements...correct me if I am wrong on this.

And I definitely agree with what Linda said...the provider provides the software, and pays for it, and you just log-in and do your thing. You shouldn't have to have that cost on your end.

What concerns me though, that you asked about, is the 52 hours a week it took you to work the one account. That is way high, in my opinion. For example, I am the office manager for a specialist practice. I do everything related to patient billing from initial demo entry through to patient statements, in addition to being the receptionist for the practice, and helping in the back end. Our monthly receivables are at least twice what the doctor you billed for were. And I spend MAYBE 2-3 hours a day on the billing end of things, when it is all added up each day. Granted, I have almost no follow-up to do on claims...if I have one or two a month that deny, that is a lot. Then I do remote demo entry/billing/follow-up from home for two other doctors(and use Kareo for one of them). I average five hours a week for one doctor, and four hours a week for the other doctor. Both doctors have receivables in line with what my primary doctor has, but they have more follow-up issues, due to various problems beyond my control. If I did have control, my hours for these doctors would be even less.

So...I guess my question to you would be why it took 52 hours a week for the account? It doesn't seem to be a claim volume issue, based on the numbers you gave. I know Kareo has instant eligibility available, so that shouldn't be a problem time-wise, and you know where you stand with an insurance before you bill a claim. You did mention re-billing charges, which leads me to believe there were denials to be dealt with...so if that is the case, is follow-up on denied claims something that accounted for a lot of the 52 hours a week? And if it is, why where there denials? I would love to be able to offer suggestions for how to streamline your process, etc, but think I need more info at this point.

sagemb:

--- Quote from: Michele on November 18, 2014, 06:03:37 PM ---When you say you did "everything" do you also mean patient billing as well?

--- End quote ---
I knew you'll catch me cutting corners on typing the full services lol
By everything here, I meant:

* Demo Entry
* Elig. Verification
* Insurance and Patient Billing
* Payment Posting for insurance as well as patients including copays
* EOB/Denials Handling
* Pending Claims Follow Up / Aging Reports
* 2nd and 3rd carrier billing if it goes to that
* Patient statements
* Pending Patient Payment follow up
* As well as take any calls from Insurance (hardly any) and patients (a lot of calls) when they have questions about the balance.

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