Author Topic: Income Expectations  (Read 1215 times)

williamportor

  • Full Member
  • ***
  • Posts: 233
Income Expectations
« on: June 14, 2019, 06:52:43 AM »
Hello - 5 years ago I started in this business with a minimal knowledge of medical billing. The first 2 years were grim. Today I do billing for 9 Chiropractors and 2 Opticians, several of whom have been clients for more than 3 years.  Though I'm no superstar biller, I can honestly say I'm at least an average one. My question is, what can a decent medical biller expect to make working 35 - 40 hours a week? The reason I'm asking is my 35 hour / week efforts of claims submission, follow up of unpaid claims, posting of payments etc. net me about $2000.00 a month or about $13.50 an hour. This is less than minimum wage in the area I live in. I bill my clients based on a flat monthly fee, and feel that I'm undercharging them - but by how much?? I would welcome any input.
« Last Edit: June 14, 2019, 07:17:24 AM by williamportor »

Michele

  • Global Moderator
  • Hero Member
  • *****
  • Posts: 5846
    • Solutions Medical Billing
Re: Income Expectations
« Reply #1 on: June 14, 2019, 12:24:30 PM »
That seems low to me.  I would think one biller working 35-40 hours per week should be bringing in at least $4000.  When you determine your flat monthly fee how are you doing that?  Do you keep a work log of how many hours you are spending on each account in a month?  I would start by keeping a work log.  Of course you will always have time during the 35-40 hours a week that you cannot apply to any one account.  But a work log will help.  We do that when we want to know if an account is profitable.  We count how many hours a week we spend on that particular account, multiply it by 52, divide by 12 and then divide that number into the monthly fee.  We have to be making at least $50 per hour to operate.  (Payroll, taxes, supplies, building costs, etc.)  It won't have to be that high for you since you are a sole owner working by yourself.  But when you have employees you have added expenses.
Sign Up for our FREE Medical Billing Newsletter
Get a 10% discount on Medical Billing Products by using Coupon Code: 10OFF
http://www.solutions-medical-billing.com

williamportor

  • Full Member
  • ***
  • Posts: 233
Re: Income Expectations
« Reply #2 on: June 14, 2019, 01:16:58 PM »
That seems low to me.  I would think one biller working 35-40 hours per week should be bringing in at least $4000.  When you determine your flat monthly fee how are you doing that?  Do you keep a work log of how many hours you are spending on each account in a month?  I would start by keeping a work log.  Of course you will always have time during the 35-40 hours a week that you cannot apply to any one account.  But a work log will help.  We do that when we want to know if an account is profitable.  We count how many hours a week we spend on that particular account, multiply it by 52, divide by 12 and then divide that number into the monthly fee.  We have to be making at least $50 per hour to operate.  (Payroll, taxes, supplies, building costs, etc.)  It won't have to be that high for you since you are a sole owner working by yourself.  But when you have employees you have added expenses.

Q: When you determine your flat monthly fee how are you doing that?

A: This is where I have no choice but to do some guesswork. I note the type of practice management software I have to use (some are faster than others), number of claims, amount of other tasks such as posting of payments etc. and come up with an estimate, then base my estimate on $20.00 per hour. Complicating this operation is the fact that at least half of the time I'm doing this on the phone with a potential client out of state who has limited time to talk. Clearly this is not an ideal situation, but as I stated in one of my earlier posts, since I don't know how many hours I'll need to do the job until I get the account, I'm left to guess, so the choices are: A. Come in with a lower bid, get the account and raise my price later once things are running smoothly or B. Run a big risk of losing the account from the start.   

Q: Do you keep a work log of how many hours you are spending on each account in a month?

A: No, and this is something I need to start doing straight away. The last few years have been a struggle to get my business running, and to establish a stable client base. Now that I've done this, it's time to start learning how to price things correctly.

Michele - I cannot thank you enough for the helpful advice you've given me here!

PMRNC

  • Hero Member
  • *****
  • Posts: 4562
    • One Stop Resources & Networking for Medical Billers
Re: Income Expectations
« Reply #3 on: June 16, 2019, 10:37:20 AM »
It's really hard to say without really digging in. Here are some things I do that might help.

I use ACT and have database setup with all clients. In each one resides my signed contract, emails (no phi) BA agreement, etc etc. There is also a timer and log feature. When i start work each day for any one client i hit that timer, I'm in the habit now of stopping it whenever i stop. Once monthly I run reports and make sure I'm on target with contract. Because my flat monthly fee is based on time I watch to see I'm not going over so I'm not working for free ;)

2. Make sure if you have any expenses you add them in, if it's  phone fax, etc you should be charging each client a piece of that by use. Of course you add only the expenses used on that client and not costs associated with the cost of doing business.

3. Scrutinize your time.. as business owners we are always going that extra mile, which is ok, but it's real easy to go way over that one mile, maybe your spending more time on a particular client? That's why I run my time reports monthly.

4. How are you basing your fees? Mine are based on hourly rate, I don't have any clients under $35 an hour but not all of them are same. I have one practice at $55 another at $45  It varies based upon their staff, specialty, etc. Some specialties have a lot more time driven services. The only ones I would go the $35 an hour, as an example, are my mental health, solo providers, non MD.

Because my flat fee is based hourly I can adjust my time down if I need to and it does happen that I'll find myself working a few extra hours I don't need to work. If I find I DO need those extra hours it's time to increase fees. My flat fee model includes a sliding scale for practice growth but for some providers it might need adjusting up and sometimes down.

I think the key to this business model is being disciplined in your work days. Create a system to track and log your time for a few months and you are sure to find tweaks you can make.
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

williamportor

  • Full Member
  • ***
  • Posts: 233
Re: Income Expectations
« Reply #4 on: June 16, 2019, 11:05:29 PM »
It's really hard to say without really digging in. Here are some things I do that might help.

I use ACT and have database setup with all clients. In each one resides my signed contract, emails (no phi) BA agreement, etc etc. There is also a timer and log feature. When i start work each day for any one client i hit that timer, I'm in the habit now of stopping it whenever i stop. Once monthly I run reports and make sure I'm on target with contract. Because my flat monthly fee is based on time I watch to see I'm not going over so I'm not working for free ;)

2. Make sure if you have any expenses you add them in, if it's  phone fax, etc you should be charging each client a piece of that by use. Of course you add only the expenses used on that client and not costs associated with the cost of doing business.

3. Scrutinize your time.. as business owners we are always going that extra mile, which is ok, but it's real easy to go way over that one mile, maybe your spending more time on a particular client? That's why I run my time reports monthly.

4. How are you basing your fees? Mine are based on hourly rate, I don't have any clients under $35 an hour but not all of them are same. I have one practice at $55 another at $45  It varies based upon their staff, specialty, etc. Some specialties have a lot more time driven services. The only ones I would go the $35 an hour, as an example, are my mental health, solo providers, non MD.

Because my flat fee is based hourly I can adjust my time down if I need to and it does happen that I'll find myself working a few extra hours I don't need to work. If I find I DO need those extra hours it's time to increase fees. My flat fee model includes a sliding scale for practice growth but for some providers it might need adjusting up and sometimes down.

I think the key to this business model is being disciplined in your work days. Create a system to track and log your time for a few months and you are sure to find tweaks you can make.


Thank You PMRNC - Clearly I'm undercharging by quite a bit! Using a timer, and bill my clients based on $$/hr spent of their accounts is the way to go. If you have any idea how I can find a timer, I'm really interested!

OMG - I had no idea I could charge that much! You've made me really happy!  ;D 

PMRNC

  • Hero Member
  • *****
  • Posts: 4562
    • One Stop Resources & Networking for Medical Billers
Re: Income Expectations
« Reply #5 on: June 17, 2019, 08:12:12 AM »
Quote
OMG - I had no idea I could charge that much! You've made me really happy!  ;D

This is one of reasons I only base the flat fee on the hourly and the client doesn't see it. Providers will see $45 or $50 an hour and may initially be put off. Think of it this way. Your goal is to obtain clients and show them savings in hiring an outsourced solution right? Most practices need one or more billers and or additional hands for full support of the billing process in their offices. You'll base your hourly rate on perceived value and workload. A solo mental health professional may be a smaller hourly rate of $35 an hour, but they won't need any billing staff, maybe only someone to do scheduling and/or reception duties. You are still saving them money. Likewise a practice of three providers may need 2-3 billers in the office making let's say $12 an hour, payroll taxes, benefits, sick pay, etc. If you went in at $55 an hour they will still be seeing a significant savings. Next, you need a sliding scale to accommodate the practice growth. To do this using the model I do, determine how many claims on the average you can comfortably do in one hour. That will be your sliding scale. For example, if you can do 10 claims in an hour and my hourly rate your basing that flat rate is $55, your sliding scale would be for every new 10 patients, the flat fee is adjusted up $55. This looks like this:

You average 50 hours weekly at $55 an hour (client does not see)

50 X $55 = $2750.00 per month.  + Add expenses = Total Monthly Flat fee   For every 10 new patients the monthly total is increased by $55.

Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

Michele

  • Global Moderator
  • Hero Member
  • *****
  • Posts: 5846
    • Solutions Medical Billing
Re: Income Expectations
« Reply #6 on: June 17, 2019, 09:52:53 AM »
I agree with Linda.  $20 per hour is too low.  You have to remember that when you are paid by an employer they have a tax burden that when you are self employed falls onto you.  So $20 for someone else has to be at least $26.  There are also so many other things that have to be considered so $20 or even $26 is really low.  That is also why I would also never let the client know the rate you use determining the flat fee.  They would only look at that number and think "I can hire somebody in the office for way less!"  But they are paying for your expertise as well as many other things like supplies, ink, printing costs, electricity, computer, cost of having a person in the building basically.  ALL of that must be considered!  Don't sell yourself short...............or cheap!
Sign Up for our FREE Medical Billing Newsletter
Get a 10% discount on Medical Billing Products by using Coupon Code: 10OFF
http://www.solutions-medical-billing.com

Medical Billing Forum

Re: Income Expectations
« Reply #6 on: June 17, 2019, 09:52:53 AM »