As the process of managing a medical practice gets to be more competitive, many practices are embracing another-party medical billing service for economical methods to maintain maximum profitability. In evaluating any medical billing service agreement there’s a range of factors which should be considered – prices of services is principal included in this. This short article compares two of the most common prices approaches provided by medical billing services – Percentage Based Contracts and Flat Rate per Claim – and identifies a number of details to keep in mind when choosing a clinical billing company.
Percentage Based Contracts:
Most likely the most typical method of prices by medical billing services may be the percentage based agreement. In this kind of agreement, the medical billing service’s charges towards the practice derive from a portion, usually in a single form or any other from the following:
Number of collections,
Number of gross claims posted through the billing service,
Number of total collections for that overall practice.
Using the first type above, number of collections, the medical billing company charges the practice only on internet received for individuals claims that has directly aided in collections (typically excluding monies collected in the office, for example co-pays, deductibles, etc.). This is actually the purest illustration of the way a percentage based agreement will tie the medical billing service’s success towards the practice while securely restricting it to that particular that they possess some measurable capability to affect. This kind of percentage based agreement benefits the practice by its “self-policing” quality- the medical billing service only earns money once the practice earns money.
Within our second type, number of gross claims posted through the billing service, the practice is billed a portion of the quantity posted to insurance providers along with other payers. This is often tricky for 2 reasons. First, the speed billed to an insurer isn’t necessarily identical to the negotiated rate that’ll be compensated. So a apparently competitive percentage in one medical billing service could be drastically not the same as another medical billing service based on in which the percentage is used. Second, a few of the incentive pointed out above is taken away for follow-up on claims as there’s no tie-to the outcomes of medical billing service’s submissions.
Having a number of the entire collections for that overall practice, the billing service charges for that total internet received through the practice. It offers co-pays, deductibles, and then any other monies collected in the office, not merely by the service. This arrangement is most generally found with full-scale practice management companies who not just handle medical billing but can also administer staffing, scheduling, marketing, fee schedule negotiations, etc. Within this arrangement, the medical billing service could be driven by incentive to follow-up on claims with payers, but gains some protection to the revenues with the other causes of payment entering the practice.
Rate Variability within Percentage Contracts:
A clinical billing company will consider several variables in defining the speed billed towards the practice inside a percentage based agreement. Rates can vary from less than 4% up to 14% or perhaps 16%! Factors influencing this variability include claim volume and average amount of money of claims, in addition to service factors like degree of follow-up done by the medical billing company, whether patient invoices is going to be sent through the billing company, and many more. Let us check out a few examples of methods these variables influence medical billing service rates.