The financial performance of your health care facility is impacted greatly by medical billing, patient accounting, and account receivable management. Great organisation is important in maintaining clear records and keeping patient confidence high. Medical billing services handle the day-to-day accounts receivables functions to alleviate these concerns and let you do what you do best, treat patients.
This guide will help you, as a patient; navigate the medical billing process from the moment you contact a healthcare provider about an appointment until after you receive your bill in the mail. We discuss how healthcare providers determine costs and negotiate charges with your insurance provider. Finally, we show you how to identify and dispute erroneous charges on your bill.
Let us discuss these concerns and try to make it easier in understanding this model of pricing:
- Percentage pricing model:The percentage pricing model is also called the ‘success fee’ model, since the outsourcing company gets paid for its services based on successful collections. The percentage pricing model is a ‘win-win’ situation, since the outsourcing company gets paid only based on the collections. So the onus for doing everything possible to increase the collections of a Practice or Medical Group rests with the Outsourcing Company. The collections that are included for the percentage calculations will typically be the Gross collections that include both payments from the Payers, Patients and Self-pay category.
- Scope of services covered:The biggest disconnect with the Percentage pricing model occurs while understanding what all Services are included. Typically all the Revenue cycle services will be included that include – Demographic entry (if applicable), Coding (if Providers do not code), Charge Entry, Claims transmission, Handling the Transmission rejections, Payment Posting, AR follow-up and Denial Management. Sometimes, Credentialing, Insurance Benefit Verification and/or Patient calling can also be included for a slightly higher fee.
One of the reasons why the Percentage fee is always customised and there are no standard rate cards, is due to this customisation that is possible, along with variations in Specialities, Collections, Software etc.
- Benefits: There are many benefits associated with the ‘success fee’ model. The primary one being, payment based on performance only. The other benefit is that the medical billing and collections are now handled by professionals who have the singular mission of improving the Collections for the Practice/Medical Group, as their fee is dependent on it. This eliminates wastage, improves efficiency and faster cash flows
Medical Billing Service Average Costs:
- Most of the medical billing companies charge a percentage of collections. Typical rates are between 5% to 10%, although it is possible for rates to be 4% to 15%. This is a major earning incentive that will make you more money. They don’t get paid unless you get paid.
- Some services or speciality billing services (i.e. Medicaid/Medicare specialists or other compensation specialists) charge a flat fee, per claim. Fees range from$1 to $8. A typical practice often pays $4 to $6, per claim. Make sure to find out if the cost of submitting inpatient and outpatient claims is separate.
Cost of service can be a deceiving and is, ultimately, not the only way to select a billing company. A service may demand a higher percentage of profits. However, their performance will often boost your total collections. The resulting increased revenue may quickly account for the difference of paying that slightly higher rate.