Medical Billing and Coding – Selecting the Most Suitable Pricing Alternative
By daljeetsidhu at 13 August, 2010, 12:00 am
Medical billing services offer multiple alternatives for clients to pay for their services. Each practice has different requirements and the appropriate choice for you depends on the volume, kind, and value of bills. Following are some of the billing options available to medical practices, with their positive and negative.
1. Percentage based fee
This is the most common kind of billing option offered by medical billing services. You pay a fraction of the net collections or of the total claims submitted to the covering agency. Percentage rates vary from four percent to sixteen percent as they depend on the type of services provided, claim amount and volume of claims. Percentage based agreements are suitable for most healthcare practices, especially if you turn over the whole operation to the medical billing service . This method of billing provides an incentive to the billing service to submit and follow up claims rigorously – a great benefit for the client. The one disadvantage of percentage based fee is that the billing service may pay less attention to smaller claims as the small sums do not justify the aggressive follow up needed to collect. You can circumvent this obstacle by paying a somewhat higher percentage for the smaller claims to make them worth the effort.
2. Flat fee per claim
You pay a predetermined rate for each submitted claim. The amount could range from $1 to $8 depending on the service. This choice is appropriate for medical practices that see high value but low number of claims or claims that are hard to collect (as from a particular insurer). The downside of this agreement is that the billing service does not have much incentive to follow up the claims aggressively. This service is effective only if you stipulate follow up in the agreement and make the payment after the claim has been paid.
3. Hybrid Billing
Hybrid billing is a good choice to get the best of both percentage and flat fee service. In a hybrid agreement, pricing provisos are specific to the category of claim and the insurance carriers. This form of billing contract is fitting for any hospital that sees a wide range of claim values and a moderate to high level of claims. This also helps health care practices conform to the fixed fee regulations set for Medicaid and Medicare claims in many states. The percentage-based fee is used to pay for private insurance claims. The main problem of hybrid billing is that it introduces billing complexity into practices that do not have a large volume of claims.
Before deciding on the price structure you want with the medical billing service, assess your claims volume, value of claims, and the type of payers. Ask the billing corporation to project results based on your volume, sum of claims and payers so that you can estimate what you would pay under every type of billing contract. Consider the potential growth of your practice before selecting the optimal payment agreement. There is a medical billing service out there for every type of practice; it is just a matter of learning the ropes and making an informed decision in hiring the right service for your practice.
Daljeet Sidhu. Medical Billing Services blog. Medical Billing quote. Buy Business leads.
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