How Much Does a Medical Billing Service Cost in 2020?
Is it time for you to outsource your medical billing to a medical billing service? Do a price comparison with this guide to the cost of these services.
On average, $125 billion is lost each year due to denied billing claims. Whether it’s claims with the wrong codes or missed due dates for bills, physicians miss out on large chunks of revenue. This loss of revenue increases when you consider the number of unpaid patient bills due to lack of time.
Many offices rely on a medical billing service to combat this problem. Others remain unsure if the increased revenue outweighs the cost of a billing service though. So, how much does a medical billing service cost these days?
The answer to this question depends on many variables. You can still get an idea of the costs you can expect though.
The Medical Billing Process
The medical billing process starts with the original patient visit. The practitioner must determine what insurance will cover and what codes to use. A bill goes to the patient to cover the remaining costs.
To ensure payment, you have to determine the correct codes to use during the billing process. To keep up with insurance payments you need a full-time staff to follow-up on any denied claims.
You also need to make sure that all claims get filed on time. Then, you rely on the patient to pay the remainder of the bill. That means your staff spends time following up on patients to get that payment.
Outsourced Billing Services
If you don’t have the staff to follow-up on these payments, it’s time to consider medical billing services. Depending on the service provider you choose, you can find help with
- Filing Bills
- Follow-up with patients
- Follow-up on denied claims
- Advice on better filing processes
But, how much do these services cost? This will depend on the size and type of practice you run.
How Much Does a Medical Billing Service Cost?
To determine how much billing services cost, you need to consider set-up fees, administrative fees, and billing fees. These prices will vary depending on the volume and types of claims. This also depends on the size and scope of practice.
Some billing service companies require no fees for a new client. Others will charge a start-up fee to cover some of the costs of taking on a new client.
For companies that charge this fee, you can expect it to cost an average of $300 per physician. For offices with a large number of physicians, many companies will charge a flat fee starting at $1,000 per office.
Every billing service company will charge administrative fees. This covers the cost of software upkeep and some of the costs involved in the services offered.
Administrative fees are an upfront yearly cost. These fees range from $3,000 to $6,000. This cost depends on the size of your firm and the number of patients seen.
Once set-up and administrative fees are covered, you need to determine how much the actual billing process costs. This cost gets billed in several ways, depending on the size of your company.
A billing service can increase collected claims by at least 10%. Keep this in mind when considering the billing fees.
For larger offices, many billing companies charge a percentage-based fee for each claim. This option increases the chance they’ll aggressively follow-up on denied claims. They only get paid if you do.
The percentage gets calculated by dividing the cost of services by the amount they expect to collect within the contract period. Contracts can go on a monthly or yearly basis. This amount averages at 5-10% of collections.
A medium-sized office does better with a flat fee per claim. This averages $4-$6 per claim, but this price will vary. For every claim collection, you’re charged this fee.
The flat fee decreases the chance the company will follow up on denied claims. It does increase their willingness to pay attention to all claims, no matter how small.
A smaller office might get billed an hourly fee. This is a set price placed on the amount of time spent on the claims filed.
This fee will work out to a similar amount you would spend on an in-house billing specialist. The difference is, you won’t have to pay a full-time employee.
Some billing companies will charge fees both as a percentage and flat fee depending on the claims. This billing process is a hybrid fee and will get worked out at the time you complete a contract.
The optimal customer for a billing company is a large office with in-state offices and regular claims using similar codes. If you have several offices in different states, or specialists in-house this can increase the costs of billing services. The use of specialized codes requires more time and cost, and that cost will come back on you.
You also need to consider your patient demographics. For instance, Medicare/Medicaid patients usually mean smaller claims and this will affect the fees you pay for services.
You also want to check the services offered by the billing company. Higher percentage rates could mean extra services, but make sure that’s the case. Also, check whether the fee percentages include co-pays.
Know what support they offer. Do they do coding for you? Do they provide financial reports? Know what you’re paying for.
Fees to Watch Out For
The set-up, administrative, and billing fees are the common fees for any billing company. If they charge you other fees, check these carefully. You shouldn’t need to pay for customer support or other hidden fees.
You should also watch out for clearinghouse fees. You should only pay the fees for each claim filed.
Pay attention to any mention of monthly minimums. If you run a small office, you may have to pay extra if you don’t meet a monthly quota of claims filed which can add up quickly.
Comparing Medical Billing Service Costs
When you consider the cost of hiring a full-time billing staff, the cost of a medical billing service often costs less. You can save thousands of dollars while increasing your claimed revenue if you pick the right billing company.
Are you ready to learn more about your billing options? Compare quotes now to find the right company for your needs.
Author: Mike Cynar
Mike Cynar brings buyers and sellers together by producing reviews and creating non biased webpages allowing users to share their experiences on various products and services. He and his staff write informative articles related to the medical field, legal, and other small business industries.