Understanding what is a reasonable amount to pay for medical billing services is an important starting point for pricing out and comparing these types of services. The actual amount billed is going to depend on a wide range of factors. The service offerings included from the medical billing company, the size of your practice, and the features that you opt for will all influence these numbers. However, these general guidelines should provide you with a starting point for assessing the fees that may be charged by your potential medical billing services.
Medical Billing Administrative Fees
The overall fees charged for administration by a billing service will typically add up to several thousand dollars a year. A good average is to assume $3,500 to $6,000 in administrative fees depending on the size of your practice. This information is offered upfront and is generally very transparent.
Many of the companies in this industry also charge start-up fees when you first start utilizing their services. A normal amount here is roughly $300 per practicing doctor in an organization, although for larger practices billing services will typically cap this after a certain number of practitioners. In other cases, there may be a general start-up fee that is charged regardless of the number of physicians in the practice. In these cases, an amount of $1,000 to $1,500 would be expected. Learn More about how medical service bills are calculated.
Fees to Avoid
Here’s a list of fees to try to avoid paying for when picking a medical billing service.
• Up-gradation charges
• Post-sale customer support expenses
• Avoid hidden costs buried in the contract
Extra Fees For EHR / EMR
Another thing to keep an eye on is the wide-ranging additional fees that different companies may tack onto your regular bills. For instance, some companies charge as much as $99 in clearinghouse fees, while others charge for each statement they send to a patient. It is important to get all these fees clearly laid out beforehand. While they might seem like a very small amount in isolation, over the course of a month with a large number of patients these fees can quickly mount.
Monthly Minimums For Medical Billing Services
Another consideration when pricing out these types of services is what types of monthly minimums they might charge. This is particularly important for people working in very small or independent practices where these monthly minimums might not be met in the course of normal billings, in which case the remainder would be tacked on to the top of the existing invoice.
While the fees and numbers listed above should give you some idea of what to expect when it comes to your medical billing service’s fees, ultimately most companies are going to charge you a percentage based on the billings that you outsource to them. In most cases, this number will range somewhere between 3% and 10%, with most falling more in the 5% to 7% range. Companies that are at the extreme ends of this range may have a reason for their deviation from the mean: either they offer a bare-bones, stripped-down service, or they have some huge value-adds that are worth considering. If a company bills at the low or high end of this range without meeting either of these criteria, it is certainly worth doing some further research into their model to see why it deviates from the norm.