| Medical Insurance Billing - Selecting The Right Pricing Agreement |
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| Written by Daljeet Sidhu |
| Tuesday, 10 August 2010 12:37 |
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Medical billing services offer multiple options for practices to pay for their services. Each practice has diverse requirements and the right choice for you is based on the volume, kind, and dollar amount of claims. Following is a list of the billing alternatives available to health care offices, with their minus and plus points.
Medical billing services offer a number of alternatives for clients to pay for their services. Each practice has diverse requirements and the correct option for you depends on the volume, kind, and dollar amount of claims. Following is a list of the billing choices available to medical offices, with their benefits and drawbacks. 1. Percentage based fee This is the most frequent type of billing option offered by medical billing services. You pay a proportion of the net amount received or of the total claims submitted to the insurer. Percentage rates range widely (4%-16%) as they are calculated on the services included in the contract, claim amount and monthly average count of claims. Percentage based contracts are suitable for almost all healthcare practices, especially if you turn over the whole process to the medical billing service . This method of billing provides motivation to the billing service to maximize collections - an excellent benefit for the customer. The one disadvantage of percentage based fee is that the billing service may pay less attention to smaller claims as the small payments do not justify the vigorous follow up necessary to collect. A good option is to pay a marginally higher percentage for the smaller claims to make them worth the effort. 2. Flat fee per claim The medical billing service charges a flat rate for each submitted claim. The charge could range from $1 to $8 based on the service. This choice works well for medical practices that see high value but low count of claims or claims that are difficult to collect (as from a particular payer). 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 include follow up in the agreement and make the payment after the claim has been collected. 3. Hybrid Billing Hybrid billing is a good combination of percentage and flat fee service. In a hybrid billing option, pricing stipulations are specific to the category of claim and the insurance carriers. This kind of billing contract is appropriate for any hospital that sees varying claim values and a moderate to high level of claims. This also enables health care practices conform to the fixed fee rules stipulated for Medicaid and Medicare claims in many states. The percentage-based fee structure is applied for private insurance claims. The main disadvantage of hybrid billing is that it introduces billing complexity into practices that do not have a large volume of claims. Before selecting the price structure you want with the medical billing service, go over your claims volume, value of claims, and the type of payers. Ask the billing service to forecast results based on monthly average volume of claims, amount of claims and payers so that you can estimate what you would pay under each category of billing option. Consider the future growth of your practice before selecting the optimal payment contract. There is a perfect medical biller for each kind of practice; you just need to spend some time understanding how they work before you make a decision. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Daljeet Sidhu is at TradeSeam. Medical Billing Services blog. Medical Billing quote. |