subject: Medical Billing - Picking The Right Fees Option [print this page] Medical billing services offer myriad options to compensate them for their services. Every practice has diverse requirements and the correct option for you is dependent on the volume, type, and value of claims. Following is a list of the billing choices available to medical practices, with their pros and cons.
1. Percentage based fee
This is the most common kind of billing option offered by medical billing services. You pay a proportion of the net collections or of the gross claims submitted to the insurer. Percentage rates range widely (4%-16%) as they are calculated on the services included in the contract, claim value and monthly average number of claims. Percentage based agreements are appropriate for most healthcare practices, especially if you turn over the whole process to the medical billing service . This method of charging provides motivation to the billing service to maximize collections - an excellent advantage for the customer. The only disadvantage of percentage based pricing is that the billing service could possibly neglect smaller claims as the small payments do not justify the aggressive follow up necessary to collect. You can circumvent this problem by paying a somewhat higher percentage for the smaller claims to make them worth the effort.
2. Flat fee per claim
The medical billing service charges a predetermined rate for each submitted claim. The charge could range from $1 to $8 based on the service. This alternative is appropriate for medical practices that see high value but low number of claims or claims that are tough to collect (as from a particular payer). The disadvantage of this agreement is that the billing service does not have much incentive to follow up the claims aggressively. You should accept this alternative only if you demand follow up in the contract and release the fees after the claim has been paid.
3. Hybrid Billing
Hybrid billing is a good option to get the best of both percentage and flat fee service. In a hybrid option, pricing stipulations are defined based on the type of claim and the insurance carriers. This sort of billing arrangement is appropriate for any hospital that has 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 major problem of hybrid billing is that it introduces billing complexity into practices with low volume of claims.
Before selecting the billing option you want with the medical billing service, go over your billing volume, amount of claims, and the kind of patients and insurers. Ask the billing company to project results based on your volume, amount of claims and payers so that you have some idea of what you would pay under each kind of billing agreement. Think in terms of the potential growth of your practice before you choose the best possible payment contract. There is a medical billing service out there for each kind of practice; it is just a matter of educating yourself and making an informed decision in hiring the right service for your practice.
