Medical Billing Services: Percentage Vs. Flat Fee Pricing Structures

As the company of running some sort of medical procedure becomes considerably more competitive, quite a few practices happen to be turning to some sort of third-party medical billing program regarding cost effective treatments to keep maximum profitability. In assessing any medical billing services agreement there is an array of variables that will should be taken directly into consideration – pricing associated with services is fundamental among them. This article compares the 2 main most common rates approaches proposed by medical records services – Percentage Based Agreements and even Flat Payment per Claim : and identifies some of significant points to remember any time selecting a medical billing support provider.

Percentage Based Agreements:

Probably the most frequent approach to pricing by means of medical billing services can be the proportion based contract. In this type of understanding, the medical accounts receivable service’s fees to the procedure are based on a new percentage, generally within a variety or perhaps another on the adhering to:

Percentage of collection agencies,
Proportion of gross claims developed by the billing program,
Percentage of total choices for the overall training.
Using the first type given here, percent of collections, often the medical related billing company costs often the practice only about net acquired for these claims in which it includes directly assisted in choices (typically eliminating monies compiled at the office, some as co-pays, deductibles, and many others. ). This is the particular most natural example of this of just how a portion based understanding will connect the professional medical billing service’s success to help the practice although carefully limiting it to that particular which usually they have some measurable power to affect. This type of percent established contract benefits the exercise by means of its “self-policing” quality- the medical accounts receivable assistance only makes money as soon as the practice makes money.
Throughout our 2nd type, fraction of gross claims posted by the payment program, the practice is definitely incurred a percentage of often the complete amount submitted to help insurance providers and various other payers. This is often tricky for a couple of reasons. Very first, the rate billed to an insurance carrier is not always the same as the agreed rate that will be paid. Consequently a seemingly competitive proportion from a person medical billing services can certainly be drastically different via a further medical billing service determined by where the proportion is utilized. Second, a few of the inducement mentioned previously is removed for follow-up on claims as you cannot find any tie-in to the results of professional medical billing service’s submissions.

Along with a new percent of the overall collections for the overall procedure, the billing service rates for the total world wide web obtained by the practice. It includes co-pays, deductibles, and any other funds collected at the workplace, not simply by simply the service. That design is virtually all commonly identified with full-scale practice supervision companies who also not only manage skilled billing nevertheless might also administer staffing needs, scheduling, advertising and marketing, charge schedule negotiations, and so forth Within this arrangement, the medical billing service can be motivated by incentive to comply with up on states with payers, but benefits some security to it has the income with the other options of payment getting into typically the practice.

Rate Variability within just Percentage Agreements:

A new health care billing company may look at several variables around major the rate charged towards the practice in a percent based arrangement. Rates can certainly range through as minor as 4% to all the way to 14% or even 16%! Variables influencing this variability include things like claim volume in addition to normal dollar amount regarding claims, and service issues to consider like amount of follow up carried out by the medical related billing company, whether or maybe certainly not patient invoices will probably be sent by the payments organization, and many some others. Let’s look into some illustrations of how these variables influence medical billing services rates.


About claim volume and dollar amount, let’s consider the instance involving practice A and even process B. Both are usually looking for a medical related billing service offering case generation, carrier follow right up, individual invoicing and mobile phone help support. The average assert for exercise A will be $1000 plus they average associated with 100 individual encounters every month. Practice B offers an average claim of $100 with 1000 encounters per month. Although this gross amount billed can be the exact same, the variation is staggering for any payments company who will likely need to venture nearly 10 times employees hours for practice N to yield the same return as from process Some sort of.


With respect to expert services presented, let’s consider practice M and practice D. The two practices average all around a thousand claims per month, and claim averages around hundred buck. Now, practice C is looking to get a billing service for you to cope with complete claim lifecycle management- carrier follow way up, submission for you to secondary in addition to tertiary insurance coverages, patient invoicing and assistance, report examination, etc. Practice D gathers patient bills at often the office so they may require invoicing services, together with they plan on carrying out the carrier follow way up themselves. Thus Practice M merely requires the health care payments service generate plus send initial claims to help carriers, and perhaps publish a good few secondary claims each month. In Medical Billing Services , the gross claims published is usually roughly the same exact, but training C may anticipate fees significantly larger – likely double that of practice Deb – due to the comprehensive work involved in giving these different support expert services. (Keep as the primary goal practice N will also must think of additional staffing to help carry out these activities private, which will will most likely not balance out the cost involving allowing the health-related accounts receivable company to control the particular process. )

These 2 cases clearly display the particular basic elements that impact the rates when contemplating portion based medical billing providers. While there are several talking points where a good practice conserve on standard costs, they must consider precisely what other costs may possibly come up later to manage the services not provided simply by the particular medical billing company.

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