Everything comes at a price, including medical billing.
Many healthcare providers resist medical billing because they assume it is too costly for their practice. Others put off shopping for a new provider because they are concerned that a new service will put a bigger dent in their bottom line.
But at the end of the day, the majority of medical practices and healthcare facilities achieve a net gain by utilizing a quality healthcare billing service company. Why? Because the added expertise and focus a billing service vendor brings to the practice translates into improved claim acceptance, increased collection rates and faster turnaround times.
Still, you'll need to make sure you're getting the best possible return on your investment. Direct cost comparisons can be tricky because vendors bring different strengths to the table and sometimes offer variable pricing plans. Here's the information you need to properly analyze medical billing service costs and make an informed purchasing decision.
Medical Billing Service Pricing Methods
The decision to hire an outsourced healthcare billing service should be a low (or no) investment/low commitment proposition. Although it is sometimes necessary to upgrade hardware/software or pay an initial start up fee, the majority of the cost is incurred the monthly fees. These fees are based on a percentage of the funds the vendor collects for your practice.
But a lower fee percentage doesn't always translate into the best deal. Vendors with higher collection rates can charge a slightly higher percentage and still come in as the lowest cost option when you consider the additional income they bring into the practice.
Most billing providers charge 4% to 8% of collected amounts, with the industry average falling in the 5% to 6% range. Factors that determine percentage pricing include the size and value of claims, additional services, turnaround time and vendor support/responsiveness.
Medical Billing Service Cost Management
The easiest way to reduce the cost of medical billing is to limit the services you receive from the vendor. By accurately assessing your requirements, you can avoid paying for unnecessary features. Short-term (30 to 60 day contracts) are common, but these may require some initial fees. You can avoid those fees by locking into a long-term (1 to 3 year) contract. Before you commit to a long-term relationship with a medical billing services company, it's a good idea to evaluate their performance in an initial short-term arrangement.