Medical Claims Billing – Picking The Optimal Pricing Option
Medical billing services offer a number of options for practitioners to pay for their services. Each practice has varying needs and the correct selection for you is based on the volume, kind, and value of bills. Following are some of the billing choices available to medical offices, with their minus and plus points.
1. Percentage based fee
This is the most common type of billing option offered by medical billing services. You pay a fraction of the net amount received or of the gross claims submitted to the insurer. Percentage rates range widely (4%-16%) as they depend on the services included in the agreement, claim amount and monthly average number of claims. Percentage based agreements fit most healthcare practices, especially if the medical billing service deals with all the jobs connected to billing. This method of billing provides motivation to the billing service to maximize collections – an excellent advantage for the customer. The one downside of percentage based pricing is that the billing service could possibly neglect smaller claims as the small sums do not justify the vigorous follow up necessary to collect. You can circumvent this hurdle by paying a somewhat higher percentage for the smaller claims to motivate the service to collect on them.
2. Flat fee per claim
The medical billing service charges a fixed rate for each submitted claim. The amount can vary from $1 to $8 depending on the service. This alternative 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 drawback of this arrangement is that the billing service does not have much motivation to pursue 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 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 kind of billing arrangement works best for any practice that has varying claim amounts and a moderate to high level of claims. This also helps medical practices conform to the fixed fee regulations set for Medicaid and Medicare claims in some states. The percentage-based fee structure is applied for private insurance claims. The main drawback of hybrid billing is that it introduces billing complexity into practices that do not have a large volume of claims.
Before deciding on the price structure you want with the medical billing service, assess your claims volume, amount of claims, and the type of patients and insurers. Ask the billing company to project results based on your volume, sum of claims and payers so that you can estimate the amount you would pay under each kind of billing agreement. Think in terms of the potential growth of your practice before selecting the best possible payment agreement. There is a perfect medical biller for every type of practice; you just need to spend some time understanding how they work before you make a decision. Daljeet Sidhu is the author of this article.
