Healthcare Billing Services: Percentage Against. Flat Fee Pricing Structures


As Medical Billing Specialist of running a good medical training gets whole lot more competitive, a lot of practices are turning to a new thirdparty medical billing service for cost effective remedies to keep maximum success. In evaluating any medical billing services agreement there is a great array of elements that should be taken into consideration – charges involving services is primary between them. This article analyzes the 2 main most common prices approaches offered by medical records services rapid Percentage Based Agreements plus Flat Cost per Claim – in addition to identifies some of crucial points to remember as soon as picking out a medical billing support provider.

Fraction Based Deals:

Probably the most typical approach to pricing by simply skilled billing services is definitely the portion based contract. In this type of arrangement, the medical payment service’s fees to the procedure are based on a new percentage, typically a single variety or even another of the pursuing:

Percentage of selections,
Fraction of gross statements submitted by the billing assistance,
Percentage of total choices for the overall procedure.
While using first type above, fraction of selections, the particular medical billing company rates the practice only on net got for individuals claims in which it includes directly assisted in selections (typically not including monies obtained at the office, many of these as co-pays, deductibles, and so on. ). This is typically the purest illustration of the way a proportion based understanding will link the clinical billing service’s success in order to the practice although safely limiting this fot it which in turn they have some big capacity to affect. This kind of type of proportion structured deal benefits typically the process by simply its “self-policing” quality- the medical payments support only makes money as soon as the practice makes money.
Within our next type, proportion of low claims posted by the billing support, the practice is usually billed a percentage of the particular complete amount submitted to insurance companies and different payers. This is tricky for a pair of reasons. Very first, the price billed to an insurance provider is not always this same as the discussed rate that will turn out to be paid. Consequently a seemingly competitive percent from one medical billing service can certainly be drastically different from one more medical billing services based on where the proportion is applied. Second, a few of the motivation mentioned above is removed for check in on claims as there is no tie-in to the results of medical billing service’s submissions.

With the percent of the overall selections for the overall training, the billing service rates for the total net obtained by the process. It includes co-pays, deductibles, and any various other charges collected at the business, not simply by the assistance. This specific arrangement is virtually all commonly discovered with full-scale practice supervision companies who else not only manage skilled billing but might also give head hunter, scheduling, advertising and marketing, payment schedule negotiations, etc . Around this arrangement, the medical billing service can get driven by incentive to comply with up on claims with payers, but profits some protection to their revenues through the other solutions of payment entering typically the practice.

Rate Variability within Percentage Agreements:

A new health care billing company is going to consider several variables in defining the rate charged to the practice in a proportion centered understanding. Rates can easily range via as minor as 4% to up to 14% or even 16%! Variables influencing this variability incorporate claim volume plus average dollar amount connected with claims, in addition to service issues to consider like level of follow back up executed by the medical billing company, whether or even not really patient invoices will probably be sent by the payment organization, and many others. Let’s have a look at some good examples of how these specifics influence medical billing support rates.


With regards to claim volume and dollar amount, let’s consider the illustration of practice A in addition to procedure B. Both happen to be looking for a clinical billing service offering case generation, carrier follow upward, patient invoicing and mobile phone help support. The average declare for process A is $1000 and so they average regarding 100 persistent encounters every month. Practice N possesses an average claim associated with $100 with 1000 runs into per month. Although typically the uncouth amount billed is the similar, the difference is staggering for any accounts receivable company who also will likely need to task nearly 10 times the staff hours for practice B to yield the same exact go back as from practice A new.


With respect to companies presented, let’s consider practice M and practice D. Equally practices average all around a thousand claims per thirty day period, and each claim averages around $265.21. Now, practice C wants to get into a billing service in order to take care of complete claim lifecycle management- carrier follow upward, submission for you to secondary together with tertiary insurance coverages, patient invoicing and assistance, report evaluation, etc. Practice D gathers patient bills at the particular office so they may require invoicing services, plus they plan on performing the carrier follow upwards on their own. Thus Practice D only requires the health care records service generate together with post initial claims for you to carriers, and perhaps publish some sort of few secondary statements each month. In this illustration, the gross claims downloaded is definitely roughly the same, but exercise C may well anticipate a fee significantly higher – potentially double of which of practice G instructions due to the extensive function involved in delivering these other support expert services. (Keep on your mind practice N will also need to take into account additional staffing to conduct these activities private, which will most likely not necessarily counteract the cost regarding allowing the health-related payments company to deal with often the process. )

These a pair of illustrations clearly demonstrate the particular basic elements that affect the rates when it comes to portion based medical accounts receivable providers. While there are numerous fighting points where a practice can help on basic costs, they should consider precisely what other costs might come up later to manage the assistance not provided simply by this medical billing company.


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