Medical Insurance Billing – Selecting The Ideal Fees Option
Medical billing services offer a number of options for practices to pay for their services. Each practice has varying requirements and the correct option for you depends on the volume, type, and dollar amount of bills. Following is a list of the billing alternatives available to health care offices, with their advantages and disadvantages.
1. Percentage based fee
This is the most widespread type of billing option offered by medical billing services. You pay a proportion of the net amount received or of the total claims submitted to the payer. Percentage rates range widely (4%-16%) as they depend on the services included in the agreement, claim value and monthly average number of claims. Percentage based contracts work well for most healthcare practices, especially if you turn over the entire operation to the medical billing service . This method of charging provides an incentive to the billing service to maximize collections – a great advantage for the customer. The one downside of percentage based pricing is that the billing service may pay less attention to smaller claims as the small sums do not justify the aggressive follow up needed to collect. You can circumvent this hurdle by paying a somewhat higher percentage for the smaller claims to make them worth the effort.
2. Flat fee per claim
You pay a fixed rate for each submitted claim. The charge can vary from $1 to $8 depending on the service. This option is appropriate for health care practices that process low volume of claims with high payment amounts or claims that are difficult to collect (as from a particular payer). The downside of this arrangement is that the billing service is not motivated to pursue the claims aggressively. This service is effective only if you specify follow up in the agreement and make the payment after the claim has been paid.
3. Hybrid Billing
Hybrid billing is a good combination of percentage and flat fee service. In a hybrid billing option, pricing provisos are defined based on the type of claim and the insurance carriers. This sort of billing arrangement works best for any hospital that sees a wide range of claim amounts and a moderate to high level of claims. This also allows medical practices comply with the fixed fee regulations stipulated for Medicaid and Medicare claims in a few states. The percentage-based fee is used to pay for private insurance claims. The main downside of hybrid billing is that it introduces billing complexity into practices that do not have a large volume of claims.
Before deciding on the billing option you want with the medical billing service, go over your claims volume, amount of claims, and the type of payers. Ask the billing corporation to forecast results based on monthly average volume of claims, sum of claims and payers so that you have some idea of what you would pay under every kind of billing agreement. Consider the potential growth of your practice before selecting the optimal payment contract. There is a perfect medical biller for every kind of practice; it is just a matter of learning the ropes and making an informed decision in hiring the right service for your practice.
Daljeet Sidhu is at TradeSeam. Medical Billing Services blog. Medical Billing quote.