Medical Claims Billing – Selecting The Right Fees Agreement
Medical billing services offer myriad options for practices to pay for their services. Each practice has unique needs and the correct alternative for you depends on the volume, kind, and dollar amount of claims. Following is a list of the billing options available to health care offices, with their benefits and drawbacks.
1. Percentage based fee
This is the most widespread type of billing option offered by medical billing services. You pay a percentage of the net amount received or of the gross claims submitted to the insurer. Percentage rates vary from four percent to sixteen percent as they depend on the services included in the contract, claim value and monthly average number of claims. Percentage based contracts work well for almost all medical practices, especially if the medical billing service deals with all the tasks associated with billing. This method of billing provides motivation to the billing service to maximize collections – a great benefit for the client. The only downside of percentage based pricing is that the billing service tends to neglect smaller claims as the small payments do not justify the aggressive follow up required to collect. A good alternative is to pay a marginally higher percentage for the smaller claims to make them worth the effort.
2. Flat fee per claim
The medical billing service charges a fixed rate for each filed claim. The amount could range from $1 to $8 based on the service. This alternative is suitable for medical practices that see high value but low number of claims or claims that are difficult to collect (as from a particular payer). The disadvantage of this agreement is that the billing service does not have much incentive to pursue the claims aggressively. This service is useful only if you stipulate follow up in the contract 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 billing option, pricing stipulations are defined based on the kind of claim and the insurance carriers. This kind of billing contract is fitting for any hospital that has varying claim amounts and a moderate to high level of claims. This also helps medical practices comply with the flat fee rules set for Medicaid and Medicare claims in some states. The percentage-based fee structure is applied for private insurance claims. The main disadvantage 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, carefully evaluate your claims volume, amount of claims, and the kind of payers. Ask the billing corporation to project results based on your volume, sum of claims and payers so that you have some idea of the amount you would pay under each category of billing option. Consider the future growth of your practice before selecting the best possible payment contract. There is a medical billing service out there for each 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 the author of this article.
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