Medical billing and coding

Going Rate for Medical Billing Services in 2023

In the year 2023, how much do medical billing services cost? These services play a crucial role in helping healthcare providers navigate the intricate process of submitting and tracking claims with health insurance companies to receive payment for their services. They also handle patient billing, payment processing, and offer comprehensive reporting.

Nevertheless, the pricing of medical billing services can vary significantly, depending on several factors[1]. These factors include the size of your medical practice, the volume of claims processed, the complexity of your billing procedures, and the range of services provided by the billing company. As of June 1, 2023, prevalent pricing models in the industry encompassed percentage-based fees, flat fees, and per-claim fees.

Let’s delve deeper into these pricing models:

  1. Percentage-Based Fees: This is the most commonly used pricing model, where the billing company charges a percentage of your practice’s net collections. The rate typically ranges from 4% to 9% of your total collections, contingent on the volume and value of the claims your practice handles.

The advantages of this model include an inherent incentive for the billing service to maximize collections, as their compensation is directly tied to your practice’s revenues. However, one drawback is that high-value services could result in substantial fees, even if the billing process isn’t particularly complex.

  1. Flat Fees: Some billing services opt for a flat monthly fee. This fee can span from a few hundred dollars to several thousand dollars, depending on the scale and complexity of the services provided.

Flat fee structures offer predictability in costs and can be cost-effective for practices with higher revenues. However, this model may lack the incentive for the billing service to maximize collections.

  1. Per-Claim Fees: A few billing services charge a fixed fee for each claim they process, typically ranging from $1.50 to $10. This model can be more cost-effective for smaller practices, but the costs can accumulate with a high volume of claims.

As you assess these options, consider the following key points:

Service Range: Ensure that the billing service covers all aspects of the revenue cycle, including patient registration, insurance verification, coding services, claim submission, payment posting, denial management, and patient billing.

Contract Terms: Be vigilant for long-term contracts or those with stringent termination clauses. Flexibility is crucial in case the service falls short of your expectations.

Billing Software: If the billing service utilizes its own software, confirm that it’s user-friendly, secure, and compatible with your existing systems. If they use your software, check their familiarity with it.

Reporting and Transparency: The billing service should provide regular, detailed reports on collections, accounts receivables, denials, and more, enabling you to monitor their performance.

Experience and Reputation: Ensure that the company boasts substantial experience in medical billing, ideally within your specialty. Seek references, testimonials, or case studies demonstrating their capabilities.

Compliance: Verify that the billing service is up-to-date with the latest changes in medical billing regulations, codes, and insurance company requirements. Compliance with HIPAA privacy regulations is also essential.

Support: Evaluate whether they offer support during your practice’s office hours and the communication methods they provide (email, phone, chat, etc.).

The ‘going rate’ for medical billing services can vary significantly, and the most cost-effective choice hinges on your specific needs and circumstances[2]. Thoroughly scrutinize potential services using the aforementioned criteria to ensure they align with your practice and provide value for your investment.

Explore Quotes for Medical Billing Services

Uncovering Hidden Fees in Medical Billing Services When seeking a medical billing service, it’s essential to grasp the complete cost picture, as certain services may not be encompassed within the basic fee structure, potentially leading to additional charges. These hidden fees can substantially impact the overall expense of your billing service[3].

Here are some potential hidden costs that warrant your attention:

  • Set-Up Fee: This one-time charge covers the initial setup of your account, which includes integrating the billing service’s software with your existing systems. While some companies waive this fee, others may impose charges ranging from hundreds to thousands of dollars.
  • Patient Statement Fees: Some companies levy additional fees for preparing and sending patient statements. These fees might be either per-statement charges or flat fees, depending on the volume of statements.
  • Postage Fees: In cases where the billing service sends paper statements or correspondence to patients, extra charges for postage may apply.
  • Clearinghouse Fees: Intermediaries that review claims for errors before submission to payers may impose these fees. Some billing companies absorb these costs, while others pass them on to you.
  • Claims Scrubbing Fees: Additional fees may arise for reviewing claims to ensure they are free of errors or omissions before submission, minimizing the risk of denials.
  • Training Fees: If the billing service utilizes its proprietary software, they might charge for training your staff on its usage.
  • Data Conversion or Data Entry Fees: Transitioning from another billing service may incur fees for transferring and integrating your existing data into the new system.
  • Extra Support Fees: While basic customer service should be part of the package, some companies might charge extra for after-hours support or dedicated account management.
  • Termination Fees: Certain contracts may impose fees for early termination or require payment for a set number of months even if you choose to terminate early.
  • Billing for Non-Covered Services: Some billing services might tack on additional fees for handling patient billings related to non-covered services or managing prior authorizations.

When assessing a medical billing service, insist on a comprehensive list of all fees and potential charges. Request that all costs be transparently outlined in the contract. Transparency is paramount in a billing service partner, and the right company will be forthright about all costs from the outset.

Discover the Best Branded Medical Billing Service

Factors Influencing the Cost of Medical Billing Services The cost of medical billing services can be influenced by a multitude of factors[4]. Here are some of the primary considerations you should take into account:

  • Size of Practice: The number of physicians and the volume of patients can exert significant influence on the cost. Larger practices generally generate more claims, which can either escalate the cost (in a per-claim model) or mitigate the relative cost (in a percentage or flat fee model).
  • Billing Volume: The quantity and intricacy of claims can impact the cost. Handling more claims or intricate billing processes necessitates more time and effort, hence a higher cost.
  • Services Included: The array of services provided by the billing company can affect the price. Comprehensive services encompassing patient registration, insurance verification, coding, claim submission, payment posting, and follow-up are generally pricier than services limited to claim submission alone.
  • Specialization: Billing for specific medical specialties can be more intricate and require greater expertise, thereby leading to higher costs. For example, mental health billing or oncology billing can involve more complexity compared to primary care billing.
  • Geographic Location: Costs may be elevated in areas with a high cost of living, though this factor has diminished relevance with the advent of online services.
  • Software Use: Costs may increase if the billing company provides proprietary software for your practice or if substantial integration or training is required.
  • Experience and Reputation: More experienced and reputable companies may charge higher fees, justified by their proven expertise and reliability.
  • Compliance Requirements: Ensuring adherence to healthcare regulations, such as HIPAA, can add to the operational costs of a billing company.
  • Contract Terms: Longer contracts may feature lower monthly fees but could ultimately prove costlier, particularly if early termination incurs fees.

When selecting a medical billing service, it is imperative to weigh these factors against potential benefits. Opting for a low-cost service may not align with the level of service or expertise your practice requires, while a pricier service may offer valuable features that can enhance your collections and operational efficiency. Be sure to meticulously review and comprehend all contract terms before reaching a decision.

Receive Quotes for Medical Billing Services

Administrative and Software Fees in Medical Billing Service Outsourcing Medical billing services often encompass various fees, including administrative and software charges. These fees are crucial considerations when evaluating the total cost of outsourcing your medical billing.

Administrative Fees: Administrative fees typically encompass the expenses associated with the services provided by the billing company’s administrative staff. In 2023, the average administrative fees range between $3,000 and $6,800. These fees cover a range of tasks related to managing your practice’s revenue cycle, including:

  • Patient registration
  • Eligibility and benefit verification
  • Coding of diagnoses and procedures
  • Submission of claims to insurance companies
  • Payment posting
  • Accounts receivable follow-up
  • Handling patient inquiries about bills
  • Producing reports for your practice

The administrative fee may be incorporated into a percentage-based, flat fee, or per-claim fee structure, depending on the billing company’s pricing model. In some instances, specific administrative fees may apply to particular services, such as claims scrubbing or patient statement processing.

Software Fees: Many medical billing services rely on specialized software to streamline the billing process. This software often offers features like electronic health records (EHR), practice management, and medical billing within a unified platform. The cost of medical software can range from as low as $8,500 to potentially exceeding $30,000, contingent upon your specific requirements. The software may also include features for patient scheduling, reporting, and data analysis.

Software fees can fluctuate significantly based on factors such as the scope of features offered, the number of users, and whether the software is cloud-based or installed on your practice’s servers.

Here are several types of software fees you may encounter[5]:

  • Set-Up Fee: A one-time charge for configuring the software for your practice, including customizing features to align with your needs and integrating the software with your existing systems.
  • Monthly or Annual Subscription Fee: An ongoing fee for utilizing the software, typically determined by the number of providers in your practice.
  • Training Fee: Charges for training your staff on how to effectively use the software.
  • Upgrade or Maintenance Fee: Costs associated with software updates or ongoing maintenance services. This is more prevalent with server-based software, while cloud-based software often includes updates and maintenance in the subscription fee.
  • Data Conversion Fee: If you are transitioning from another billing service or software, you may encounter a fee for transferring your existing data into the new system.

When considering a medical billing service, it is imperative to inquire about all potential administrative and software fees to ensure a clear understanding of the overall cost. Additionally, evaluate the benefits and features offered by both the service and the software to confirm they align with your practice’s requirements and can enhance your billing efficiency and revenue collection processes.”