Medical Billing Coding - Start up cost for home-based medical billers, cpt, codes
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Thread Topic: Start up cost for home-based medical billers
Topic Originator: Rachel Dobbins
Post Date March 9, 2006 @ 12:18 PM
Start up cost for home-based medical billers

Rachel Dobbins
March 9, 2006 @ 12:18 PM Reply  |  Email Friend   |  |Print  |  Top

I am writing a paper on starting your own home-based business.  I have been looking everywhere I can find and I still have yet to find a round-a-bout firgure that it takes to start your business

Steve Verno, CMBSI
March 13, 2006 @ 5:51 AM Reply  |  Email Friend   |  |Print  |  Top

There are no exact figures available.  This is because of the variables involved.  Is the person trained or untrained. Is the home in an area zoned for a home business.  Is the home in a home owners association and do the associations rules allow a home business.  When starting your business, what type of corporation will you be, when billing, what specialty will you bill for because if you don't know the specialty, you are hurting yourself and your doctor.  I can't tell you how many postings I see.....I have an ambulatory surgical clinic and I don't know how to bill for this or I want to bill for a dermatologist, I've never done this before, what codes are used?  Does your State Medicaid and/or Medicare vendor require you to register as a billing agent.  What services do you want to offer... full service coding and billing; billing only; billing and follow-up; appeals; A/R recovery; Self pay billing?

Before I go further, I can honestly say this.  (1)  This industry is now oversaturated in some geographical areas.  (2)  People see advertisements that they can earn a 6 figure income doing medical billing.  I;ve been doing this for more than 30 years and I don't make 6 figures with working for 7 practices.  (3)  More than 90% of all at home medical billers will fail within the first year because they can't find a client.  (4)  Doctors already use an inhouse medical coder and medical biller or outsource to a medical billing company. Being new and with no experience, how do you expect to land a doctor?  I have experience and find it hard to get clients. (5)  You want to succeed in this business, you have to love what you are doing.  This is not a job for the faint at heart.  It takes hard work and dedication.  What do you plan to do if you want to take a vacation?  You do, your doctor loses income. You have to love this business to succeed.  What will you do when an insurance company denies the claims you send or they downcode the claims or pay incorrectly?  Not knowing what to do is costly to the doctor and not knowing ruins it for someone with experience that comes along later.

I estimate it will cost about $50,000 to $60,000+ to start your business.  Here is why:
Training and Certification (Ive seen classes start at 20K - 36K)
Society Membership
Software (Between $2K and $250K) ($600+ for support)
Extra Computer (Do NOT Use Home - HIPAA)
Printers (Laser & Dot Matrix)
Fax Machine
Multiple Phone Lines
Answering Machine
Work Table
Lockable Filing Cabinets (HIPAA)
Storage Cabinet
Off Site Storage (Records, EOBs, etc.)
Paper (Lots and Lots)
Office Supplies (Lots)
Postage  (Min $900/mnth)
Fire Extinguishers
Safe (HIPAA)
Printer Ribbons
Claim Forms
Billing and Coding Manuals
Copies of State and Federal Laws
Copies of Medicare, Medicaid, Workers' Comp manuals
Physician Specialty Manuals
Forming a Corporation
State, City, County Operational Licenses
Fire Marshall Inspections
Marketing Material
Errors and Ommissions Insurance
Compliance Plan Development
Attorney and CPA Fees
Contract development

Then there are your monthly expenses:
1) Electricity
2) Postage
3) Office Supplies
4) Salary (Never Forget This)
5) Fuel (Car Gas)
6) Equipment Rental or purchase (Computer & Printer)
7) Software Purchase, Lease or Rental & Upgrades
8) Phone Bills
9) Office Equipment (Fax machine, Copier, Desk, Chairs, Cabinets) (Lease or Rental)
10) Off Site Storage
11) Scanning
12) Errors and Omissions Insurance
13) Rent
14) Clearinghouse
15) Claim & Statement Forms
16) Marketing
17) Health & Dental Insurance
18) Re-Training and Re-Certification
19) Property Insurance
20) Water
21) Bathroom Supplies
22) Cleaning
23) Shredding Company
24) Security
25) Income Tax Prep
26) Legal Retainer

Many of these are in both.  You need start up expenses and monthly expenses.  

Once you have all of this, then you need to figure your bottom line, what you need as a minimum to make per month to pay your salary and your bills. You need to know if you can charge a percentage or a flat fee.  Most states allow you to charge a percentage, but you have to charge a flat fee for Medicaid, so figure how to come up with numbers to give to providers.  Offer to little and you can't pay your bills and forget going back to the doctor for more money for awhile.  Make your offer too high, you lost the doctor because using you is costing him/her more than what he/she was already paying before you came along.

DO NOT, market your self using normal methods such as "using me will save you money" or "using me to send claims electronically will get you paid faster."  These are old school.  HIPAA is here and using you won't save me money.  I have to spend money to use you, to copy things you need to work at home and to check you out constantly to see if you are doing your job correctly.  DO NOT use a company that says if you pay them they will get you clients.  Some may be legit, but many are not.  Once you sign the dotted line, you learn the give you a list of alleged doctors in your area.  You can get that free from the internet and yellow pages.  Some will tell you "THE SECRET" to getting clients.  The so-called secret is contacting Medicare for a list of providers sending claims by paper so you can advertise that using you to send electronically will get their claims paid quicker.  HELLO!!!!  HIPAA came along and doctors are supposed to send claims to Medicare electronically.  Those that are exempt and send by paper won't change because you came along.  As a practice manager, the secret to getting a client is to tell me how using you will "MAKE ME ' money.  You see, I already cut back on administrative expenses, I verify information before I send claims and statements, I send everythig electronically, I know how to appeal better than you and I negotiate my provider contracts so I have excellent contracts and high reimbursement rates.  So, how will using you make me money?  Answer that and you at least get your foot in the door.

Doing medical billing from home can work.  It takes lots of training, certification, experience, dedication, and a love of the business.  It is not something you can do by getting a computer, buying a medical coding and medical billing manual, and buying biling software.  It's a whole lot more than that.  Many of those wanting to do this, without thinking about it are the (1) at home mothers who want to stay with their child.  Taking care of a child is a 24/7 job.  I had 5 kids so I know.  You won't have the time to do this because this is a job that can be 12 hours per day, 7 days per week. (2)  A couple out of work or a spouse now unemployed.  If you have no income, you won't afford the start up costs and it takes you at least 2 months to start brining money in for the doctor.  Many carriers will take 60 days or more to pay claims.  Medicare and Medicaid are the exceptions) (3)  Single parents.  If you think it's hard raising a child, this is a gorilla on your back because you have to fight to get your doctor his/her money and the insurance companies know how to fight better than you.  Your attention must be devoted to your work if you want to survive and earn a living. (4)  Disabled.  Some feel this is just the thing for them and they learn it's not.  You will be amazed at how much paper you are moving around and it gets heavy with just EOBs, letters, charts, copies of checks, etc.  If you don't have a secure place at home for this, you are taking multiple trips to the storage place and you do so anyway if you need a particular document in storeage.

I'm not saying this won't work because there are many at home medical billers that have succeded.  The costs may be alot less than I quoted but this depends on whether you are already trained and certified and what you already have available.  You will need a computer dedicated to this because hubby, wifey or little suzie and johnny cannot access the private information you will be entrusted with.
I have 2 computers, printers, scanners, etc.  My wife is not allowed to touch the work computer, nor can she access it.  She did get mad when I refused to give her the password because my son was on the family computer and she needed to use it, so she thought she could use the work one.  It can put a wrinkle in the marriage when you hear, "Don't you trust me?"  It's not a matter of trust. It's the principal of the thing and laws about patient privacy.  It can also put a wrinkle on the marriage when you're working and your spouse wants to look at what you are doing and you can't allow it or your spouse wants you to do something.  It takes a strong marriage to say, "I can't tell you what I am working on, nor can I allow you to see these papers or Honey, I'm at work right now.  

I do work at home, in addition to working for 7 practices and a medical billing company,  I own my own consulting and training company called Lucrum Consulting and I do A/R recovery, appeals, provider enrollment, and provider insurance contracting and negotiations.

Good luck.

March 19, 2006 @ 7:32 PM Reply  |  Email Friend   |  |Print  |  Top

Hi Rachel

I started my business for about 2,000. That was just for my software and business supplies. If you add a computer then at least add another 700 to that. As for all the other expenses, they have to be considered as your monthly cost such as internet, clearinghouse, phone, fax, and other home office expenses. I spend approximately for my internet, clearinghouse, phone, and fax 300 a month. The reason why Steve incorp. all the home expenses, you can take those off your taxes and could include them in your monthly expense. Usually a percentage of your utilities. If you don't include all the household expense. The cost I listed above will give you an idea what is needed that is just related to your business needs. As with any business, you find you always need additional things as you go. This is least a starting point. Hope this helps

Mary Burroughs
May 21, 2006 @ 4:06 PM Reply  |  Email Friend   |  |Print  |  Top


If you don't mind my asking, where are you located?

June 1, 2006 @ 11:49 AM Reply  |  Email Friend   |  |Print  |  Top

Steve, I wanted to tell you that this is a really great letter you sent. I don't know if you have ever thought of sending it to the trade journals, but it might be a good idea. This is all accurate information that everyone needs to know.

I agreee wholeheartedly that you have L. O. V. E. what you are doing, and I know for sure that the Tampa Bay Area is oversaturated and therefore the pay has gone down. It also seems, these days, that experience in a given field counts much more than a certification. Not only that, but the certification that is most requested in my area is RHIT or CCS, because most of the job postings are for hospital positions.

Another thing that you are correct about, is that every sub, sub, sub...speciality is so amazing different. Most of my experience is in General Surgery and OBGYN, attempting to switch to general pediatrics at the same speed that I can bill and code OBGYN, was impossible. When it comes down to it, Dr's are obsessed with speed, meaning that the rules that govern that type of sub-speciality have to be imprinted in your brain because pausing to look them up "wastes" precious time.
Personally, I would prefer to look something up and be totally accurate than get in another 10 or 20 claims a day. But I do understand where they are coming from.

Thanks for the advice,

June 1, 2006 @ 4:22 PM Reply  |  Email Friend   |  |Print  |  Top

Amen to the downward spiraling salaries.  Around here, not a great area for high paying jobs to start with what with our supposedly low cost of living, jobs that paid $35K ten years ago paid $28K five years ago and are dropping as low as $20K now.  And, certification?  I'm sure it's really popular in other parts of the country, but around here, only hospital coders need it (and like you, Sue, they prefer the RHIT or CCS).  Most employers around here have never even heard of a certified biller.  Just today I asked my boss if he valued the CMBS or the CMRS more, and he'd never heard of either!

Steve Verno
June 22, 2006 @ 6:43 PM Reply  |  Email Friend   |  |Print  |  Top

I'm located in Florida, near Orlando, but my practices are in the Boca/Miami area and my billing company is in Jacksonville.

I write many articles for the various trade magazines, including BC Magazine.

I believe in telling the truth to people so that they can understand that the business we are in is not all peaches and cream.  It's darn hard work. but I love doing it and loving this business is a part of what makes us successful.

There isn't a day that I'm not fighting the insurance companies, but my knowledge of coding and billing, my knowledge of Florida's laws, my knowledge of ERISA, my knowledge of provider insurance contracts and my philosophy of never giving up makes it all worth it, especially when I see the insurance company writing nice checks on things they said they would never pay.

It's not surprising some people never heard of CMBS or other certifcations.  I've been a CMBS since 1999 and a CMBS Instructor since 2000.  My bosses have heard of it and that was something in my favor as to why I was hired.  

As a consultant to the Federal Trade Commission on Medical Coding and Medical Billing, I made recommendations regarding training and certification that I am sure we will see happening down the line.  In the meantime, we have to stick together, help each other, and do the best we can for our providers and ourselves.

September 11, 2006 @ 10:35 PM Reply  |  Email Friend   |  |Print  |  Top


I think that you are a true gem. I don;t get on here as often as I like but I learn something new about biiling and coding everytime I read one of your post.  Billing is hard and without support you will not succed.  I have a Certificate for Nurses Aide and Special Education Teacher and I spend alot of time talking to the billers at my childrens doctors.  To be honest they are scary because they are not helpful.  You said that billers and coders need to stick together and that is why I love this site. I have met alot of people on here who give wonderful advice (yourself especially).
In my case I need somewhere to talk about coding and get help.  I go to school, work partime and also run my own crocheting business.  I would be lying if I said I was not afraid to venture out into the billing world but I am.  People thougt I was crazy when I started the crocheting thing and it does well and I will do this.  I know from reading the post here it is not going to be easy but I am up for the challenge.
I will have my AS in Science for Billing and Coding.  What other cerifications do you suggest?

Thanks to all for all the help and kind words. If anyone wants to send an email I can be reached at

September 19, 2006 @ 9:54 PM Reply  |  Email Friend   |  |Print  |  Top

Well, looking at all the different facts on this site concerning starting up a medical billing/coding business at home has let me know there's no way I can hope to do so. I guess I'll just stick to doing other clerical support from home. That's a better route for out of work New Yorkers who haven't been fortunate enough to have large sums of cash on hand while dealing with layoffs & the job force as a whole especially here in Rochester. Maybe I can think about medical billing & coding from home when I'm able to move to a city/state that actually has a good job market in a bit.
Again thank you all for the info before hand. You helped me not to dive into something that I just can't afford right now regardless of education & experience.

Steve Verno
September 19, 2006 @ 10:57 PM Reply  |  Email Friend   |  |Print  |  Top

I want to give the following advice.

I am a person who is blunt and truthful.  I am aggressive when dealing with insurance companies.  I never stab anyone in the back, I will look at someone in their eyes and tell them to their face what I feel.  Some people don't like the bluntness.  They feel it is very depressing, but in this business, you must be truthful.  

Over the years, I've seen people sink alot of money into wanting to start their own business and they fail.  Ask anyone who has taken an economics course and they will tell you that many businesses fail within the first five years of starting.  It doesn't matter if it's a restaurant, grocery store, record store, barber shop, clothes store or a medical billing company.  If you can make it happen in 5 years, then you have a good chance of succeeding.

I wish that before someone wants to go into this business, they investigate things.  I would suggest they go around to all of the practices, hospitals, clinics and billing companies and simply ask, "I'm about to take a medical billing course.  If I pass, would you hire me?"  If everyone tells you no, what chances do you think you will have once you complete your training?  If someone says yes, then you know you have a chance at a job when your training is finished.  Some people get into this business with no training and it scares me.  The other day, I received a request from someone with no training.  They wanted the usual and customary amounts for "every" insurance company in the United States.  I said, "You've got to be kidding!"  I don't have the usual and customary amounts for the insurance companies in Florida, let alone the entire US.  Heck one insurance company has more than 200 different amounts they call usual and customary for one CPT code.    

I wish that people would look at how much it will cost them to start their own business.  It's more than a computer, software and a coding manual.  I've let people know many of the costs and it is not cheap.  Ask anyone that started their own business.  It can costs thousands in start up costs.  If you borrow the money, and you can't get someone to hire you, how do you plan on paying the money back?  Please understand that if you do get a job, it will take a few weeks of sending claims before any payments come in. So, you need to plan on how you are going to live before you get your first check.

I would love to see everyone that wants to be in this business, to be successful from the start, but I also want people to know the realities of our business and what it takes to start your own business.  You must investigate before you begin.  You must have the money to have the basics and you must have the training to do the job.  All of you already have the one huge thing that is also needed - the heart and love for our business because if you don't love it, you can't succeed.

October 1, 2006 @ 4:50 PM Reply  |  Email Friend   |  |Print  |  Top

Also read " Start your own Medical Claims Billing Service" from Entrepreneur magazines (You can also find this book at or Medical Billing Beginners Book which you can buy at this link I plan to start my own, but believe me I have almost all the time headaches because the listing of things to do is very long and I have trouble in finding financing. I am working on that since 2005 when I started with my course of medical claims and billing...

Steve Verno
July 20, 2009 @ 2:19 AM Reply  |  Email Friend   |  |Print  |  Top

Just FYI, the post I made above on March 13, 2006, has been posted by someone named Jolene, using the nick of Promedplusbilling (Tinkerbell) on another billing forum.

When Jolene was asked if this was a published article or her own, she responded by saying:

Neither a friend sent it to me. Not sure who wrote it. I did modify it a little though

Im sure if you look above, you can see my name as who wrote it.

I will allow this JOlene/Promedplusbilling o provide me with the credit on the forum wher she posted it  by giving me credit for the original post before I consider seeking the services of a lawyer.  I do have the other forum post screen captured and saved as a color PDF file as evidence.

July 20, 2009 @ 11:39 AM Reply  |  Email Friend   |  |Print  |  Top

I owned and operated a billing service for over 11 years in Colorado. We specialized in ambulance transportation. It was extremely successful for the first 10 years. However, once HIPAA came into the picture, our expenses went up, but that wasn't the only challenge, the outsource companies from India were saturating our market as well. They can afford to work for at least 50% less than what can afford to work for here in this country. Plus, how do the HIPAA laws get enforced there? Furthermore, there are a lot of companies who say they are experts in this field only to be lying about what they know, and when our potential clients have been through that kind of thing a couple of time, it built up a major mis-trust for those of us who do know what they are doing.

What you have been talking about is absolutely true. This is extremely hard work. I had a partner to help me over those years otherwise I would have worked at least 16 hours a day (instead of 12)7 days a week.

I would like your take though, on how to deal with the overseas situation where the undercutting of fees puts the Americans at a major disadvantage.

Thank you for any information and or ideas you have about this.



april gary
October 29, 2016 @ 1:16 PM Reply  |  Email Friend   |  |Print  |  Top

I want to start my own; looking for the right software. Any help with this I would appreciate. Thank You

July 2, 2017 @ 5:43 PM Reply  |  Email Friend   |  |Print  |  Top

50/60k? I've been researching this for more than a year and your the only one that puts it this high. If you don't want people to start a home based business then just say so but quit scaring people.

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