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Thread Topic: start up fees
Topic Originator: Donna Whipple
Post Date January 28, 2007 @ 2:31 PM
start up fees


Donna Whipple
January 28, 2007 @ 2:31 PM Reply  |  Email Friend   |  |Print  |  Top

We are a billing company doing primarily mental health billing.  We are beginning to move into other speciality areas.  I would like to know what billing companies typically charge for a start up fee for a new practice.  We have been charging a one time start up fee of 150.00 but I have a feeling this is low, particularly as we branch out to other specialties.

Amanda
February 7, 2007 @ 12:23 PM Reply  |  Email Friend   |  |Print  |  Top

I personally don't charge a setup fee, but my friend charges $1,000 set up and gets it!!  You may want to do around $500??

Amanda

Donna Whipple
February 11, 2007 @ 12:44 PM Reply  |  Email Friend   |  |Print  |  Top

Thanks, that sounds like good advice. Why don't you charge anything to start up?

Steve Verno
February 11, 2007 @ 6:07 PM Reply  |  Email Friend   |  |Print  |  Top

I personally don't charge anything either.  My reason is that the doctors who contact me to ask for my services are usually one step from bankruptcy because the medical biller or medical billing company did such a terrible job, that almost no money came in, claims were unsent or sent with so many errors, denials were never appealed, monies were written off that should not have been, and they have an A/R that would make you cry.  Sadly, these are doctors living on credit cards, that is how bad they are.

Donna Whipple
February 12, 2007 @ 3:40 PM Reply  |  Email Friend   |  |Print  |  Top

That is a tough situation.  We have thus far done mostly small mental health providers and they tend to be broke anyway.  We have found that the start up fee just gives us the confidence that they are serious about beginning with us an allows us to plan for the work.
Don't many companies charge start up fees to cover the fees they have to pay software vendors to add practices?  We have written our own software so we have not had to deal with this.
I thought people did charge larger start up fees as a rule but judging by your responses maybe we are in the right ball park.

Amanda Maldonado
February 12, 2007 @ 4:06 PM Reply  |  Email Friend   |  |Print  |  Top

If you do charge a set up fee it just gives the provider of service another reason to look elsewhere.  You have to sort of gauge your area's market, are the other billing services in your area charging a set up fee?  I think you should but I don't.  I do understand why the set up fee is in place because it is a lot of work to get started on an account.  I guess it depends on how bad you want the account.  If it wasn't an account I was too interested in I may but then again if a high dollar account called I know in the future I would make up for the time spent setting up the account.

Amanda

Steve Verno
February 12, 2007 @ 4:18 PM Reply  |  Email Friend   |  |Print  |  Top

Donna,

There is no set rule, policy or law that requires you to charge a set up fee with a provider.  That is personal choice, which is why you see several responses.  

I use a software program that does not charge for adding a practice.  Setting up a provider doesn't take me much time.  Most of my claims go through the insurance company anyway, so it doesn't cost me anything to send the claims electronically.  

I tell my providers to develop a Practice Financial Plan when dealing with carriers that they are not contracted with.  I show them the different patient benefit manuals where it shows that the patient must send their own claims.  So, they tell the out of network patient, they have the option of seeing my provider, knowing that they have to pay 100% at the time of service and to send their own claims for reimbursement or they can seek care from a network provider.  That elminates so many problems with the non-contracted carriers.  If the patient doesn't like it, they can leave.  You see, most of my provider's problems were with the non-contracted carriers.  They wouldn't pay the claims, if they did pay, they paid what they felt like paying.  Many sent the payment to the patient who wouldn't pay until I sent the IRS a nice letter asking to have their tax return audited.  They ignored the provider's appeals, denied the claims for timely filing and other games.  Now, my providers don't play those games.  The patient knows before the come in for the appointment that they have to pay or cancel the appointment.  Most do cancel which leaves him time to see the contracted patients.  My provider isn't wasting time chasing the non-contracted carrier for pennies if he gets that at all.  

With the contracted carriers, I renegotiate the contracts to get better reimbursement rates, payment of the nonpayed or incorrectly paid claims and a designated web location to send claims for free.  It takes me about a year to get the provider out of the red and into the black.

But, others choose to charge a provider a set up fee and there is nothing wrong with that.  Some of us choose not to and again, there is nothing wrong with that.  Personal choice is what guides us.

Leah
February 12, 2007 @ 4:52 PM Reply  |  Email Friend   |  |Print  |  Top

I don't dharge a start-up fee.  The provider types I market to don't have a recurring census, so just about every claim has demographcs attached.  The start-up fee is partially to cover costs of keying in all the demographic information for all the existing patients. so as to avoid having demographics attached to every claim.  It is also used partially to defray the cost of new client set-up.  I, too, use software that has no one-time cost of adding another data base.  Credentialling is already a separte fee, so except for adding them to my Medicare submitter number (which takes virtually minutes to prepare) I don't have any costs there. So, if I were to charge a set-up fee it would be, basically, a fee for services not rendered.  

On the other hand, if you have actual expenses incurred when you set up a new provider, there's absolutely nothing wrong with passing those expenses on to your client.

Just like everything else in this business, there is no one answer to any question.

Amanda Maldonado
February 12, 2007 @ 5:41 PM Reply  |  Email Friend   |  |Print  |  Top

Yes, that is the only reason I would ever charge a set up is entering all those demographics, that is the most time consuming.  

Amanda

Mrs. Tedeschi
September 11, 2007 @ 5:36 PM Reply  |  Email Friend   |  |Print  |  Top

Thank you so much for responding to the "REAL TRUTH" of what's going on in Medicine today.   It's an unfortunate situation that   HAIRDRESSER's  MAKE MORE MONEY than physicians.  (Not to belittle what our hairdresser can do for us on a "bad hair week" )- However, you don't see the hairdresser's having to pay someone to collect bad debt from their customers or a 2nd party.  This only happens to physicians who can't afford to hire the additional pesonnel to FIGHT for the $ due to them.  Who should be footing the bill for collections............ ARE THE INSURANCE COMPANY's who create this chaos!!!!

Steve Verno
September 17, 2007 @ 7:37 AM Reply  |  Email Friend   |  |Print  |  Top

It is a combination of issues

1)  Part of the problem rests with the patient.  Many feel that because they have an insurance card, they are entitled to all of the medical care available AND they feel medical care should be free, after all, they are paying hundreds of dollars in premiums for limited benefits. The patient refuses to pay when they are required to pay.

2)  Part of the problem rests with the provider.  The provider wants to provide medical care and they are terrible business people.  99% of the providers I have visited have NO practice financial plan, they DO NOT talk to the patient about their financial responsibilities, they DO NOT collect copays and deductibles at the time of service, and they try and come up with every excuse to write off copays and deductibles.  The doctor also signs terrible contracts with the insurance companies and they give away their rights and most of their reimbursement.  They also hire staff that do NOT want to deal with the patient and their financial requirements.  The staff doesn't understand that the patients payments pay their salary.  The doctor also hires people who don't know what they are doing.  The coder or biller they hire has no training or certification in medical coding or billing and they have no understanding about the specialty itself. Lets not talk about the provider who is now being caught for sending fraudulent claims.  

3) Part of the problem is the insurance company.  They pay as little as possible as well as increase patients premiums.  They pay their top employees millions in salary, bonuses and stock options.  How can you explain that you made millions in profits in a quarter, pay almost nothing to the provider, yet demand 40-50% increases in premiums.  They place most of the payment responsibilities onto the patient through high copays and deductibles with dwindling benefits.  

4)  Part of the problem is with the medical biller.  Many have no training and certification.  They lie their way into a job that overwhelms them once they are in the position.  Because they are not trained, they allow incorrect claims to go out the door to the insurance company causing claims to be denied or pended.  They do not know how to appeal a denial, nor do they know how to work accounts that are outstanding, so the provider is losing revenue.  One provider recently complained that his biller never did anything for 7 years.  He has more than $2,000,000 in unpaid and improperly denied claims.  He won't recoup much of this because of the time limits. This is no longer a profession where you can work by just buying a book and software,  It demands training and certification.

5)  Part of the problem is with those who are students wanting to become coders and billers.  You have those with no clue about what is in store for them, so they skip classes missing valuable information that they need, they arrive late, leave early, they text message in class instead of paying attention, they fail their tests, they go to medical billing forums to have the experts answer their homework or take their online tests for them.  When they fail the class, they appeal and blame everyone for their failure.  The institution doesn't want a lawsuit so the student may be passed.  The good institution backs up the instructor who kept excellent documentation on the students failing progress.

6)  Part of the problem is with the training institution themselves,  They see this as a get rich process by charging $10,000, $20,000 up to $35,000 or more for training.  They hire people who do not know how to teach coding and billing.  Their only requirement is an associates degree.  I replaced an instructor who had a bachelors degree but no background in coding and billing.  What did the student, who stayed in class, do? Spend 4 hours reading from a book.  When they asked questions, the instructor could not answer them.  So, the instructor found herself over her head and quit.

You ask where the problem lies?  It lies with us all when we allow our profession to be taken litely.  Doctors need to treat their practice like a business.  The staff needs to learn where they paycheck lies. The doctor must have a financial plan and speak with the patient about their financial requirements.  They must collect what is due when services are rendered.  They must hire medical coding and billing staff with the proper training and certification.  if the person has no training, you do not hire them.  The doctor must sign contracts that are equal and provide decent reimbursements.  Patients and employers need to fight back against high premiums and dwindling benefits.  They need to look where their hard earned money is going when you see CEO salaries with bonuses in the hundreds of millions.  The formula is as old as money itself.  Profit = high premiums and keeping claims payments as low as possible.  

The US is the only country where the insurance company runs medical care.  Socialized medicine must be working because it is in every country in the world except the US and we are the richest country with the sickest people who cannot afford medical care.

Medical coding and billing is no longer an easy profession and it deserves the better respect than what it receives today.  You can no longer work in this profession without training and certification.  Look at the questions being asked here and other forums.  "I don't know anything about ______ can someone teach me all I need, to do my job." "I just got a job for a _________(insert name of specialty), can someone tell me everything I need to know about this specialty because I don't know anything about it." "I have an appointment with a doctor who specializes in ________, can someone teach me just enough to answer his questions so I can get the job?"  Would you accept this from a doctor, nurse, plumber, car mechanic, or other profession? Why do we allow this in medical coding and billing?

angela
February 19, 2008 @ 10:56 AM Reply  |  Email Friend   |  |Print  |  Top

I do not agree with the reply posted my Mrs Tedeschi.  Insurance carriers do not cause that much confusion over a copay.  Not an HMO type policy anyway.  Those contracts offer a set amount that is supposed to be due at the time of service.  The problem is that providers offices don't always collect that money UP FRONT.  The chances of collecting a copayment due after the patient walks out the door drops significantly.  That is why so many offices (including my own PCP) have a sign that states any copay not paid within 5 days of time/date of service accrues a $10 billing fee.  It encourages the patient to pay timely to avoid an additional cost.
Copayments are the patients "contract" with their private payer, who often times pays out a lot more than the premium collected on that member.  There is nothing wrong with expecting the patient/member to pay $10 or $20 when they go to see their doctor.  

Not that this has anything to do with start up fees, and I have no idea what prompted Mrs. T to post that opinion on this thread.

I have a friend who owns her own business and she does charge a start up fee.  I believe she charges somewhere in the area of $500.  I don't see anything wrong with charging a start up fee -doing it for  free is pretty generous, and part of the start up is to make sure you are getting a provider who is seriously interested in your services.  She charges a percentage of collected revenue as her monthly charge rather than a flat rate.  The percentage varies based on the size of the practice.  By charging a percentage, when the carrier fee schedules increase, she gets a "raise" without having to directly charge more.  It's kind of a sly way to make more, but we all deserve yearly pay increases!!

angela
February 19, 2008 @ 10:56 AM Reply  |  Email Friend   |  |Print  |  Top

I do not agree with the reply posted my Mrs Tedeschi.  Insurance carriers do not cause that much confusion over a copay.  Not an HMO type policy anyway.  Those contracts offer a set amount that is supposed to be due at the time of service.  The problem is that providers offices don't always collect that money UP FRONT.  The chances of collecting a copayment due after the patient walks out the door drops significantly.  That is why so many offices (including my own PCP) have a sign that states any copay not paid within 5 days of time/date of service accrues a $10 billing fee.  It encourages the patient to pay timely to avoid an additional cost.
Copayments are the patients "contract" with their private payer, who often times pays out a lot more than the premium collected on that member.  There is nothing wrong with expecting the patient/member to pay $10 or $20 when they go to see their doctor.  

Not that this has anything to do with start up fees, and I have no idea what prompted Mrs. T to post that opinion on this thread.

I have a friend who owns her own business and she does charge a start up fee.  I believe she charges somewhere in the area of $500.  I don't see anything wrong with charging a start up fee -doing it for  free is pretty generous, and part of the start up is to make sure you are getting a provider who is seriously interested in your services.  She charges a percentage of collected revenue as her monthly charge rather than a flat rate.  The percentage varies based on the size of the practice.  By charging a percentage, when the carrier fee schedules increase, she gets a "raise" without having to directly charge more.  It's kind of a sly way to make more, but we all deserve yearly pay increases!!

Angela
February 19, 2008 @ 11:07 AM Reply  |  Email Friend   |  |Print  |  Top

Steve Verno 9/17 reply - #5 - I could not agree with you more!!!

I have seen TONS of posts on these forums of people looking for answers to what appears to be homework related questions.
OPEN your textbook and look for the answer.  You'll learn a lot more that way then waiting for someone else to provide it to you.
And how will these people function "on the job" if they don't know how to use the bountiful resources available to us coders???  It's fine to ask questions, but you can't rely on the public to do your work for you- be it home work or work work.
I think that is a contributing factor in why companies are now imposing a pre-employment test for coders.  When I was in school, the absentee wasn't too bad for my class, but I have heard through the grapevine about some who failed the CPC exam, and they were surprised they didn't pass!  HELLO!!!  Our instructor was fabulous with tons of relevant material and knowledge just flowing out of her.

I have read many of your posts, Steve and most of the time I agree with your replies and you hit the nail on the head on this one.
There are many problems facing the health care industry, and they are not going to just go away.  The problems are going to need work and dedication of all providers, coders, members, and billers out there.  Everyone needs to take responsibility for themselves and be professional.

Take care

Michelle Rimmer,CHI,CMRS,CBCS
March 21, 2008 @ 9:30 PM Reply  |  Email Friend   |  |Print  |  Top

Hi,

You can visit www.learnmedicalbillingonline.com for the guide to "Starting Your Home-Based Medical Billing Business"--it's available for only $5.95 and offers great advice on start-up!

Good Luck :-)

Michelle Rimmer, CHI,CMRS,CBCS
Textbook author-'Medical Billing 101'
Owner-learnmedicalbillingonline.com; a division of Shore Medical Billing

Luna
February 19, 2008 @ 6:16 PM Reply  |  Email Friend   |  |Print  |  Top

We typically charge a nominal carry over fee from our billing software company.  The amount is never more than $1k, we provide a copy of the invoice directly to our client so that they can see it's an straight investment into their own practice.  We carry the monthly maintenance fee from the software company as cost of doing business.

This fee is seperate from collection fees that do not get assessed until we collect for the client.  We have never had any qualms with any prospective clients on the fee.

B Davis
February 20, 2008 @ 9:04 AM Reply  |  Email Friend   |  |Print  |  Top

Hello,

Do you have any advice/tips on "How-to" start your own billing/coding company?

Thanking you in advance



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