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How does anyone make any money doing electronic medical billing? Seriously.

Consider. Every claim for insurance reimbursement starts as a piece of paper containing the patient's personal data and the particulars of the insurance company, the diagnosis and the procedures. If it's a paper claim and the piece of paper is a Form 1500 you can just stick it in the mail and wait for payment or rejection. A practice does not really need an outside biller to do that.

But if the claim is to be filed electronically it gets complicated.

The biller needs a computer, Internet connection, access to a clearinghouse and special (and expensive) software. Then each and every claim must be hand typed to transfer all the information on the piece of paper into the computer. This must be done most carefully or the claim will be rejected for one mistype or another, which can be very hard to detect and correct.

The simple act of typing information from a hard copy into a computer for a single claim can easily take five minutes. At that rate, the maximum number of claims that can be filed in an hour is twelve; in eight hours, ninety-six.(That's not far off the number of patients a practice might see in a week.)

That's if the hard copy is absolutely clean, all required information recorded and no ambiguities. But the hard copy is usually handwritten, often missing information, sometimes impossible to decipher and requiring a lot of mucking around to come up with the correct and complete information. This raises havoc with hourly throughput. So do the occasional timeouts of the software and clearing house.

Assume that actual throughput is seventy claims per day. Weekly output is 350 claims. Maximum per person. Time out for lunch, stretching, rubbing eyes, etc. Also have to deal with filing and record keeping, invoices, deadbeats and other chores such as billing patients that the practice asks you to manage.

Assume you are a set fee biller, not a percentage biller. Assume $4 per claim filed. That comes to $1,400 gross weekly income. At least fifty percent of that goes to overhead leaving a net income of $700 or about $33,600 per year. That's not big money. And if you have to hire people to help run the business it gets to be even less money.

A major factor is this: there are no economies of scale. The 350th claim filed is just as much trouble and the same costs as the first claim filed. Which makes me wonder how some billers I have seen manage a graduated pricing model with lower prices for higher numbers.

And of course we are assuming at the start that we actually have five practices each of which generates seventy clean claims a week. Those trouble-free and ample practices are extremely hard to come by.

I would welcome any comment, especially any that shows me to be wrong and why.

We charge 8% of what is collected less copays that are collected at the office at the time of visit. Clearinghouse fees are picked up by the provider, but we pick up the cost of statement processing. We are a small billing services so maybe our results aren't typical. We used to charge an hourly rate but found there was no money to be made going that route (no reward for processing claims more efficiently).

I know this is an older topic, but there aren't any other posts in this section of the forum, so I imagine it is okay to respond to it.

A lot of times, using electronic medical billing doesn't pay off until farther down the road. In the long run, it starts to be cheaper to have software to manage all of the billing needs, along with the prescribing and everything else. In today's world, technology is becoming such a staple, it is necessary to keep up with everything, even though it may be more cost-efficient right now.

It may be an older topic but remains relevant. I am surprised at how little response there has been to it.

I have a decent sized billing service (16 years old) and can easily submit 60 claims or more per hour. Many of the billing is for patients already in Medisoft so it does not take long to enter a claim. And entering a new patient takes less than 2 minutes...so charging by the claim like we do can still be profitable.

Steve

That's where we would like to be. How many people have you on staff?

Just myself and then I have my wife and daughter working part time.

That's an impressive website.

To mbpro: you said that you can process as many as sixty claims an hour. How is that possible? Are the claims pre-processed in some manner before you get them?

None of our client practices does any work at all on the claims they submit to us for processing. Everything comes in as hard copy, either Form 1500 or Superbill (where did that term come from?). Every last one of them is hand written. Very often the patient information is entered by the patient herself, some of whose handwriting would make the average doctor's handwriting seem the soul of legibility. With that starting material, I defy anyone to cleanly process more than a dozen claims per hour.

I don't take anything that is handwritten. I have online secure forms my clients complete (they can enter up to 15 claims on one online form)...or they can provide me computer-generated info.

Hey,
Online billing payment is better. It increase our speed and we can do more billing. I haired a man and he is performing well he doing good job.