Medical Billing Services

Medical Billing Services

How are Fees for a Medical Claim Billing Service Calculated?

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Medical claim billing represents a booming industry for two specific reasons: the population in the US is aging, and medical technology is quickly changing. Furthermore, taking into account professional billing services and temp agencies, medical billing specialists account for 40% of the job opportunities in the healthcare field.

When to consider a medical billing service (and what to watch out for)

Doctors' offices, hospitals, and specialty medical clinics may choose to outsource their medical billing in order to save money on hiring a billing specialist on staff. Instead of paying for an annual salary, a healthcare facility will outsource to a medical billing service or even hire a freelance billing specialist who works from home by contract.

While most providers are legitimate and provide an excellent service to the medical community, there are a couple big things to be aware of when outsourcing your medical billing:

Average fees for medical billing services

On average, medical billing services will charge a rate ranging from 4% to 16%. Since this percentage rate has a large variation, practices with fewer claims and higher invoice totals will often be charged less than practices with a large amount of claims and smaller invoice totals.

Basically, if a practice has fewer claims to process with bigger customer bills compared to a practice with thousands of claims at a small value, they'll get a cheaper rate since less work is needed.

When a medical billing claims service charges using a percentage, it will be calculated from one of the following totals:

If a medical billing service doesn't charge based on a percentage, they may charge a fixed fee for each claim submitted, ranging from $1 to $2 per claim. Specialty services could cost as much as $4 to $7 per claim. Using this charging method may save a healthcare office money up front, but it will not create an incentive for a medical billing service to follow up on submitted claims.

Lastly, a hybrid billing approach has grown in popularity that will allow practices to pay a percentage rate for claims submitted on specific patient accounts or to certain insurance providers. Other claims submitted will be charged based on a fixed fee.

Healthcare practitioners should keep in mind that a number of states now deem percentage billing contracts illegal. As a result, many medical billing services are switching to a hybrid pricing structure in order to provide healthcare clinics with flexible, fair payment options.

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