| Help Doctors Help Patients: Starting a Medical Claims or Billing Service |
Some doctors spend decades after high school pursuing their medical licenses. After all those grueling years of study they should be practicing medicine, not navigating the maze of billing codes and policy limitations. Imagine having over $100,000 of school loans to repay while your potential income is waiting in a stack of unprocessed claims or, even worse, lost in the mail.
As a Medical Claims Processor you help relieve this burden on our health care providers by expediting the billing process, typically using electronic claims. Believe it or not some of these brilliant physicians still use snail mail to send their invoices to the insurance companies. If you have ever been a patient waiting to find out how much your insurer has covered, you would know that the wait can be excruciating. Processing claims electronically, however, has made the procedure quicker and less painless.
Most insurance companies give top priority to electronic claims. Medicare, for instance, pays out within 10 to 14 days after submission of an electronic claim. Paper claims, on the other hand, can take up to a month to pay off. As a result, the health care industry, which grosses over $1 trillion per year, holds innumerous opportunities for competent Medical Claims Processors to strike out on their own.
Finding Your Niche
The diverse field of medicine encompasses many specialties. Your clients may be obstetricians, endocrinologists, psychiatrists, chiropractors, etc. Or they may be the less obvious ambulance services, midwives, home care specialists, dentists or medical equipment providers. The claims professional typically chooses a specialty with which they are familiar, but are by no means limited to that market.
Keep in mind, however, some specialties come with larger workloads. For instance, a chiropractor may see 100 patients per day, whereas a cardiologist may see 20. A general practitioner may require you to know more codes because they offer a larger array of services. Make sure you have adequate staff to handle the amount of claims you will undertake.
You may choose to specialize in your range of services as well. Some processors focus only on sending claims to the insurance company. Others will offer a variety of accounting services including submitting claims, billing patients, and tracking accounts receivable and payable. The claims business will require you to have specialized software that will keep customer information, and generate claims and billing invoices.
"If you choose to accept this mission…"
It takes a certain amount of tact to manage you own medical billing service. The position requires an ability to relate to doctors, some knowledge of medical terminology, acuity with the coding system and the ingenuity to troubleshoot computer problems. It is certainly not for everyone.
As a Claims Processor you will input patient information, including insurance and policy data into a database. Sometimes your client will ask you to track other information such as referral source or the frequency of use of a particular service. You will need familiarity with the CPT or ICD-9 codes that correspond to specific services in order to generate the claims. After inputting the codes, you will submit the claim to the insurance company directly or to a clearinghouse.
Sometimes these requests for payment are not straight forward and require follow-up.
Generating a report of claims and reviewing it for errors ensures more accurate processing. Reducing the number of claims rejected because of processing errors will increase your value to your client. On some occasions, paper claims will be necessary. Perhaps documents that verify a patient's eligibility are needed. Sending records through traditional mail requires knowledge of postal regulations. Generally, anything in excess of four pages requires extra postage.
Posting payment to patients' accounts will also be among your duties. Most software programs will give you a balance sheet with the amount a patient owes and that which is already paid. You will need to follow up on past due accounts. Your job is to contact the responsible party and procure payment or check the status of a payment that is en route. Sometimes the debt is owed by the insured, other times it is the insurer that is delinquent. The software will be able to generate these reports for you.
From the Comfort of Your Own Home
It really doesn't matter where you set up shop. One of the perks of this profession is that the work can be done from home with a good computer, reliable internet access, and other office supplies. However, if you find that there is too much distraction at home or take on enough clients to require extra staff and more space, you may find that investing in office space suits your situation.
Some of the basics besides your computer will include medical claims/billing software, a printer, a fax machine, stationary, a telephone with answering machine and postage. Reference books for coding such as the ICD-10, CPT or HCPCS Expert, and a clearinghouse membership are also essential. The clearinghouse company is the middle man between you and the insurance companies that will receive and transmit electronic claims. You will want to choose them, as well as your software package wisely, as the operation of your business will depend on them.
Do your homework. Ask other medical claims professionals about the reliability of the clearinghouse or the software. Make sure the software package had convenient technical support. Some offer a range of applications from the basic claims functions to marketing help for the self-employed. The software can run anywhere from $500 to $10,000, but more expensive is not necessarily better. The clearinghouse membership can cost up to $300 with a $50 fee per doctor.
Get them paid, Get you paid
What started as a $3,500 investment could generate between $20,000 and $100,000 worth of income annually. Many start-up claims processors work part-time at first, until they can get their business off the ground. It can take up to five months to kick into high gear. This is the amount of time your client may need to convert his/her current system. It also takes time to find these clients and get setup with the clearinghouse. So don't abandon your day job just yet.
Most medical claims processors use one of two arrangements for their own compensation. They either charge by a percentage or by the number of claims they process. Claims processors who charge a percentage are usually those that offer billing services as well as claims processing. After depositing both patient and insurance payments into a client's personal bank account, they bill their clients, the doctor, for a fraction of the money they have collected. The client receives a bill either for the accounting services. Alternately, medical insurance billers who only process claims may choose to charge by the claim. They also bill clients on a monthly or bi-monthly basis.
Putting Your Name Out There
You will need to get the word out that you have a new medical billing business. Tell your friends and family, colleagues and associates. You never know when one of their encounters with a physician or health care professional could lead to a referral. Also, mention your new business to your own physician. Don't necessarily ask for his patronage right off the bat, but don't be too reticent to let him/her know about your venture. Doctors inevitably talk to other doctors. Your physicians or your parents' caregivers or your spouse's specialist may be your ticket in the door.
Word-of-mouth referrals will be important in building and sustaining your business. It is also necessary to drum up contacts by drawing from other professionals you already know. Lawyers, real estate agents, accountants and any number of professionals will have doctors among their clients. Using these contacts as referral sources, as opposed to cold-calling doctors from the phone book, will make your prospective client more receptive to your pitch. It may only take a few clients to keep you busy in the beginning, but the market is always open for expansion.
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