Starting a medical billing business - Here are important keys in getting a home medical billing company started. Also some estimates of the typical costs you can expect. We get a lot of questions about how to get a medical billing business started.
This page discusses some of the most important aspects in starting up like what you need, estimating costs, planning, marketing, and training considerations.
We'll also touch on topics like software, licenses and taxes, setting your fees, etc. I've tried to list everything I could think of here to consider for a home based medical billing business start up.
If you are like me when I was thinking about starting a medical billing business, I had a ton of questions and concerns like:
I'm sure you have these types of questions - and probably a lot more. We'll attempt to answer those and provide you the info to make informed decisions and figure out if this is the right path for you.
Estimating Start up Costs
To give you and idea of what to budget, here's a listing of the necessities for starting a medical billing business and ball park cost:
So you can estimate the cost for start-up anywhere from $4000 to $6000. Of course if you already have a computer and office - like most of us do - it would be more like $2000 to $4000. That's very reasonable to start a home based business with this kind of potential.
Of course it's not just the start-up costs
you need to consider. There's also the reoccurring monthly costs. When
you first get started this should be pretty low unless you already have
clients. Also not mentioned is marketing cost. Depending on how you
choose to market your business, this can vary widely. If you are like me
and do it yourself, your marketing and advertising costs are pretty
much what you spend on the materials. If you choose to advertise
depending on the outlet you can spend several hundred to several
Check out these 10 money and time saving tips when starting a Medical Billing Home Business.
You may find our ebook helpful in answering your questions about starting a medical billing business.
For more info Click Here.
Keys to Starting a Billing Business
Our video below gives 6 important keys to starting a billing business:
Plan To Succeed
When starting a business, it's important to plan what you're going to do and how you are going to do it. A business plan is like a road map to successfully starting a medical bulling business. It doesn't have to be anything elaborate. Planning is one of the keys to success.
If you feel lacking in business skills, an organization called SCORE (Service Corps of Retired Executives) is an excellent resource for advice and mentoring to establish and run a business.
Your Target Clients
You need to determine what your target specialty will be. If you already have experience in a particular specialty it's easier getting started to concentrate in that specialty. You'll already be familiar with the particular coding and terminology and having contacts in that field will make it easier to get a client.
Quantity vs. Quality
Another consideration when starting a medical billing business is the number of patients a practice may see a day and the average charges per visit. A family practice may average $120 per visit whereas a cardiologist may average two to three times as much per visit. The family practitioner may see 30 or 40 patients a day where a specialty may be much less than that.
The size of the practice is also important. I've noticed the smaller practices with one or two doctors usually lack the office staff and are more likely to need help.
When starting out a smaller practice may be better so you won't be slammed and can grow with the practice. It's also good to concentrate on a particular specialty as the coding and terminology won't be overwhelming. Family and general practices that deal with a wide variety of patient issues are going to use a lot more diagnosis and procedure codes.
My first client was a facility doctor at an assisted living facility. I didn't make any money but I learned a lot. He only generated about 30 claims a month so there wasn't a lot of pressure.
Learn Billing and Coding
Before starting a medical billing business, get a good foundation in the fundamentals of billing and coding. There's no substitute for knowledge. Several options to learn are available - online, a local community college, or vocational school, or self-study.
Medical Billing Live offers for a reasonable cost. I’ve purchased their ebooks separately and thought Alice and Michele give great and realistic advice on starting a medical billing business, marketing, and signing your first doctor. They operate a successful medical billing business in NY so they speak from experience.
I actually purchased these books separately but it’s a better deal to purchase as a package. They have some good marketing ideas that I’ve been using for my business.
Also another good affordable online medical training courses offered by A Step Above. Their courses are listed here. They have different options and offer an affordable medical billing courses that allow you to study at your own pace. Their courses also cover operating and starting a medical billing business.
Being up to date and knowledgeable on trends and regulatory requirements can be invaluable also. Most office managers don't have time to keep up with all this. With the federal government getting increasing involved in healthcare, there's always a new regulation or requirement that effects the industry.
An excellent reference for medical billing specialists is Understanding Health Insurance - A Guide to Professional Billing from Amazon. It's an excellent source for describing CPT and ICD coding, managed care, legal and regulatory issues, reimbursement methods, and common health insurance plans. It's written in an easy to understand style for the complex issues in medical coding and billing and has several practical examples. I bought an earlier version of this book when starting a medical billing business years ago and still refer to it today.
Starting a Medical Billing Business - Marketing
When you are just getting started, most of your job is marketing. The more aggressive and effective your marketing, the sooner you'll sign that first client. I worked hard to get our first client, a physician for a small assisted living facility. He only had about 30 claims a month. I didn’t make much money but I learned a lot and it opened other doors for me.
Here's some good marketing resources for starting your medical billing business.
Promote Your Business With a Web Site
Most people these days just do a Google search when looking for a local service. Your website is a great resource for marketing a service business. You can also make money with your site with Google AdSense and affiliates, or selling e-goods. We built this site using a service called Site Build It. I learned there’s more to getting people to find your site than just putting it out there.
A great resource for learning to build a website is 2createawebsite.com. It's got a lot of great tutorials for beginners. The author Lisa does a great job explaining what it takes to build a website. She also makes very helpful video tutorials.
Find a Mentor
One of the things that has helped me tremendously when starting a medical billing business is knowing someone in this business I can go to for advice - a Mentor. Having someone you can turn to for advise is invaluable. When signing my first doctor, I had a lot of questions ranging from how much to charge to what software and clearinghouse to use - and all the "nuts and bolts" of operating a medical billing business in between.
My mentor operated a medical billing business in another state so we didn't have to worry about being competitors. If you know someone in the business ask to meet with them and see how they run their business. They will probably be happy to share their experiences and advice.
Choose a Name
Select a name for your medical billing business that that clearly conveys what you do. Put as much effort into naming your business as you do in planning your business. Ideally, your name should convey the expertise, value and uniqueness of your service. Try not to use obscure names or be too generic.
You also may not want to use a geographic name such as a city. Potential clients may assume you only serve a certain area. For example I server clients in both Alabama and Georgia. I have phone numbers (thanks to Packet8) in both Metro Atlanta and Birmingham. If my business name was tied to one of those areas, it would imply that we only serve one area - thus limiting my ability to gain clients in other areas.
Set up a Business Bank Account
Your accountant will tell you one of the first things to do is set up a business account. Make sure you have your business license first (or some other proof you've established a business). Without it you won't be able to deposit your checks made out to your business. It's also necessary to keep your business expenses separate from your personal.
Starting a Medical Billing Business - Set up an office
Here's the major office equipment needed:
I store the most recent files in my file cabinets and occasionally move the older files to bankers boxes in case we ever need to access. We keep all our EOB's and superbills in these files. Make sure you have room for all your filing.
One big cost saver for me has been using VOIP (Voice Over Internet Protocol) phone service - especially for out of state clients. We use Packet8 which only costs between $25 and $30 a month with unlimited long distance. The service has been very reliable. As VOIP relies on your internet connection to function, it's important to have reliable internet service.
My engineer husband put all our devices on a UPS (Uninterruptible Power Supply) to improve the reliability. It also has a feature that sends you an email when you get a voice mail. They have a variety of products for business such as hosted call center and hosted PBX so as your business grows your phone system can handle it.
Starting a Medical Billing Business - Software
This is a big decision that can affect your budget. Find out here what the options are for medical billing software and what features are important. You really don't have to spend a fortune for a good medical billing software. You'll also need to be thinking about a Clearinghouse.
Know Your Stuff - Reference Books for Starting a Medical Billing Business
A medical terminology dictionary such as Tabor's Cyclopedic Medical Dictionary is a helpful reference - especially when getting started. It's an easy to navigate comprehensive dictionary on health science that includes definitions, examples, color diagrams, charts, and diagnoses.
I've found the the best coding references for Medical Billing are the spiral bound CPT ICD-9 or ICD-10 references. However we've been increasingly using online coding references such as Find-A-Code. These are essential references for our medical billing business. They are easy-to-navigate and laid out in a logical format with illustrations.
The CPT Expert combines codes with billing and Medicare regulatory information in one volume and clarifies annual code changes and rules. These references are also a great help in insuring the correct modifiers are used as this can be a big source of coding inaccuracies - and unpaid claims.
We occasionally find our clients using out of date CPT medical billing codes or situations where the ICD-10 codes don't match the treatment.
Another excellent reference for medical billing specialists is Understanding Health Insurance - A Guide to Professional Billing.It's an excellent source for describing CPT and ICD-9 coding (soon to be ICD-10) systems, managed care, legal and regulatory issues, reimbursement methodologies, coding for medical necessity, and common health insurance plans. It's written in an easy to understand style for the complex issues in medical coding and billing and has several practical examples
Check out some some of the best resources for a medical billing business owner here.
Starting a Medical Billing Business - Licenses and Taxes
Determine the restrictions on operating a business out of your home and what the local county, city, or state license or permit requirements are. I strongly recommend meeting with a local accountant or tax professional first as they are knowledgeable on these requirements. In our city I had to obtain a business license to operate out of my home. It was easy and quick to do.
You may need to get a federal tax ID number which is easy to do. Your accountant can help you determine what type company structure is best such as S-Corp, LLC, Sole Proprietorship. Your local accountant will be familiar with all the local city, county, and state requirements.
Contracts - Get It In Writing
Maybe you've heard the old saying - "If it's not in writing, it didn't happen". A medical billing contract is important in defining the rolls and responsibilities of both parties as well as defining the services provided, pricing, terms, etc. It should also clearly describe the responsibilities of client and Medical Billing Service. If things go wrong, it helps protect your interests as a medical billing business owner.
Starting a Medical Billing Business - Your Services and Fees
There's three ways to charge your clients - by percentage, per claim, or hourly. This should be specified in the contract you sign with your client. The fee you charge is dependent on several factors.
Starting a Medical Billing Business - Persevere
If you notice the people who are the most successful, they are the ones who don't give up. Even if they fail. They get right back up and try again. As with starting any business, perseverance is one of the keys to success in starting a medical billing business.
Here's more general information on starting a business from home.
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