Is $5 A Claim Fair?

by Tammy
(Conway Arkansas)

I do independent claims for an MD that does not file claims in her office. The client pays me $5.00 per claim regardless if this is a new patient or an old patient. Is this a fair rate?

Response:

It really depends on your costs and how much effort is necessary. I’ve heard $5 per claim frequently used as sort of a benchmark for paying on a per claim basis.

You may want to do a quick accounting to determine what this client costs you to service them divided by how many claims you process for them. This will determine your cost per claim. Probably the biggest costs I’ve seen are software & hardware, any monthly or annual maintenance, postage, and clearinghouse fees. Postage is primarily in mailing patient statements - and believe me this can add up. I’ve spent several hundred $ a month on patient statements for a busy client before - which was really out of hand but that’s a whole other topic I don’t want to bore you with.

For example if you use a reputable online service, you can serve one provider for about $200/month typically. If you own your own software and server it’s more complicated because you have a big upfront cost and periodic maintenance - like upgrades, back-ups, periodic tech support, etc. But you can probably estimate a monthly cost.

Typical monthly expenses for this example:

• Software & Hardware


• Clearinghouse: $100


• Postage: $250


• Office Supplies: $100


• Reference Material: $40


• Business Taxes: $25


• Misc. Overhead: $100

This is just a simple example - just trying to cover the obvious. If you have an office you also should consider overhead expenses such as: lease, utilities, taxes, accountant, advertising, etc. I’ve lumped all these into “Misc. Overhead” for our example above.

For this example your costs would be $815 per month to serve this client. This isn’t unreasonable for a fairly busy practice. If you process on average 120 claims per week, or about 500 per month, your cost per claim is: 815/500 = $1.63 per claim. So your net income from this client would be:

500 x $5 - 500 x $1.63 = $1,685 per month net

I guess you would need to determine if numbers you end up with is adequate compensation for your time and effort - and that would depend on the services you have contracted with this client. If its only filing the claim with no follow-up, payment posting, or patient statements that sounds like a real good income. If there are a lot of new patients that could require more or your time also.

There’s also an ebook that discusses more pricing options called Pricing Your Medical Billing Service written by Alice and Michele of Solutions Medical Billing up in New York.

Hope this helps answer your question.