Medical Billing Contract

by Mary

The person that implemented our EMR also does medical billing. My doctors were impressed with her training, so they hired her to do their billing. That was almost a year ago. We have not received monthly financial reports, and our accounts receivable is almost a million dollars. She never returns our call, or gives us reports we request. It’s to the point the doctors cannot pay the staff.

We want to hire another billing company, but our current biller said she will not let us out of our contract. It states 90 days notice and that she keeps the A/R for 6 months. She said if we stop sending her our charges and go with another company she will sue for breach of contract.

Isn’t there a breach on her part by not doing her job? These doctors are in serious financial trouble. She has put their practice at risk. The docs are afraid to pursue legal action. I can’t believe a person could be allowed to do such damage.

Please tell me there is a way out of this.

Thank you!!
Mary Heck

Hi Mary,

My sympathy for having to endure this.

Of course it would depend on the wording in the contract – but you should be able to change billing services without having to worry about them taking legal action. It sounds like the 90 day requirement is the biggest limitation to changing billing services.

I would suggest having an attorney review the contract and advise. Maybe they can advise on a quicker way to get out of the contract. Maybe the threat of legal action on your doctors part would get some cooperation – or just knowing you are consulting with an attorney. But then again you may just want to be done with this biller and move on.

From what you described it certainly sounds like the lack of performance on the billers part would be grounds for terminating the contract. But I really don’t know of any contract that could justify legal threats with a straight face that has such a substantial accounts receivable on top of all the other issues. Most contracts I’ve seen for billing services do not prevent the client from changing billing services, it just requires a timely notice (30 days in our contracts).

If the doctors are in serious financial trouble I would think getting a competent biller on board would be a priority. It sounds like you want to be done with this billing service as quickly as possible.

Just my opinion but her performance – or lack of it – would seem to make it hard for the biller to take legal action. I mean if you told a judge that A/R was a million dollars and the practice was struggling to make payroll because the billing service wasn’t performing – I don’t think the biller would get much sympathy from the courts. But I’m sure your doctors don’t really want to get in a protracted legal battle – they just want to get claims filed and paid for their services. And I’ll bet the biller doesn’t want to get into a legal battle either.

Hope this helps answer your question. Good luck in resolving and hope you can find a good biller soon. I would suggest asking for recommendations from any other providers you are familiar with.