Medical billing can be very expensive.A thorough knowledge of your medical practice, revenue, employee payroll, equipment costs, and other factors is required to calculate the costs of medical billing.You can determine how efficient your practice is, how to improve it, and whether or not using a third-party billing service would be beneficial if you can accurately calculate your medical billing costs.
Step 1: Take into account the factors that contribute to your bill.
To understand the factors that contribute to your medical billing costs, you need to examine all of the steps involved in billing.A list of components and costs can be made using a spreadsheet, database, or other method.
Step 2: To help, use a billing calculator.
If you don't have staff to help you calculate your medical billing costs, you can use an online billing calculator.There are preset categories of billing costs that you can enter values for.To total the sum, you must first.You can get a quick estimate of your medical billing costs with the billing calculator.All cost categories may not be included in your medical billing.You need to double check the calculations for the most accurate cost estimate.
Step 3: You can record the number of doctors in your practice.
It is important to remember how many people are associated with creating and receiving bills.After you review your costs, you might want to have this information.Determine the amount of your yearly or monthly practice receivables.Ideally, your practice would be able to collect this amount for services.Depending on your preferences and accounting practices, you can choose to look at this amount on a monthly or yearly basis.
Step 4: It is a good idea to check the revenue per month or year.
This is the amount collected from paid bills in a given period, which may be equal to or lower than the receivables amount.
Step 5: You can compare these values.
As a percentage of practice receivables, show the revenue received.You can use this number to calculate your billing costs.If your practice has a receivables amount of $1,000,000 in a month, but the revenue received in the same time is $800,000, then 80% of the receivables are received.
Step 6: Understand how billing employees are paid.
The amount of money paid to employees who work on billing receivables and processing is one of the main costs in medical billing.Divide the hourly rate by the number of hours worked.Your medical billing costs are likely to be a large portion of your billing employees' salaries.Find the total paid in salaries for your billing employees if they are not hourly.Determine the costs of benefits.Employers contribute to the costs of employee benefits.You will want to consider the contributions in the overall costs of compensation for employees.The cost of taxes paid for employees should be taken into account.
Step 7: The costs of training and turnover are calculated.
It takes a lot of time and money to teach new employees the processes of medical billing.You could factor training into your overall costs for medical billing.Consider how much time was spent on mentoring, coaching, training, supervision, etc.as well.It should be considered a medical billing cost since it is a use of paid employee time.
Step 8: Determine the costs of software and equipment.
You can use computers, software, technical support or both.For medical bills.When calculating your medical billing costs, the amount spent on initial purchases, maintenance, and support should be taken into account.
Step 9: Cost which are often overlooked, but still necessary expenses for billing procedures should be considered.
The costs may include postage, stationery, telephone, etc.
Step 10: The costs for services contracted to assist with billing should be taken into account.
When calculating your billing costs, be sure to account for the assistance you receive from a billing service or other contractor.If you already use a service to take care of your medical billing, this will be your primary cost.
Step 11: You can find the total cost of billing.
Add all of the factors involved in your medical billing processes together.If you were listing the monthly costs of the factors, then the sum would be your monthly medical billing cost, and the yearly costs would simply be divided by 12.The total of your monthly billing receivables is $1,000,000.80% of the practice's revenue is receivables.Your billing employees are paid $160,000 per month.You think it will cost $10,000 a month to train and supervise.Spending $5,000 a month on computers, software, and other equipment is assumed when you factor in initial costs and service/maintenance.Your costs average over a thousand dollars per month.$176,000 is the total monthly cost of your medical bill.The rest of your revenue is $624,000.
Step 12: The cost of doing your own billing is more expensive than using a billing service.
Third-party services can be used to take care of medical billing.It can make the process simpler and less expensive.Contact one for a quote to find out if using a billing service would be cost-effective.To find out if it is more or less expensive to use a billing service instead of administering your own billing, compare this quote to the estimate of your medical billing costs that you calculated.If your medical billing costs total $176,000 per month, and a service quotes you a charge of $120,000 a month to take care of billing for you, then it is financially better to use the service.If you can reduce your costs by finding a less expensive employee benefit plan, and your total medical billing expenses fall below $120,000, then you should take care of billing in-house.If your medical billing costs total $176,000 per month, and a service quotes you a charge of $180,000 a month to take care of billing for you, then you are better off financially if your practice does it own billing.
Step 13: There are other situations in which using a billing service might be beneficial.
While cost is the primary concern in deciding whether or not to use a billing service, you may want to consider other factors.Is your billing process efficient?In-house billing can sometimes collect more revenue than billing services.You may be able to figure out ways to improve the efficiency of your in-house billing.Do you have a lot of turnover?If you frequently have to train new employees, a billing service may save you some headaches.Do you know how to use technology?Modern billing practices rely on technology.It may be beneficial to use a billing service if you don't like using billing software.You can hire someone who is trained in technical support, information technology, or medical informatics as an in-house specialist.Are you a new doctor?If you are busy trying to get your practice up and running, it might be a good idea to have a service take care of your billing.If in-house billing becomes more cost efficient, you could switch to it later.What are your top priorities?Some medical practitioners prefer to work with patients than worry about billing, so using a service can be a good idea.Some may prefer to do billing in-house if they have a good knowledge of how their practice works.
Step 14: Do you think another fee system would be more cost-effective?
A different fee system can be used to reduce medical billing costs.Some contractors offer more than one plan, and billing services charge different fees.You can negotiate fees with the billing service contractor.A percentage fee system is one of the common fee systems.Once it is collected, billing services are paid a percentage.A flat fee system.The standard charge for each claim is the same.There is a combination of pricing.A flat fee is charged for certain claims.The charge for each claim will be determined by factors such as the patient or insurer.A scale.Depending on the amount collected, claims are charged varying fees.Larger claims may be charged a higher fee than smaller claims.