Starting a Medical Billing Business

Most medical practitioners including doctors are so focused on their patients that they tend to ignore the remuneration aspect in their practice. They can either employ staff or hire billing professionals to attend to these problems. The rising demand for medical billing professionals has led to a shortage of existing professionals, resulting in an opportunity for starting a medical billing business.

Medical billing business

Medical billing service is all about a business cycle linking doctors, health care providers, patients, insurance companies, and to an extent, even the government. This business is about obtaining payments for service provided by any medical professional to a patient, from the insurance company or the government, through an insurance claim. The process starts with the submission of a medical billing claim to the insurer which is followed up, until monetary compensation is received from the insurance providers.

Medical billing has become big business leading to a competitive environment among service providers. Even though, there are many players in the market, offering right from basic to advanced services, there is still room for home-based professionals. This profession can be followed part-time or full-time, thus creating an opportunity for earning some extra income. A home-based medical billing business is possible, as a sole proprietary concern or even a small, established business.

Medical billing outsourcing as a work from home business requires lesser investment than other types of business. Investments on infrastructure will be as good as non-existent, though some investment will be necessary for acquiring professional training, as the medical billing and coding business requires technical knowledge. The problems of starting a new medical billing business, are much fewer than for any other type of business.

How to start a medical billing business

Starting a new business requires research and planning, to identify various factors that can influence the business. Some factors related with starting a medical billing business are as follows.

Market: The target market for a medical billing business will include family physicians and specialists such as pediatrics, osteopaths, obstetricians, oncologists, mental health practitioners etc. Medical practitioners are not just limited to doctors, as social workers, nursing homes, ambulance services, pharmacists and some medical equipment providers are also considered as medical professionals.

Previous experience and contacts among medical professionals is also taken into consideration. Many business opportunities are generated through contacts and previous experience. A segmentation of the market, according to the specialization and the size of business generated needs to be researched.

Start-up: The cost of setting up a business can be minimized with some effective planning. Instead of a big start-up, where there is a need to invest in an office, one can easily initiate a work from home medical billing business. Basic investment expenses will, of course, have to be incurred to purchase equipment, such as a computer system with a modem, a printer and fax machine, reference material, a phone with voice mail or answering machine, stationery, office supplies and postage.

Medical billing software is a very important factor in any medical billing business, so it should be selected through deliberate study. A clearing house, in turn, does the job of transmitting the medical claims electronically, to the insurance companies. They usually charge fees, according to the type of work they process. A sign-up fee for registration with the doctor, may also be needed.

Operation: Careful attention needs to be paid to many aspects of a business needed for the successful running of a business. For medical billing, a medical coding process which includes entering patient information, name of the referral source or physician, and CPT codes and ICD-9 codes from the superbills and day sheets is required and these can be acquired through professional training. Efficient medical coding is required for swifter medical billing processing.

Income & Expenditure: Revenue from medical billing depends on the size of the business. The flow of the clearance of bills depends upon the relation between the doctors and the clearing house. There are three ways of charging a client and they are as follows.

Percentage based
Clients are charged with a percentage fixed on the actual amount, which is collected every month. The percentage varies according to the current market rate, conditions made by the doctors and the number of patients.

Claim based
Clients are charged with a fixed percentage, on the amount of claimed bills. This way of billing is the most-preferred by both the parties.

Time based
Clients are charged a specific rate on the time spent on the billing process. This process is the least preferred by clients and hence, is applicable to providers with a low billing rate.

Advertising and Promotions: Most medical billing processes are advertised through client referrals, networking or by direct contact. Doctors can help by referring patients to other doctors. There can also be a direct approach to doctors with specific specialization and also those who are personal friends.

License: If you set up your medical billing work from home, then a license for home based business is required. Without this license, no home based business can be started.

A medical billing business as a side business or even a full-time job is an excellent method for the generation of income, and it comes without much capital expenditure. So, if you are looking for a comfortable and flexible way of earning, then starting a medical billing business will be a well-made decision.