Medical Billing Salaries

How much should medical billing salaries be? This is one of the most common questions a new medical biller will ask. How much do I charge? This article addresses some of the issues related to that important question.

There are several methods used to calculate medical billing salaries or fees. (This term is really a misnomer because your reimbursement is not really a salary). Most medical billing services calculate fees based on a percentage of the monthly receipts. Others charge an amount per claim (anywhere from $4-$10 per claim). If the account has little variation, some billers will charge a flat fee.

In some states it is illegal to charge a percentage of receipts because it is considered fee splitting. Of course, be sure to verify this with an attorney. If you operate in one of those states, you can consider a flat fee of per claim charge instead.

Regardless of the method used, calculating your rates is a big challenge for a new medical biller with no experience. To learn the steps to make this calculation, purchase my ebook on How To Do Medical Billing. It is very reasonably priced and includes: sample marketing postcard, contract, and forms you can modify and use yourself.

Before you dive into the particulars about medical billing salaries, the following is some general advice about negotiating with and collecting fees from providers:

Working With Providers

  • If you have a very small account, consider charging a minimum fee. If you are being paid on percentage or per claim fee basis, a very small account hardly seems worth it. Still, even a small account may lead to a bigger one because word of mouth is everything. Remember that your service has value so be sure you charge enough to make it worth your while
  • Providers have a tendency to want to exclude items from their fees. The most common example is the request to exclude co-payments collected in the office from the total collections. Or dermatologists who want all non-insurance cosmetic procedures excluded from their fees. I'm not saying you shouldn't do it especially if you are just starting out. But sometimes the administrative overhead just isn't worth it. If you want the account, you could agree to the terms on a 3-6 month trial to see how it works out, then renegotiate.
  • Practices want to feel that they are getting their money's worth and will sometimes ask you to do extra work outside the scope of medical billing. And human nature being what it is, the more you do, the more you are expected to do. That is why it is important to spell out in your contract the tasks you agree to perform. There is certainly no problem with charging them an extra fee for additional services performed.
  • If you have a prospect that you feel will be too dysfunctional and high maintenance, don't be afraid to walk away. There are other clients that will appreciate your talents.
  • If a client is having difficulty paying you, start collecting your fees twice a month. Don't allow a client to become too delinquent because you are likely to lose out. Rule of thumb; if you are not being paid, stop working.

Medical Billing Salaries by Specialty

One of the easiest ways to determine what percentage or per claim rate to charge is to call established medical billing services in your area and ask them what they charge. Naturally, an experienced medical billing service with a lot of clients is going to charge more than you will when you are just starting out.

Just to give you an idea, listed below is a percentage range for several specialties. Keep in mind that these percentages will vary depending on where you are located. The purpose of this list is more to demonstrate that some specialties command a higher percentage (or per claim rate) than others.

  • Anesthesiology 5-7%
  • Audiology 10-12%
  • Chiropractor 10-12%
  • Dermatology 5-7%
  • Family Practice 10-12%
  • Internal Medicine 7-9%
  • Physical Therapy 6-8%
  • Podiatry 7-8%
  • Prosthetics & Orthotics 5-7%
  • Psychiatrist 6-9%
  • Surgeon 4-7%
  • Urology 6-8%

Here are some other guideslines to follow:

What’s the type of practice?

The type of practice is important in determining your percentage or per claim rate. Things that affect the billing and reimbursement are the number of procedures per visit and the reimbursement per claim. For example, a family practice has lots of patients with a variety of procedures and lower reimbursement per line compared to a surgeon who has less procedures and higher reimbursement per line item.

Chiropractors and physical therapists have overall good reimbursement because they have a high volume of patients and do multiple procedures per patient. The coding is straight forward but the reimbursement per procedure is low.

Surgeons see less patients and have high reimbursement per claim. The coding for this type of practice can be more complex with more appeals. Patient collections may require more payment plans.

Anesthesiologists have high reimbursement , however, they are usually not contracted with insurances and patient collections is more of a challenge.

Dermatology, urology, orthopaedics are examples of specialties that have good reimbursement.

An audiology practice has authorization requirements and detailed paperwork. Prosthetics and Orthotics are big ticket items but require authorizations and have a high appeal rate.

How many patients does the provider see?

Obviously, a part-time provider will not have as much reimbursement as a full-time provider so the percentage should be slightly higher.

There is an administrative overhead cost to medical billing that is offset by claim volume. If the claim volume is low, the administrative cost is greater.

What is the insurance mix?

Does the provider have a lot of HMOs? That means authorizations have to be checked. Are there a lot of workers’ compensation claims? Those claims usually cannot be sent electronically and may require attachment of chart notes.

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