Examples to explain fees depending on:
• Extensive Follow-Up
• Billing Services delivered for 5% collection rate
Let’s say we process a claim, for which the billed amount is $1,500, performing all the necessary billing steps but the insurance keeps denying for reasons that are out of our immediate control.
At this point, on top of the work already done for the encounter/claim, we should:
Analyze the claim, recognize and verify the denial, consider the benefits, evaluate the explanation of benefits, validate the expected reimbursement, call the insurance company for reprocessing and even appeal the claim for whatever reason, follow up on the claim status until payment is received, and only then we can proceed with posting the payments and move on to next applicable steps.
In doing just these extra steps we would have to allocate resources and employees, right?
Now let’s say the extra work is equal to 3 hours of work and let’s say we pay the employee $18/h which would correspond to about $28/h by the time we consider other aspects and resources involved such as taxes, software license, IT, etc.
The extra steps would cost approximately $28×3 = $84.
Now, at 5% collection rate, a hypothetical $750 of the allowed amount would correspond to $37.50 for MMB.
In this scenario, MMB would run at a loss of $46.50 for the extra effort of collecting.
As you can see the loss is considerable even though we are taking into consideration 5%, not to mention less than that!
As a result, it would be an unrealistic expect or demand to collect as much as we can by paying low percentages, and this concept applies to the negotiation of claims, litigations, and arbitrations, old uncollected claims, patients’ hard collection, extensive follow-up, etc.
In the same way, our clients deserve to get paid for the services provided to their patients we also deserve to get paid for our work, especially when this work is needed to collect for them!
After all, no one would like to work for free, right?
I believe everyone knows that say: “You get what you pay for!”