billing company costs

[militarymd]

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For those of you in PP who use a billing company....what's your net cost of billing?

My company charges 7% of collected revenue.

What's everyone else getting taken for....and if it's a lot better than my company, can I use your company?

 

[jetproppilot]

For those of you in PP who use a billing company....what's your net cost of billing?

My company charges 7% of collected revenue.

What's everyone else getting taken for....and if it's a lot better than my company, can I use your company?

At my goldmine gig, Mil, we employed our office, owned our building.

Our cost was under 5%. But over 4.5%.

Doesnt seem like alot initially, but....uhhhhh.....if 7% is the benchmark we're looking at, a savings of 2.5% on a 6 million dollar company added about 30K to each of our five partner's salaries....but that wasnt the best part....

You can buy a building with a loan secured by your company... under a separate LLC....then charge "rent" to your anesthesia company, which pays your other company.....

.....you can hire people who work for YOU.....maybe you can lure some people from your current billing company....thats what we did initially....

billing was more efficient, AND we built equity in commercial real estate that the partners owned.

The equity in commercial real estate, that we paid for by paying "rent", turned out to be alotta coin, which I got 1/5 of in my buyout.

Is your company at a point where you could consider internal billing?

Theres alotta advantages IMHO.

In addition to the above monetary gains, our office people spoiled us rotten.

I didnt realize how good I had it with all the intangibles until I left.

During my eight years there, our office

1)took care of all my doctor licensure, insurance company applications/updates paperwork

2)Had my company H2 🙂D) washed weekly, took care of all maintenance on vehicle

3)Brought partners lunch from wherever we wanted to eat

4)Paid all bills applicable to company (licensure, vehicle, beeper, cell phone, company credit card)

5)Took care of travel arrangements for CME travel

I could go on and on.

Bottom line is these people worked for us...and they took care of us....which equated to more personal time devoid of taking care of menial things....

Man, I miss that.....

 

[militarymd]

Jet,

you're right on the money there.

That's EXACTLY what I'm contemplating.......it's the hassle factor that I'm contemplating...versus savings in money.

 

[jetproppilot]

Jet,

you're right on the money there.

That's EXACTLY what I'm contemplating.......it's the hassle factor that I'm contemplating...versus savings in money.

Heres some more of the invaluable intangibles:

3,945) If I was on a committee, they reminded me the day before of the meeting time.

3,946) If I wanted to go to the gym devoid of babysitter, our office had a "toy" area where a little gorilla could have some fun in a supervised environment without alotta intervention

3,947) If I had a personal errand to run but was tied up at the hospital, said errand was done. Didnt happen often....maybe twice a year....but man, I tell ya...

3,948) Ya know ALL the mail you get? I never saw it. I only saw the important stuff. Our office took care of our mail.

3,949) HAVING A PERSONAL ASSISTANT?...PRICELESS.

I really couldnt put a pricetag on the extra enjoyment I got outta life due to the fact that our office took care of so much of our personal menial stuff.

It was truly a priceless experience.

 

[militarymd]

our billing company already provides us with a body on sight who does all that stuff, so you're preaching to the choir....

it's the $$$ savings that I'm wondering about.

 

[jetproppilot]

our billing company already provides us with a body on sight who does all that stuff, so you're preaching to the choir....

it's the $$$ savings that I'm wondering about.

30-50K of income you don't have right now is, well, 30-50 K that you could gain...annually......thatcha don't have.

 

[jetproppilot]

our billing company already provides us with a body on sight who does all that stuff, so you're preaching to the choir....

it's the $$$ savings that I'm wondering about.

I hear ya....

But I guarantee you....you arent experiencing what I experienced....regardless of what that one body is doing....

we had five.

 

[Pilot Doc]

I don't know, but I've been told ....

A billing company, whether it charges 5% or 7%, is only interesting in collecting a dollar for 5 cents, or 7 cents, whatever the number is. Your billing company, on the other hand, wants to collect every dollar, even if it costs 50 cents. Under that theory, your own billing company may bring in more $$ even if it's cost/$ is equal or greater to a for profit company.

 

[jetproppilot]

I don't know, but I've been told ....

A billing company, whether it charges 5% or 7%, is only interesting in collecting a dollar for 5 cents, or 7 cents, whatever the number is. Your billing company, on the other hand, wants to collect every dollar, even if it costs 50 cents. Under that theory, your own billing company may bring in more $$ even if it's cost/$ is equal or greater to a for profit company.

AND THATS A WRAP, MY FRIENDS.


now we can talk about what kinda tequila you like...or in Mil's case, Vodka...

 

[Tenesma]

i hate to say this but you can hire a personal assistant for $8/hour fresh out of high school - turn them into your little gofer for everything....

what a sweet life to live -

 

[jetproppilot]

i hate to say this but you can hire a personal assistant for $8/hour fresh out of high school - turn them into your little gofer for everything....

what a sweet life to live -

OR

you can encompass it into the practice you already live,

AND add money to your bottom line that you arent current-day incurring,

AND you can buy commercial real estate within the deal.

Its worth, at least, considering.

I'll speak the obvious, too....

Tenes, an eight dollar an hour employee will give you what you've paid. Which aint alot.🙄

Gimme a break, Dude.

 

[jetproppilot]

Jet,

you're right on the money there.

That's EXACTLY what I'm contemplating.......it's the hassle factor that I'm contemplating...versus savings in money.

Seems like, if your gross-bottom-line is big enough, you could reduce hassle factor AND save money.......not VERSES....

 

[Noyac]

Mil,

Our administrators just changed the billing company again for the 3rd time in my 5 yrs here. I think this one charges 4% and 5% for AR's left over from the past company.

Jet,

How many Doc's were there in your goldmine gig? That sounds exactly like my gig in La as well. You know the one.

 

[jetproppilot]

Mil,

Our administrators just changed the billing company again for the 3rd time in my 5 yrs here. I think this one charges 4% and 5% for AR's left over from the past company.

Jet,

How many Doc's were there in your goldmine gig? That sounds exactly like my gig in La as well. You know the one.

Yeah, I know.

You guys had way many more MDs than us.

We had five guys.

I think we've spoken about what I made.....which was alot....but still about a hundred large less than what you guys made as partners.

 

[Noyac]

Yeah, I know.

You guys had way many more MDs than us.

We had five guys.

I think we've spoken about what I made.....which was alot....but still, from what I understand, about a hundred large less than what you guys made as partners.

Only 5 guys. Thats good news. We are 7 and contemplating do this very thing.

 

[militarymd]

Yeah, I know.

You guys had way many more MDs than us.

We had five guys.

I think we've spoken about what I made.....which was alot....but still about a hundred large less than what you guys made as partners.

you had 5 guys and had 5 people in your office? Seems like a lot of people...

the group I looked at in AZ that does their own in house billing and scheduling and credentialling and auto leasing and everything under the sun you can thing off...had 60+ partners and the office staff was less than 10.

 

[jetproppilot]

you had 5 guys and had 5 people in your office? Seems like a lot of people...

the group I looked at in AZ that does their own in house billing and scheduling and credentialling and auto leasing and everything under the sun you can thing off...had 60+ partners and the office staff was less than 10.

Yep. 5. Don't know what else to add.

 

[core0]

you had 5 guys and had 5 people in your office? Seems like a lot of people...

the group I looked at in AZ that does their own in house billing and scheduling and credentialling and auto leasing and everything under the sun you can thing off...had 60+ partners and the office staff was less than 10.

The practice I was with had 6 billers for 8 docs and 4 PAs with lots of billing for procedures. They also did the credentialling but don't provide all the other "benefits" that JPP's provided. Hopefully someone in your office belongs to MGMA. There was an article on dealing with private billing companies in their January issue (for demonstration purposes. You need to belong to look at it).
http://www.mgma.com/solutions/landi...48&id4r=16950&id5l=16954&id5r=16956&id6=16958
If you don't have any one that belongs I have a discount coupon that I can email you. The group I was with is in the top 10% of GI for reimbursement. They looked at it carefully and felt it was definitely worth it. Its not only about what you pay but also about having control over your billing. When they used an outside company the practice manager noticed that there was some cyclical nature to their overdue collections. He figured out when they took on a new practice which left them understaffed, they would not fight the denials as hard. You don't just save money, but you make more money.

David Carpenter, PA-C

 

[coprolalia]

As Janet Jackson once so eloquently put it, professonal billing is all about Control.

It seems it would be better to have as much control as possible over your own financial doings, but (just like hiring a good gasser to enter your practice) you gotta trust the people who are working for you. You gotta oversee what they do. You gotta keep your nose in the books constantly.

Some people don't want that extra hassle, even if it gets them an extra $30k per year.

-copro

 

[militarymd]

Yes, we have 2 members who belong to the MGMA...the data is very extensive and can be difficult to sort through...

but we do use it extensively in our negotiations...

The practice I was with had 6 billers for 8 docs and 4 PAs with lots of billing for procedures. They also did the credentialling but don't provide all the other "benefits" that JPP's provided. Hopefully someone in your office belongs to MGMA. There was an article on dealing with private billing companies in their January issue (for demonstration purposes. You need to belong to look at it).
http://www.mgma.com/solutions/landi...48&id4r=16950&id5l=16954&id5r=16956&id6=16958
If you don't have any one that belongs I have a discount coupon that I can email you. The group I was with is in the top 10% of GI for reimbursement. They looked at it carefully and felt it was definitely worth it. Its not only about what you pay but also about having control over your billing. When they used an outside company the practice manager noticed that there was some cyclical nature to their overdue collections. He figured out when they took on a new practice which left them understaffed, they would not fight the denials as hard. You don't just save money, but you make more money.

David Carpenter, PA-C

 

[kmurp]

So what is a good number (as a %) for overhead costs. By that, I mean ALL overhead as calculated by MGMA. That is billing, accounting, legal, malpractice, benefits administration (not the actual cost of provider benefits), practice management etc. The MGMA excludes the costs of anesthesia providers form this number, and they say, if I recall correctly, that the median overhead cost for an anesthesia practice all in is somewhere around 10%. Does this seem reasonable to you guys? Ours is currently higher than that; we do carry extra overhead due to our pain management nurses, and run our own office. And yes, it is convenient, they do a good job meeting or exceeding MGMA benchmarks, but we often wonder if we can still afford them.
When I recently checked on just billing/credentialling costs, I was quoted 5% from two anesthesia only companies.

 

[militarymd]

the billing company is essentially the only overhead we have....other than miscellaneous stuff...like pagers, etc...

so we're definitely below 10 percent....

I figured that billing costs is usually the majority of anesthesia group's overhead...that's why I'm asking.

 

[Tenesma]

who pays your malpractice insurance, group disability insurance, etc..?

 

[kmurp]

Well, to compare apples to apples (if you wish) for yourself vs. MGMA numbers, one needs to include malpractice as an overhead expense. Accounting,a practice manager-if you have one, accounts payable, payroll services, if you have a defined benefit plan you would include those administrative costs, lunches,pagers, cellphones rent, supplies and R.N. salary/benefits if you run a pain clinic, benefits administration (we pay a company to manage the self insured portion of our high deductible health insurance plan) etc.. Our group would have great difficulty meeting the 10% number. I just wonder how others do it. CRNA and physician salaries and benefits are not included in the MGMA operating cost calculations-if you have your own billing/administrative operation, those employees benefits are included in overhead.

I looked again at the 2006 MGMA survey, and the median operating cost as a % of revenue is 11.6%. Malpractice cost is quoted as 2.73% of revenue and is, as I said, included in operating cost. Disability insurance would be considered physician compensation as would health, dental, CME, retirement, and of course, salary. CRNA salary and benefits are considered separate from operating costs in the survey. A groups % cost on that would, of course, directly relate to the relative numbers of CRNAs used. It gets to be a pretty big % when you use alot of CRNAs.

 

[militarymd]

Well, to compare apples to apples (if you wish) for yourself vs. MGMA numbers, one needs to include malpractice as an overhead expense. Accounting,a practice manager-if you have one, accounts payable, payroll services, if you have a defined benefit plan you would include those administrative costs, lunches,pagers, cellphones rent, supplies and R.N. salary/benefits if you run a pain clinic, benefits administration (we pay a company to manage the self insured portion of our high deductible health insurance plan) etc.. Our group would have great difficulty meeting the 10% number. I just wonder how others do it. CRNA and physician salaries and benefits are not included in the MGMA operating cost calculations-if you have your own billing/administrative operation, those employees benefits are included in overhead.

I looked again at the 2006 MGMA survey, and the median operating cost as a % of revenue is 11.6%. Malpractice cost is quoted as 2.73% of revenue and is, as I said, included in operating cost. Disability insurance would be considered physician compensation as would health, dental, CME, retirement, and of course, salary. CRNA salary and benefits are considered separate from operating costs in the survey. A groups % cost on that would, of course, directly relate to the relative numbers of CRNAs used. It gets to be a pretty big % when you use alot of CRNAs.

I hadn't added retirement....if I had added a fully funded 401k...we're right around 10%

 

[urge]

hey Mil, in the private practice setting, who pays for the anes techs and supplies like ett, tape, drugs, etc..? Are the pts billed for supplies?

 

[militarymd]

hey Mil, in the private practice setting, who pays for the anes techs and supplies like ett, tape, drugs, etc..? Are the pts billed for supplies?

in our environment, the patients get charged for all the stuff...bags of fluids, ett, drugs, etc.

Hospital pays for the techs and crnas.

I don't know how it works at other places.

 

[CanGas]

Wow, you’re paying 7% of reimbursed fees!?! Yet another nice reason to have a single payer system.

I’m a senior resident here in Canada but am eligible to perform locums in an undeserved Province while on vacation time.

My last locum experience this spring:

2 week locum billings - $23,853 Cdn
Billing agent charged $1.5 per submitted code
2 weeks = 125 submitted codes * $1.5 = $211.88

Expense as a percent of fees = $211.88/$23,853 = 0.89%

# of rejected claims = 0

That’s a heck of a lot better than 7%

Also check out that income. I worked like a dog but that is $47,706/month and that’s at a Cdn dollar at par to the USD. Not bad for socialized medicine eh? CMPA malpractice (we have a single malpractice insurer for every Canadian MD) for anesthesia is between $2500-$5000/year depending on the Province without worrying about tail, losing coverage when changing provinces, ect.

As for overhead, what is that? Hospital pays for everything 🙂

Just thought I’d describe the Canadian situation for you.

 

[Tenesma]

son of a gun... canada is sounding pretty sweet...

 

[militarymd]

Wow, you're paying 7% of reimbursed fees!?! Yet another nice reason to have a single payer system.

I'm a senior resident here in Canada but am eligible to perform locums in an undeserved Province while on vacation time.

My last locum experience this spring:

2 week locum billings - $23,853 Cdn
Billing agent charged $1.5 per submitted code
2 weeks = 125 submitted codes * $1.5 = $211.88

Expense as a percent of fees = $211.88/$23,853 = 0.89%

# of rejected claims = 0

That's a heck of a lot better than 7%

Also check out that income. I worked like a dog but that is $47,706/month and that's at a Cdn dollar at par to the USD. Not bad for socialized medicine eh? CMPA malpractice (we have a single malpractice insurer for every Canadian MD) for anesthesia is between $2500-$5000/year depending on the Province without worrying about tail, losing coverage when changing provinces, ect.

As for overhead, what is that? Hospital pays for everything 🙂

Just thought I'd describe the Canadian situation for you.

how much taxes do you have to pay?...or a better question...how much of that 47,706 do you get to spend?

 

[Tenesma]

dude - it can't be worse than how much i spend in taxes

i am close to 48% (federal, state, property, etc...)

 

[urge]

here in Canada
My last locum experience this spring:

2 week locum billings - $23,853 Cdn
Billing agent charged $1.5 per submitted code
2 weeks = 125 submitted codes * $1.5 = $211.88

Expense as a percent of fees = $211.88/$23,853 = 0.89%

# of rejected claims = 0

That’s a heck of a lot better than 7%

Also check out that income. I worked like a dog but that is $47,706/month and that’s at a Cdn dollar at par to the USD.

Good for you. Although, weren't you the guy who would give 5mg of labetalol and charge for "Controlled Hypotension" and other scams of that sort? I remember you.

We don't do that in America. We are honest people. We like guns and killing people, but we are honest.

 

[militarymd]

dude - it can't be worse than how much i spend in taxes

i am close to 48% (federal, state, property, etc...)

you either need a better accountant or you need to move to a different state.

 

[CanGas]

For those who asked my tax rate last year on $72,000 (resident salary + 2 weeks locum) = $28% but that was with RRSP deductions.

You can look at Canadian Marginal tax rates at: http://www.morningstar.ca/globalhome/MarginalTaxCalculator/index.asp

Pick a province, plug in your current income and it will give you your anticipated tax rate. Keep in mind that these taxes include your health insurance so when comparing what you pay in the US for taxes factor in you and your families health insurance premiums as well.

Urge, as for calling me a scammer, you already said it before and I think I did a pretty good job of refuting your points. For those interested in reading the post Urge is talking about you can find it here:
http://forums.studentdoctor.net/showthread.php?t=486812

We already discussed this in the other post. The billing manual states "when using a specific technique to produce hypotension in association with an anaesthetic, the units will be increased". No statement of surgical types. No definition of hypotension. I personally used a BP 20% below pre-induction value and only used this code for procedures where this may be of benefit. Ie. total hips, total shoulders, major OMF surgery. If I get this with 5mg of labetalol I damn well WILL bill for it. Urge, you are welcome to leave money on the table but I think if we poll the other people who bill in this forum, if there is a code and you did the work, I bet the majority are going to bill for it.

Good for you. Although, weren't you the guy who would give 5mg of labetalol and charge for "Controlled Hypotension" and other scams of that sort? I remember you.

We don't do that in America. We are honest people. We like guns and killing people, but we are honest.

I'm just trying to broaden the horizon of this forum to describe what the situation is like in the world of Anesthesia outside of the USA, both medically and financially. Read some of my other posts, I'd prefer it if you did not call me dishonest as I certainly don't feel it is warranted.

CanGas

 

[militarymd]

No wonder I've never met a Canadian anesthesiologist.