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  • Writer's pictureRose Sims

Flat Rate vs Percentage Based Billing

Updated: Jul 17, 2019





What’s the difference anyway and why do I really care?





 

If you’re outsourcing your billing this can greatly affect the revenue of your practice.


First of all what is flat rate billing and what is percentage based billing?

  • Flat rate billing is when you pay an agreed upon amount per claim filed on your behalf by your biller.

  • Percentage based billing is when you pay your biller a percentage of what is collected on your behalf.


When you pay a flat rate for your billing to be handled one usually will pay a flat rate per claim filed. At first this may seem the most cost-effective and simple way to handle your billing.


Let’s look at this and its ramifications. While it may appear that you’re saving money paying a flat rate per claim, especially as you can fit multiple days of service on a claim form, the opposite is in fact reality.


  • By squeezing multiple days of service onto one claim from to “save you money” it is in fact putting you at risk! Depending on how often that patient comes in, not filing a claim as quickly as possible can put you at risk due to the timely filing factor of the insurance company. If the claim is missing something, such as the patient’s DOB, or needs to be corrected you will have less or no time in which to do this.

  • By putting multiple days of service on a claim may also put slows on you being paid for services rendered. Who likes waiting longer than necessary for money to come in?

  • Another factor that I really don’t like on flat rate billing is it does not push the biller to ensure that the claim is filed correctly as even if insurance doesn’t pay you, you will still have to pay the biller! The biller doesn’t have the same level of accountability and incentive that is there with percentage based billing.


With percentage based billing you get what you pay for! This really gives your biller the pressure to do a good job. You’re paying for more than getting a claim filed. You are paying for the claim to be filed correctly and followed-up on. If denied the biller will re-file as necessary. The biller will focus on follow up, collections and denial management.


Now there are times when a flat rate is more appropriate, such as sending out patient invoices, or an hourly rate for handling an aging A/R.


I hope you found this helpful and gave your some insight on what to consider in regards to handling your billing. If you have any questions on this or anything regarding billing I’m happy to answer questions so give me a call! (727) 275-0301.


Yours in health,

Rose Sims



Rose is the owner of Exceptional Billing, a professional external billing service with extensive experience in integrated healthcare, urgent care, physical therapy and chiropractic. We are here to increase your collections, decrease your denials, and to help you have a prosperous practice.




 

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