What Does it Cost Me!
How to compare Outsourced billing with In-House billing!
In-house Billing Group Costs v.s. Our Outsourced Costs
- 9% of Collected Claims
- $0.00 Software Licensing Costs
- $0.00 Software Configuration Costs
- $0.00 Yearly Maintence Costs
- $0.00 Yearly Disaster Prevention Costs
- 10% to 14% of Collected Claims
- $6,000 – $10,000 Software Licensing Cost
- $2,000 – Software Configuration Costs
- $1,200 Yearly Maintenenace Costs
- $2,000 Yearly Disaster Prevention Costs
Medicare and insurance companies that follow the Medicare screen have been increasingly stingy with Orthotic and Prosthetic reimbursement. Insurance co-pays and deductibles are creeping steadily higher and no longer is there enough padding to forgive inefficient front office and billing sections. More and more claims are being denied and many offices are suddenly find themselves a non-profit organization. Add on top of this new insurance legislation that will dramatically increase the number of insured patients and many offices will find themselves overwhelmed and loosing money. This does not have to happen if you manage the 2 basic cost centers of your billing operations.
We know that each new client has their own set of needs and past issues. When we take on a new client our policy is to take over all problem claims and get them paid. The average recovery has been equal to over a month of their present gross. This alone has provided many of our clients with extra income, “more than 18% of their gross”. We have noticed that after a few months several of these owners went on vacation, some for the first time in several years.
We have seen a typical increase in income that our clients realize anywhere from a 5% to 12%. If we strictly handle your claims you may see a 9% increase. If we handle your claims and patient collections we have seen an additional 8%. The bottom line most often pays for the entire cost of our service. That means you get an expert billing department at no cost.
“How do we get our numbers for Costs?”…
CPO Services has been able to compile an accurate analysis on both facility basic costs and claim loss costs from years of experience in the O & P billing field across multiple practice types. These figures come from what we initially experience after signing up a new client to when their billing is running smoothly with us. We also keep improving our internal performance and have developed our own evaluation systems that result in the following analysis.
“The two cost centers of your billing operation”
Basic or Facility Costs
Claim Loss Costs
What are the “BASIC” or Facility Costs?
An in-house billing group will cost the practitioner anywhere from 10% to 14% of their gross income. These percentages do not take into account the cost of the practitioner overseeing or managing the billing personnel. It has been our experience, that not one of the practices we have helped, realized the actual cost of their billing department until after they relied on us to help them. Many practitioners incorrectly compare our 9% cost of collected claims to the hourly wages of their billing personnel and neglect to take into account the money they are losing from an inefficient billing process.
Billing Personnel Costs
Personnel costs are comprised of the hourly or salaried rate you pay your employees over a specific time period and the associated payroll taxes that the employer must pay. The other cost to consider is how much you pay for the software and hardware that is used to provide the capability for you your staff to process claims. Software costs are comprised of one time purchases and any monthly or upgrade fees that the software provider may require over time. Hardware costs are comprised of the upfront cost of your computer and ongoing maintenance and support needs to keep the computer usable.
A practioner’s earning power is about $200.00 per hour, an office manager is about the same. CPO Services is designed to be internally managed and act as backup for you and your managers. We keep improving our service at no extra cost to you.Remember unlike fixed payroll costs our is fee is directly tied only to the claims you collect and not to the process to collect them. The result is a true WIN WIN. The better we are at collecting your claims the more money we both make. This system provides built in incentives for both of us to help you become more successful.
What are the “Claim Loss” Costs?
The real cost we attack is the loss of income from incomplete claims collection
Insurances to be price competitive contain costs in several ways.
Co-pays and deductibles: 20%-22%
Private insurances package their coverage mix to at least mimic the 20% Medicare deductible. If individuals have secondary coverage private insurances do not automatically cross over. If you do not have an efficient and aggressive collection system a large part of that cost is yours
Remittance Losses: 4%-8%
Claims are normally paid but not totally. Insurances pick single line items they demand extra paperwork and give a fairly short time window for correction.Neglected you pay the cost.
Insurance Verification and Prior Approval Cost: 5%to16%
Insurance verification and obtaining prior authorization must be done by the front office immediately. It is the practitioners responsibility to obtain verification and prior approvals but we can help you with obtaining the right contacts. Insurance companies often use specialized web sites for prior authorization and front offices must be able to find and use them. To stop this cost you can rely on us to help you get the information you need.