5 key steps to starting your medical billing company
Start your medical billing company off right with these 5 steps.
There has never been a better time to start a medical billing company. The trend toward outsourcing continues to rise as more and more providers seek to streamline their office procedures by working with outside experts.
In Tebra’s recent State of the U.S. Medical Billing Industry report, 62% of providers stated they were optimistic about the future of their industry, and around 90% see the trend towards outsourcing as at least a minor opportunity for growth.
But a successful medical billing company involves more than simply meeting demand. This guide will cover the 5 key steps to starting a medical billing company in 2023 and beyond.
1. Select your medical billing software
One of the most critical aspects of starting a billing company is choosing the correct software system. Many practices and hospitals use different electronic health records (EHRs) and legacy systems that may need to integrate with your billing software. Whichever software you choose should allow you to get started easily, avoid technology breakdowns, and give your practice clients the tools they need to be profitable.
“90% of provides see the trend towards outsourcing as at least a minor opportunity for growth. ”
So, what do you need? While a basic system can simply submit invoices and review insurance claims, you may want a solution that offers practice management support. This not only ensures a more seamless communication relationship with your clients but also gives you room to offer additional services.
Modern medical billing company software
Good medical billing software will help you bill accurately the first time. It should make it easy to get payment information instantly. It should also integrate with your clearinghouse. These factors will save you both time and money.
A modern medical billing system often includes the following features:
- End-to-end claims management
- 95% clean claims submission
- No response alerts
- Denial alerts
- Patient collections
- Credit card processing/credit card on file
- Paper and electronic claims
- Electronic receipts
- Secure online bill pay
Practice management for medical billing companies
The days of separate systems, no transparency, and billing companies that handle nothing but billing are over. Practices today look for more features, such as help with practice management. The ideal billing company is an integrated extension of the practice rather than a separate financial office.
Every feature that helps offices with patient flow and collections will add value to your services and incentivize practices to outsource their billing to you.
Look for the following features when considering practice management modules in your billing software:
- Customizable schedule
- Appointment reminders
- Quick patient entry
- Individual and batch eligibility
- Credit card processing
- Reports and metrics
An integrated EHR will also improve your billing workflow and your practice management support. Integrated EHRs can improve coding and accuracy, eliminate duplicate data entry, increase revenue, and make it quick and easy to manage electronic superbills.
Support for multiple practices
Even if you only serve a single provider to start, it’s important to plan for the growth of your company. A good medical billing system is scalable and has the tools to manage multiple practices over time. It will also have a comprehensive dashboard and one-time login. Best of all, it will be designed with billing services in mind.
2. Create your dream team
The next key to successfully starting your own billing company is to choose the right professional help. In the same way that you provide services for your practices, attorneys, accountants, and insurance brokers will provide services for you. The most important thing to remember is to find professionals you trust and then listen to them.
Outsource insurance and licenses
Double-check the requirements for running a business in your city. Even if you run it out of your home, you need a license to operate a business. The fees and fines for being unlicensed can be steep and could potentially put you out of business before you even get started.
Types of licenses and insurance that you may need include:
- Business license
- Medical malpractice
- Business interruption
- Office contents
- Umbrella policy
- Workers’ compensation
- Employee fidelity bond
Seek legal support
Attorneys are not an everyday part of running a medical billing company, but a legal professional can help you with various aspects of your business, from patient contracts to labor law and state regulations. It’s always good to have an expert you can ask when these complicated topics come up.
An attorney can help with:
- Choosing your legal business structure
- Reviewing your policies/procedures
- Developing or reviewing client contracts
- Reviewing your office lease (if applicable)
Seek financial guidance
Running a business requires a huge amount of financial paperwork, from payroll to self-employment taxes to K1s to 1040s. A good accountant will help you decide on the right structure for your business and keep your company running smoothly.
An accountant can help with:
- Choosing your financial business structure
- Obtaining a tax ID number
- Processing your quarterly and annual business and employment taxes
Select a collections agency
Medical billing companies often refer providers to collections agencies for claims over 120 days outstanding. Research several agencies local to each of your providers, and select businesses that are established and easy to work with. Your contract with your providers should state how the information will flow from your office to the collections agency.
3. Join associations and memberships
Another key part of growing a successful medical billing company is connecting with other similar business owners and colleagues. Participating in some of the industry’s top associations can give you help, guidance, and community.
Healthcare Billing & Management Association (HBMA)
HBMA has thousands of medical billing company owners as members. It hosts conferences and training across the county to help with networking and advocacy training.
- Founded in 1993
- Represents over 47,000 employees at nearly 500 RCM firms and
professional billing departments
- Tools, resources, and a certification and education program
- Dues are based on company size and range from $500 to $1,500/year
American Association of Professional Coders (AAPC)
The AAPC provides education and professional certification to physician-based medical coders and to elevate the standards of medical coding. It even has local chapters, allowing you to network with other medical billing companies right in your area.
- Started in 1988
- Now has over 190,000 members
- Provides education and resources to physician-based coders, including training and several certification programs
- Dues are $170/year per person (discounts for students or more than 6 employees)
American Medical Billing Association (AMBA)
The AMBA provides industry and regulatory education, networking opportunities, and information and ideas sharing for all its members. It also offers a certification program to become a certified medical reimbursement specialist.
- Founded in 1998
- Membership includes in-office billers and billing services
- Offers Certified Medical Reimbursement Specialist (CMRS) certification
- Dues are $199/year with business membership for over 3 employees
Medical Group Management Association (MGMA)
The MGMA is mainly for medical practice executives and leaders. Many of your office administrators and office managers will probably be a part of the MGMA, making it a great resource for networking. The MGMA also provides many studies and surveys that address the market, salaries, and reimbursements.
- Founded in 1926
- Industry-leading practice management group
- Publications, research, resources, education
- American College of Medical Practice Executives (ACMPE certification)
- Dues are $35 to $399 for annual membership
It is very important to get involved and be a part of your local community. The best way to do that is to join your local chamber of commerce or Better Business Bureau. These organizations will not only help you with networking and community projects but also provide a wealth of resources for you as a new business owner.
- Chamber of commerce
- Great opportunities to network
- Helps build reputation/awareness
- Better Business Bureau
- Create trust with potential customers
- Enhance your brand with BBB accreditation
- Access to small business resources
4. Dig into marketing
Sales and marketing are two of the biggest challenges in starting your own medical billing company and an important part of your potential success. Providers that need your services can’t work with you if they don’t know you exist. When just starting out, online marketing offers the biggest bang for your buck (or time, if you’re doing it all yourself).
To get started with your medical billing company marketing, you’ll need:
- Your ideal customer profile
- Marketing plan
- Professional website
- Professional email address
- Professional business Facebook page
- Google Business page
- LinkedIn profile
The next step is to create marketing materials that you can send to your target providers. Once you get your first client, the best advertising is to do an amazing job for that provider. Referrals from happy clients can help to drive success.
5. Create customer paperwork
Now that you know how to get your medical billing company started with a scalable billing system, a great team, a network of industry colleagues, and a marketing strategy to reach prospects, it’s time to get ready for your first client. Prepare your answers to the most common questions you expect to hear from prospects, create a set-up form to use during your first meeting, and, most importantly, create a contract that’s ready to go.
Prepare responses to common questions from prospects
By the time they call a potential medical billing company, most practices are 60% to 80% of the way through their research on which to choose. At this point, they have checked out your website and looked at your Facebook and LinkedIn.
But your real chance to make a good first impression comes during the discovery call. If you can quickly and professionally answer a prospect’s questions, they’ll feel more comfortable with you and, assuming that your company’s expertise and solution can meet their needs, will be more likely to choose you for their billing needs.
- How much do you charge?
- Can you provide references?
- Who owns the data?
- What is the background/training of billers?
- What are your professional affiliations?
- Do you have a compliance plan?
- Who is going to be working on the account?
- How often will you communicate with the practice, send reports, etc.?
- Are most or all services electronic?
- What service don’t you handle? (e.g., past A/R, collections, etc.)
Answer these common questions on your website to give providers one more reason to choose you.
Prepare a standard practice set-up form for your initial meetings with practice managers. This will allow you to gather all the onboarding information you need at one time.
A practice set-up form should cover all the information needed to set up with your clearinghouse and payers, including:
- National Provider Identifier (NPI)
- Employer Identification Number (EIN)
- Location, address, and hours
- Appointment types/times
- Provider Transaction Access Number (PTAN)
- Insurance ID numbers for each provider
- Fee schedules (if they have them)
The most important piece of paperwork to prepare is your contract. It is an outline of how you are going to proceed after the provider chooses you as their medical billing company. Make sure that your contract covers not only how you will begin your relationship but how either party will end it in detail.
Include information on how the provider will get their data from you if they choose to move to another billing company. How are they required to end their contract with you? Is there a 30-day written notice or a 90-day written notice? What are you going to require of them? How long do they give you to collect on claims that have already been sent out? Are there circumstances in which you would end your contract with them, and if so, what happens next? You must consider all of these things when writing your contract.
It’s also important to put in writing what is not included in your billing service. List any services and fees that you are willing to provide that are not part of the standard billing contract.
A standard medical billing company contract covers:
- Terms and conditions
- What specific services the billing company will provide, at what rate
- The pay schedule
- What happens if not paid
- How either party may end the contract
- Responsibilities of each party
- Any additional services
Start your medical billing company off right
These 5 steps can help you jumpstart your medical billing company, set up your workflow for success, and give you the tools you need to grow over time. But if you really want to stay ahead of the curve, it helps to see what high-growth companies are doing, too.