Have you ever fully assessed the total cost of what it takes for you to get your medical billing done? Likely as not you haven't. Most practices simply think that those costs comprise just the cost of the labor to key in the data. On the surface that could seem correct but nothing could be further from the truth.

Every day you key your own data, your software gets more obsolete. At some point it has to be replaced. That cost has to be incorporated into the formula. The same is true for your hardware. It has to be replaced and before it is replaced there are costs associated with maintaining it and with repairing it during its useful life. The office area set aside to operate your medical billing is also part of that overhead as well as your matching costs for social security, Medicare, unemployment insurance, and other general employee benefits which include but are not limited to vacation time, sick leave, and more. In addition, you have clearing house fees, ongoing software fees, postage for claims and patient statements, envelopes, cost of HCFAs and more. If you have a medical billing person, you are probably paying at least $10.00 per hour. That fee over a month's time equals $1720.00 based on the average of 4.3 weeks in a month. Add to that the matching benefits listed above and that almost equals another $170.00 for a total of $1890.00 per month just for the employee. Again this does not include any of the other overheads mentioned, but all of those figures pale in comparison to the true losses incurred by the practice during the month.

If you have a small practice that collects only $30,000.00 per month, odds are great that at least 10% of your revenues are being written off without your knowledge. That's $3000.00 per month--$36,000.00 per year! And that is in addition to the fees listed above. Your costs are now up to $4890.00 per month still not counting all of those other costs. In addition, you have paid up front for that employee.

If you had a medical billing company doing that work for you and they collected that same $30,000.00 at an average rate of 8%, your out of pocket would only be $2400.00! That is half of what you are paying now. And I guarantee that a competent medical billing company will be collecting that other $3000.00 your office failed to collect because they want that extra $240.00 and even after considering that it comes out as if they are actually paying you $460.00 just for the privilege of collecting your money for you. Your net revenues doing the work yourself was $28,110.00 and after farming it out it goes up to $30,360.00. A net increase of $2,250.00 not to mention the other associated costs and the stress on you of trying to see that the work gets done. Do yourself a favor and do the math.



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