Pricing your medical billing services can be intimidating and when starting up a common desire is to reduce prices to get your foot in the door which can be a big mistake.  A cheap price can bring in the wrong client who will dump you the first sign of a price increase.  Also if price is the only thing you are competing on, then you are going to have a hard time justifying making anything close to a living at this business. 

As a medical billing company, your income is derived from collecting what is owed to your client.  If you can't get them money you probably won't get paid, unless you are also providing other services which are detailed in a contract. 

You also need to realize that a one type pricing structure doesn't work for all of your clients, no matter how nicely it fits on your brochure.  You will find that there are no two practices that have the same needs and requirements and this is a way to differentiate yourself from the competition.  A few questions to ask a provider include:

Will there be a lot of new patients?  Established patients cost less in time and money to input as the demographics are already in the system. 

• Will you be required to verify benefits?
• Will you do appeals?
• Will you follow up on unpaid claims?
• Will you credential?

Talk with management and develop a service structure that meets and price it accordingly.

There is no shortage of ways to structure your pricing as you can choose from an hourly rate, per transaction rate, monthly rate, percentage of collections, etc.   Some of the value-added services can be charged separately.  If you bill all providers the same you could end up losing money on one or maybe both if you don't know your true costs to cover expenses and your time and make a profit.  Nothing is more discouraging than to find out that you are making $5 an hour for your time. 

Also remember that billing on a percentage basis is considered illegal fee-splitting in New York, Florida and Illinois, and a few other states are in a grey area.