| Are you seriously thinking about eliminating you | | | | Other Expenses - What about other expenses? |
| in-house medical billing? Are asking yourself would it be | | | | In-house billing clerks need space in which to work. |
| cost effective to do so? Well let me give you a | | | | Assume the billing clerks occupy an area that is 150 |
| breakdown of just how much it really costs to run an | | | | square feet of space. If your practice is leasing space |
| in-house billing department. | | | | for $15 per square foot, you are paying an additional |
| The following analysis can help illustrate how savings | | | | rent of $2250 just for those employees. This includes |
| can be obtained through outsourcing you medical billing. | | | | only the base cost. Usaully there are add-for increases |
| Assume that a medical practice is billing $1,000,000 per | | | | included in property taxes and maintenance services. |
| year and needs three billing clerks to handle this level | | | | Additional costs include utilities and office supplies. |
| of activity. Medical billing companies typically charge | | | | Postage is an expense, which is commonly |
| 5% to 9% of gross billings for this type of service; | | | | overlooked. Some medical billing services, but not all, |
| therefore, the cost of billing for this particular practice | | | | include this in the cost. These expenses increase the |
| would range between $50,000 and $90,000. If one | | | | cost of doing business and reduce your bottom line. |
| billing clerk earns between $22,000 and $25,000 yearly | | | | Finally, when you have an individual performing an |
| salary, three clerks would cost the practice between | | | | in-house function, that person needs supervision. If you |
| $66,000 and $75,000. This figure represents the base | | | | hire an office manager to supervise your billing staff |
| cost of payroll. Payroll taxes, which include the | | | | you must still monitor the office manager. This will take |
| employer's share of social security, and federal and | | | | away from the time you have to see patients. |
| state unemployment taxes, add approximately ten | | | | Outsourcing the billing function allows the practitioner to |
| percent to the base cost. Fringe benefits, which include | | | | be more focused on the core business - providing |
| pension and profit sharing plans, medical insurance, | | | | superior patient care. |
| disability insurance, educational reimbursement, sick pay | | | | Using an outside medical billing service may not be the |
| and personal time, can add another ten to thirty | | | | answer for everyone. But before you dismiss the idea |
| percent to payroll cost in sum, the cost of payroll could | | | | of outsourcing completely, it's a good idea to sit down |
| jump to a range of $79,200 to $105,000 when these | | | | and figure out how much it is actually costing you to |
| additional charges are added. | | | | do the billing in-house. You may be in for a surprise. |