Medical
Billing Business Opportunities: Pitfalls and Realities
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If you are contemplating getting into a Medical Billing Business,
you will quickly find that there are a lot of options out there.
There will be no shortage of companies willing to offer to sell
you a package of billing software and hardware. But before you
make a final decision, you should make sure you have done your
research.
Many of the companies that I have seen offering billing business
opportunities are selling a software package. And while this
is certainly an important part of the billing process, it
is not sufficient to establish you as a legitimate billing
professional. Most of these opportunities fall far short of
preparing you for the rigors of running a business. You would
be well advised to carefully read their advertisements for
clues about what you are buying. Find out exactly what they
say products, services, and support they are providing you
in exchange for thousands of dollars of investment. You would
be wise to proceed with extreme caution.
Many of these business models typically
are designed to do two things:
1. Sell you a package of billing software and equipment that
has value only to the extent that you are successful in establishing
client revenue relationships.
2. By selling you a proprietary package of software, most
of these companies will be locking you into their system,
so that if and when you do get your own clients, they will
provide all of your billing support - for an extra fee of
course.
There are some realities of starting and operating any business
- and these are equally applicable to the medical billing
business:
* Most new businesses fail in their first year of business.
* Running a business takes a lot of hard work and a significant
amount of start-up capital.
* Finding clients will be your number one challenge with a
medical billing business or any other business.
* Most physicians and hospitals are already committed to an
existing billing arrangement and will be slow to change.
While there is a possibility of getting your foot in the
door and being considered to do the billing for a new healthcare
account, if you hustle and sell hard, it will take time and
a fair amount of skill and persuasion. To be fair, it is certainly
possible to sell a few new accounts over time. But they won't
come quickly, and they won't come easily. Generally speaking,
this business has a fairly long sales cycle. Typically, you
can expect to spend a number of months cultivating new clients.
Timing is everything. A physician or clinic has to have some
motivation for changing services. Generally there are two
reasons they will consider switching to a new service:
1. They are not totally satisfied with their current service
- in which case you will have to demonstrate how and why your
service will be better than what they currently have.
2. They are hoping to get a better price - in which case
you have to demonstrate how you will save them money.
Both of these reasons represent significant obstacles for
your sales efforts. Given the nature of the sales process,
however, if you spend enough time and call on enough people
for a long enough time, you will eventually find some accounts
that will sign up to give your service a try - provided you
are sufficiently persuasive in your sales efforts.
Once you do sign a new billing client, you should plan on
providing services for a full month before you send out your
first invoice. After you send out your first bill, you can
expect to wait about 30 days to actually get paid. This means
that on top of the 4-6 months it will take to sell your first
new account, you can plan on an additional 60 days before
you get your first check. And that is just for your first
account, which may be modest in size. It will not come anywhere
near paying your overhead after you take out your expenses.
It takes significant staying power to start any new business
- which explains why most businesses of all kinds fail in
their first year.
While there is certainly a great deal of opportunity in the
medical billing and coding industry, it is something that
requires some serious thought and homework. You need to determine
what your ultimate goals are and then evaluate your options
to determine the most certain and cost effective path to achieving
those goals.
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