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 medical billing companies willing to offer to sell you a package of medical billing software and medical billing computer equipment. But before you make a final decision on this please, take a few minutes to take a reality check.
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Most of the companies that I have seen offering medical billing businesses or medical billing software are selling just that – an expensive software package. Most of them stop short of promising to prepare you in any legitimate or meaningful way for the rigors of running a real medical billing business. You would be well advised to read every word of their advertisements very carefully. Find out exactly what they say they are selling you for $3,500 or $7,500 or whatever they are asking these days. You would be wise to proceed with extreme caution.
Their business models typically are designed to do two things:
- Sell you an overpriced package of software and equipment that in its own right is only valuable if you happen to be able to sell your services to clients.
- 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 clients, they will provide all of your billing support – for an extra fee of course.
Here 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 medical billing 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.
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While there is a possibility of getting your foot in the door and being considered to do the medical billing for a new medical 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 medical billing accounts over time. But they won’t come quickly, and they won’t come easily. Generally speaking, the medical billing 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 medical billing services. Generally there are two reasons that a medical practitioner will consider switching medical billing services:
- They are not totally satisfied with their current service – in which case you will have to demonstrate how and why your medical billing service will be better than what they currently have.
- 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.
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Once you do sign a new medical billing client, you will have to provide medical billing services for a full month before you send out your first invoice for services. After you send out your first bill, plan to give them about 30 days to pay. 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 a new medical billing business – which explains why most businesses of all kinds fail in their first year.
While there is certainly opportunity in medical billing and medical coding for professionals and even to start up a new medical billing business, 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 path to achieving those goals.
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