Question: Is it good if my billing company guarantees collections?
Answer: Life lesson number 1: If it sounds too good to be true, it probably is. Make sure you read and understand all of the fine print. Recently, some billing companies have begun to offer guarantees of collections to ED physician groups. Some are even making the offers without performing a chart audit. These guarantees range from a guaranteed increase of xx dollars per patient to xx percentage increase in net collections. From a smart business contractual perspective, how could any third party make these types of guarantees? In my humble opinion, this marketing gimmick is a desperate attempt to gain market share with questionable tactics. A chart audit is usually necessary to provide a realistic projection of collections based on the appropriate economic drivers. The appropriate economic drivers include but are not limited to payer mix, acuity mix, physician documentation, coding mix, and managed care contractual rates. My impression of guarantees is that they are often without meaningful merit and are efforts to acquire new business with a “what a deal” promise. Most reputable billing companies I know do not guarantee collections at all as the billing company can't control most of the economic variables that affect reimbursement (see above). Often, not even the physician group can control the most important economic drivers. Furthermore, most billing companies would not guarantee collections without a chart audit and without a healthy plethora of contractual fine print that provides outs in the event of any changes to the economic drivers that affect collections. In a few instances, a perspective billing company might be able to realistically guarantee collection increases only because the current billing company is doing a very poor job and thus the upside potential for improvement is enormous. However, most competent billing companies perform very well for their physician clients; therefore, these situations of tremendous upside potential don't often exist. If someone makes you this offer, proceed with caution. Ask yourself why would they be willing to pay you money out of their pocket for economic downturns that most likely are not in their control? Truth is, billing companies would not want to and thus getting your money in the event of the downturn may prove very difficult. Nothing in life is free.
Written by Bryan Vinyard, CEO Comprehensive Medical Billing Solutions
bvinyard@cmbs.biz
(405) 419-8000