Choosing the Best Medical Billing Fee Structure for Old AR Cleanup


Choosing the Best Medical Billing Fee Structure for Old AR CleanupDoes your practice have collections that are tied up in old AR? If yes, a billing company can help you recover the amount without disrupting your current billing procedure. Such companies have a team of skilled billers and coders who are experts at capturing funds tied up in the 60+ day AR. They are experienced in claims recovery, helping physicians put their hard earned money back into their wallet.

Considering the regulatory changes, market fluctuations and changing economy, AR recovery has become a daunting task for many medical practices. Due to lack of time and a skilled staff, physicians are not able to optimize their business processes and achieve the revenue objectives. In such scenario they cannot afford to lose more money due to collections issues.

They are faced with two fee options when seeking help from a billing company for denial management and old AR cleanup:

  • Some companies charge a high percentage (more than 35%) of what they collect
  • Other companies charge a fixed fee for the AR recovery

High Percentage Fee Structure

There are certain drawbacks to both the options, for instance, if you select the first option, the medical billing company will not be interested in pursuing smaller claims as there will be no incentive for them. The company will have to spend approximately $20 for each old claim meaning, any claim under $100 will be ignored as it will hardly provide them profit. Thus, choosing the first fee structure will not be effective as majority of old AR claims are smaller claims.

Fixed Fee Drawbacks

Even the fixed fee structure has its set of drawbacks. Since the company will get a fixed flat fee, it will not be interested in collecting as much payment as it can. It will cost the billing company almost nothing to write-off a claim, but for the medical practice it will result in significant revenue loss. Another drawback of this fee structure is that the billing company can take its own sweet time for cleaning up old AR because the timeframe to recover the payments remain the same.

It is best to choose a billing company that offers a hybrid fee structure with a moderate percentage of collections and a moderate fixed fee. With the fixed fee structure, pursuing smaller claims becomes economical for the billing company. With moderate percentage of collections, the company can make profits from collection of every single dollar and doesn’t get any incentive for just writing-off claims.

Billing companies such as offer a mixed pricing structure for old AR cleanup and denials management. The team of coders and billers at MBC are well-trained in following-up on all accounts receivables. They have been helping practices for around 15 years across the 50 states in US overcome problems that hinder collection efforts.

MBC handles all issues related to old AR accounts with precision, freeing up physicians and the staff to focus on quality care provision. The company also offers effective HIPAA compliant billing solutions and RCM services to various specialties of medical practices.

This entry was posted in Medical Billing, Practice Management and tagged , , . Bookmark the permalink.


What are you looking for

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>