Medical Coding and Billing


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l quotHow Much Should I Charge?r quot 

One challenge new medical billing business owners, especially freelancers, will face is how to determine their fees and rates for services they provide. Services typically include electronic claims submission, insurance follow-up, denial appeals, and soft collection for patient billing.

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Setting Your Medical Billing Service Fees

When a prospect contacts you (via email) and asks: "What are your rates?" or, "What do you charge?" the best way to convert that prospect into a client is by NOT sending a rate sheet right right away. But rather, call the person to find out exactly what they need! Because when you are promoting services and someone asks for a price list right off the bat, you just don't know enough about them and their specific needs to give it yet.

What to Consider when Setting Your Fees

New, and established medical billers almost always have to explain to their clients that it is not the cost that they need to look at, but rather, the value they get dollar for dollar. But before they quote a price, they need to take the following things into consideration:

  • present workload and deadlines
  • going rate in their location
  • type of provider (specialty)
  • average charge in your area
  • urgency and complexity of the project
  • your experience and qualifications
  • duration of the contract (long-term, short-term)
  • client's comfort zone, e.g. flat rate, hourly rate, or percentage


  • their costs of providing that service
  • their cost of being in business
  • their own financial goals and threshold
  • and the value their expertise provides for the client

Fee Increases

Medical billing newbie's charging at an hourly rate might realize that it created an unexpected special problem! Call it a dilemma, or catch-22, because the more skilled they have become, the faster they work. So, unless they raise their fees they are actually reducing their earnings! But this leads to another catch-22: customers don't like it when fees for services they are already enjoying at a lower rate are raised. One discussion with plenty of feedback in our Medical Billing Community forum revolves around exactly this topic.

Vicky1 asked: 

Charges to Clients

"What is the average billing rate for billers? I am charging my clients 7% of what gets paid. One of them is asking for a decrease, stating my rates are too high. What do you all charge?"

The responses posted ranged from: I do a full practice analysis before giving a rate... to, my rates vary per client... to, 7% is a bargain, I NEVER go back on my rates... to, if the doctor comes back with "well I just talked to a company that said they charge only 4%", I would respond quite frankly "Then I suggest you call them and take the 4%, have a nice day!".

My response was:

Without going into exact figures or percentages, here is my stance... the other option for them is to go elsewhere and get cheaper! Next time this client tells you your rate is too high... have your blurb, and horror stories ready, and scare the willies out of them about "cheap services".

Don't be smart... just have a real conversation that serves as an eye-opener... Tell them stories of business failure, and the cost to fix things, and catch up. Somewhere in there, throw in the phrase "Of course, if you want cheap, you can get cheap; and there is always India!". Also, mention that it they should decide to come back later to fix the mess, your rates will be likely higher, especially since the 7 per cent they are enjoying now is a special rate that was established especially for them as an appreciated customer. Once you painted the picture, I am sure they will be happily staying.

I've used this technique myself in web design. It works. Never ever heard as much as a peep of a complaint ever again, even though over the years my rates still increased a little. My biggest advantage and selling point (hook) is my reliability, accuracy, credibility, productivity, and availability within 1-2 hours, and on weekends, if needed, to help or answer questions. Sadly, I too had to literally convince a couple clients, that my rates are a BARGAIN... and right on target.

I NEVER go back on my rates! They were carefully determined for each individual client before a proposal was forwarded and discussed again before the contract was signed. Agreed, is agreed...  Sometimes, however, if I feel the customer is sincere, and valuable to me, I am willing to sit down and examine the breadth of the current services to determine if we can pin point certain parts of the service that they no longer need; or can take over themselves, and thus, rather than reducing my rates, make every effort to meet their new budget.

However, if I sense it's simply a case of "buyer's remorse" ... a rate reduction for the services agreed to is not up for discussion. Once agreed, I deliver, and expect to get paid! If a client wishes to cancel a contract, that's fine. I always work a cancellation clause into my contracts, with a certain amount of prior written notice. However, I am speaking of web design rates and contracts, rather than billing services. Nevertheless, I am fairly sure, the situation is similar.

Figuring Out What to Charge

Scott Highton, of Virtual Reality Photography raises an excellent point. Although he speaks of photography, he addresses guidelines that hold true for ANY business owner, independent consultant, or freelancer:

Quote: "Every independent business person needs to determine what their basic cost of being in business is. These are the costs of rent, insurance, advertising, promotion, utilities, professional memberships, office supplies, capital expenses (computers, peripherals, cameras, lenses, printers, etc.), insurance, vehicle costs, publications, business education, travel, salaries (including your own), etc., and most importantly... profit (without profit your business cannot grow). Don't confuse your salary (or the amount you take from the business for your personal use) with profit. They are completely different." (End of quote)

I suggest you visit the above referenced website, as there are many more excellent tips on what to take into consideration when you to set up your fee schedules.


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 Determining Your Fees