Medical Billing Service Marketing Plan

Physicians 1st Billing and Claims

Executive Summary

Billing services currently exist to manage medical practices. These services relieve medical professionals of tedious detail work, but rarely do they offer a means to substantially maximize the practice's bottom line. Physicians 1st Billing and Claims will not only free office staff for more crucial tasks, but will also maximize returns from insurance carriers.

National statistics show that only about 70 percent of insurance claims, initially submitted on paper, are ever paid by insurance carriers. With electronic submissions Physicians 1st Billing and Claims can increase the percentage of claims paid to around 98 percent.

Additional statistics indicate that it currently costs a medical practice between $8.00-$10.00 per claim to process insurance for their patients. Physicians 1st Billing and Claims can reduce these costs by 50 percent or more.

Statistics show turnaround on paper insurance claims to be 30, 60, even 90 days or longer, creating serious outstanding receivables for the practice. By submitting claims electronically, Physicians 1st Billing and Claims can generally have money in the physician's hand within 14-18 days. Of course, this reduces outstanding receivables proportionately and tremendously improves cash flow.

Statistics also show a 30 percent suspension/rejection rate for paper insurance claims. This doesn't mean that the claims are never paid. What it does mean is medical staff must hassle with insurance carriers over payment. With the extensive editing performed on electronic claims prior to their transmission to carriers, this percentage is reduced to 2-3 percent. Claims are submitted with a 98 percent accuracy rate.

For many years physicians graduated from medical school under the premise that they were going to run a "practice." "Businesses" were for other professionals. Many simple administrative procedures were neglected, such as:

• Keeping current with insurance specifications and regulations, so that claims were paid on a timely basis,
• Concentrating on collecting receivables and co-payments,
• Ensuring that fees were kept at the maximum allowable that insurance carriers were paying, or
• Procedure codes were current so that claims weren't suspended or rejected.

For many offices, outstanding receivables grew tremendously and annual bad-debt write-offs became routine. But adequate profit margins allowed medical practices to ignore sound business procedures. Physicians' heads raised and they began taking note of public opinions toward health care reform issues during 1998 and 1999. With the onslaught of managed care organizations upon the industry, physicians are finding profit margins shrinking. They are now alert to the fact that in order to remain in business into the 21st century, they will have to adopt more efficient business practices.

Physicians 1st Billing and Claims plans to capture the inevitable evolving niche of electronic medical claim filings through a focused, customer-centric business model.