Providers generate a varying number of claims that need to be processed in order to be paid for their services. Because of the time, costs and hassle involved with processing these claims in house, the provider outsources the billing and claims processes to a Medical Billing Company.

The Billing Company scans, cleanses, batches, and prepares the claims which are then sent off to a clearinghouse. The clearinghouse processes them and sends the processed claims to the various insurance companies, who pay the providers.

In order to provide Medical Providers with the greatest rate of return any denials are dealt with by the Billing Company, who follows up and if necessary either invoices the patient or makes necessary corrections and resubmits the claims, all while providing customer service and detailed reporting on all claims to the Medical Provider who submitted them.

As a billing company you have a number of providers that generate claims and then outsource the claims and billing process to you for a fee.

Rather than keep this process in house, you, the billing company, outsource this process to iTech’s offshore claims and billing center. This frees you up to provide customer service and add to the number of providers you serve.

iTech then takes care of the entire claims and billing process. We send these claims to the insurance companies, who pay the providers. Any problems are handled by our staff, decreasing the amount of time it takes to re-submit claims or invoice and increasing the rate of return to your clients, all the while providing detailed reporting to you and your providers.

As a general rule of thumb Medical Billing Companies will have one staff person handling the claims and billing for three Medical Providers.

The average annual salary of a Medical Billing Professional is about $35,000.00 per year. Other costs for this in-house employee include:

Medicare and Social Security		: $2,677.50
Healthcare		: $5,220.00
401K		: $2,100.00
Time Off		: $3,500.00

This makes the total cost of in-house labor, not including workspace, on-going training, sudden staff changes and unexpected leave, total $48,497.50.

Also included in this in-house job function is the cost of Clearinghouse fees ($120.00 per month, $1,440.00 per year), technology upgrades ($2,000.00 per person per year), and postage, paper, envelopes etc ($150.00 per month, $1,800 per year). This makes the total cost of fees, technology and materials, not including phone, electricity and creature comforts, $5,240.00.

The total cost of one staff Medical Billing Professional is around $53, 737.50.

Using the general rule of thumb that says one Medical Billing Professional can effectively handle the claims and billing for three Medical Providers, let’s look at the three providers.

Each provider averages about 24 patient encounters each day an average of 50 weeks per year, generating 6000 claims. If each of these claims has an average reimbursement of $75.00, the total receivables for each provider is $450,000.00. This makes the total for all three equal $1,350,000.00.

A Medical Billing Company will typically charge fees that equal between 9 and 13 percent of receivables. For the purposes of this exercise we’ll say 9 percent. Based on that rate, the total fees generated by three providers will equal $121,500.00. When the cost of the staff Medical Billing Professional is deducted, your gross profit is around $67,762.50.

Compare this to iTech’s solution. The total cost of handling the medical billing process for the same three providers is $2500.00 per month or $30,000.00 per year. Giving you a total cost saving of $23,737.50 per year and increasing your gross profit to $91,000.00.