Starting a medical billing company can be a rewarding and lucrative opportunity for many different types of professionals. Whether you have medical billing and coding credentials or you’re working to achieve them, you have the chance to start an independent or at-home business. You can also start a company by hiring and building a team of professional billers. Either way, the medical billing industry is a promising industry that’s growing year over year.
At the same time, starting a medical billing business requires capital investment, time, and effort. You will want to first make sure it’s the best fit for you! If you are interested in starting your own medical billing company, get familiar with these steps to establishing a business in medical billing and coding.
1. Understand the market
The first step to starting your own medical billing company is getting familiar with the industry. This will help you feel confident that it is the right industry to enter, and that there will be a demand for your services.
According to Kareo, it’s a great time to start a medical billing company. The industry is expected to grow over the next few years, with more practices considering the pros of outsourcing medical billing. Additionally, The U.S. Bureau of Labor Statistics predicts medical billing jobs to grow by 15% between 2014-2024, which is much faster than the national average for job growth. Since medical billing services are more in demand than ever, there is a promising opportunity for you to expand your company in the upcoming years. To get started,
Research the industry holistically
Download and take a look at Kareo’s industry report. This will give you a sense for the medical billing and coding industry as a whole.Look into your competition, as well. Do some research about other outsourced medical billing services in the area. See who their clients are, and whether or not there will be new clients who need your service.
You can also reach out to local medical practices. Ask them about their medical billing needs. For instance, are currently outsourcing? Would they consider outsourcing down the line? This will help you understand the local demand for outsourced billing services.
Investigate sub-sectors
Then, dive deeper into the medical billing industry’s sub-sectors. For instance, the following types of medical billing jobs are in high demand:
- Dental billing jobs will grow by 10% between 2018-2028.
- Mental health and psychiatric billing is projected to become more complicated. This may cause more mental health professionals to outsource billing in the coming years.
- Family practices are outsourcing medical billing more often to improve cash flow, avoid errors, and earn more revenue.
Remember that each medical sub-sector will have its own billing and coding guidelines and procedures. AAPC is a good resource to explore the fundamentals and training necessities for each sub-sector. This research should give you a better idea about the need for your services within the local market.
2. Learn about start-up costs
As with any business, there will be capital investment involved with getting started. Depending on the size and scope of your new company, you may spend anywhere from $1,000’s to $10,000’s to kickstart your business. However, no matter what size your company will be, there’s several things you will need to get started:
- Medical billing software and licensing
- Computer equipment, plus a multi-function commercial copier
- Technical support
- A reliable business phone system
- CMS 1500 forms
As you grow your business, you will most likely spend additional costs. However, if you’re just getting started, these start-up costs should put you in a good position to get going!
3. Acquire medical billing credentials
If you don’t already have your medical billing credentials, you will need to enroll in a training course. Becoming a professional medical biller requires in-depth knowledge of billing for medical practices (including any specialty practices you may service) as well as managing insurance claims. This is very important, since medical professionals will be trusting you with the process of managing their revenue!
To acquire credentials, you can enroll in online or in-person courses. Typically, this can take you about a year or more to complete. There will also be exams you need to pass from major medical organizations, such as The American Medical Billing Association. Additionally, if you want to get certified in medical coding, you should pursue credentials from the American Academy of Professional Coders and the American Health Information Management Association.
4. Map out your business plan
Coming up with a business plan is important when starting a medical billing company. In order to acquire new customers seamlessly, you will want to consider which medical billing services you want to specialize in. Think about the things your target market will look for when choosing the best medical billing company. For instance, when getting started, ask yourself logistical questions such as:
- Do you want to set up a solo practice or partner with other medical billers?
- What is your ideal company size?
- What types of medical billing services will you specialize in?
- Which kinds of practices will you help?
- How will you structure your fees?
- Do you need to partner with an accountant to manage finances and taxes?
All of these are important questions to think through before getting started. Preparing your business from a practical standpoint will help you provide the best medical billing for physicians’ needs, and be successful in the long run.
5. Apply for a business license
To establish a legal medical billing business, no matter whether it’s an at-home business or larger company, you will have to apply for a license before accepting new clients. Depending on your business plan (see above), you can choose to form an LLC or a Corporation.
You will also need to register for taxes before accepting new clients. To this you will need to apply for an Employer Identification Number (EIN), which should be simple and straight-forward. However, make sure you don’t overlook this step – it’s very important in order to follow legal guidelines.
6. Choose a medical billing software
There are many different ways to manage your medical billing, including electronic and paper-based. Since technology in the medical billing industry can change so quickly, we recommend using electronic-based billing software.
Since there are many types of medical billing software these days, it can be tricky to choose one. Some things to consider when making your decision are:
- Ease of use
- Compatibility and integrations with back-end tasks
- Built-in, unified communication system
- Device compatibility and mobile options
- Cost
- And more
We recommend taking these factors into consideration, and coming up with your top priorities as a team. Then, do some research about different medical billing software and how each can help you meet your needs.
7. Partner with a clearinghouse
Even once you’ve purchased and become comfortable using your billing software, you will still need to work with a clearinghouse to complete your billing work. A clearinghouse is a third-party company that acts as the “middle man” between the medical biller and insurance company. In order for a clearinghouse to suit your medical billing service, you will have to consider the following:
- Does the clearinghouse work with organizations nationwide? Do they service your area?
- Do you work with the same insurance companies?
- How do they keep you up-to-date on the progress of insurance claims?
- If a claim is rejected, will they show you why?
- Is there a good customer support system?
- What are their contract options?
- Will you be able to switch to a different clearinghouse if they end up not being the right fit?
- What is their fee structure?
As you can see, there are many questions involved with this process! Make sure to do thorough research and interview a handful of companies before choosing.
8. Develop Marketing and Sales Strategies
Once you have laid all the groundwork to start a medical billing company, the next step is developing a marketing and sales strategy to win new business.
There are tons of ways you can market your company to your prospects. For starters:
- Take a look at these 7 ways to get more billing clients.
- Come up with a customer acquisition marketing strategy.
- Nurture all prospects that have expressed any interest in your service.
- Stay determined to reach unresponsive prospects.
- Try a non-branded approach in your digital marketing efforts.
And don’t forget about sales! Even once you’ve generated interest in your medical billing services through your marketing efforts, you have to use superior sales strategies to grow your business:
- Build a stellar sales team.
- Always monitor your sales funnel.
- Follow-up with every prospect using winning sales email templates.
- Make sure your marketing and sales teams areon the same page.
9. Build a Professional Network
Lastly, once you’ve got your foot in the door of the medical billing industry, you need to grow your network! There are many different ways you can do this.
- Join LinkedIn groups to network with other professional medical billers.
- Become a member of professional organizations, such as the American Medical Billing Association (AMBA), American Health Information Management Association (AHIMA), and the Healthcare Financial Management Association (HFMA)
We’re here to help as well! To discuss how we help medical billing companies like yours, set up a time with us to talk! Our Revenue Growth Program helps medical billing companies across the country find new, true-intent prospects and grow revenue.