What to know before signing up with a billing company

Contract Language. By Steven M. Harris, AMNews contributor. June 3, 2002.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Physician practices often rely upon third-party billing companies for assistance with billing and claims filing. Billing companies can take on many different forms, structures, operations and functions, ranging from small firms that only facilitate the electronic submission of claims to large businesses that provide coding, claims submissions and consulting services.

There is a tremendous variation among billing companies in terms of the types of services and the manner in which these services are provided to physicians.

What doesn't vary, though, is that improper billing practices can pose significant legal liability exposure and financial risk.

When billing companies assist you in preparing bills or coding, you have to ensure there are adequate safeguards to protect your interests and not jeopardize your Medicare and Medicaid provider status. This column will address several key aspects of billing service contracts that you should be aware of and address before signing up with a billing company.

All payments collected by your billing company should be deposited into a lockbox at an institution of your choice. The billing company should not be able to withdraw any funds from your lockbox.

The billing company will probably ask for a monthly fee equal to a percentage of your net collections it posted during the applicable month.

Make sure the calculation of the monthly fee is tied to payments received and not just billed. This gives the billing company an incentive to collect your bills. [...]