When starting a medical billing business, there are many things to think about and writing a contract is just one of them. There are a lot of expenses to get started and most of us just starting out don’t want to spend our limited investment money on a lawyer. So what do many of us do? We “Google” a sample medical billing contract and use what we think sounds good and create a contract for our business. That can be a big mistake.

That’s what we did sixteen years ago when we started our business except there was no ‘Google’ back then. But basically we search until we find an example, a very simple contract, and we modify it for our use. For several years we told ourselves that this was fine and if it didn’t work for the provider, it didn’t work for us either and we should move on and find new customers. It took us a long time to realize that in a number of situations, our simple contract was actually the reason things weren’t working out.

When you first start your medical billing business, you have no idea of ​​the things that can go wrong in a relationship with your clients, so you don’t know what should go into a contract. Our first contract did not even specify the responsibilities of either the supplier or ourselves. It is amazing that we have been able to find suppliers willing to sign our contract. If you don’t include the responsibilities of each party in the contract, how do you protect both of you when the relationship starts to fall apart? And if neither party knows their responsibilities, how can you expect the relationship to work?

Here is an example. You specify in the contract that it is the provider’s office representative’s obligation to provide you with all remittance remittances, but you do not receive them, which causes you a lot of extra work contacting insurance companies to check the status of claims. they were already paid for. It’s annoying to spend three or four hours calling the insurance companies to find out that the claims were paid but the doctor’s office didn’t send you the eobs. When the doctor has signed a contract that says he will designate a responsible person for that purpose, you can kindly inform the person responsible for getting you the eobs that this is such an important issue to you that it is written in the contract the doctor signed that eobs will be provided to you. You can also include a provision in the contract to specify what you can do if the provider does not provide the eobs.

Another important example is a problem you will no doubt run into: your payment. Many people starting this business are used to receiving a regular paycheck. When you become an entrepreneur and own your own business, you can only write yourself a paycheck if your suppliers pay you. You need an agreement with your providers about when you will be paid for your services. Doctors are often not the best businessmen and sometimes not very good at paying bills on time. Especially when you’re just starting your business, it’s vital that your provider understands when he expects payment and that you have something well written to protect you if you end up with someone interpreting the language of your contract in court.

Every year that you are in business, you find additional things that need to be added to your contract. New situations arise that you realize should be contemplated in your contract. So how do you cover everything that needs to be covered? You need a list, actually multiple lists. You need a list of what you think the provider’s responsibilities are. You need a list of what you think your responsibilities are. You want to envision a symbiotic relationship with your suppliers and then list the reasons why this relationship works and put those actions in your contract as either you or the supplier’s responsibilities.

You need a list of everything you’ve ever heard of that went wrong in a medical billing business between provider and biller. You need to decide how you would avoid those situations if possible and cover how it would best be handled in your contract if it were unavoidable.

What you are charging your provider for and how you will be paid is a pretty big part of your contract. Are you charging a percentage, a flat fee, or a fee per claim? Is it clearly defined how you are charging? Is the percentage based on what is invoiced or what is received? Are patient payments included? If you charge per claim, what constitutes a claim? Is it one line on a claim form or is it per page?

You also need to take into account what will happen when the relationship ends. It can be expected, like when someone retires, or it can be unexpected, but you should have a plan for when the relationship ends. It will be much better to part ways if you have a plan of action for how things will be handled.

The main reason for a good contract is to protect you, but your contract can do much more than protect. You can eliminate potential problematic providers that will drive you crazy. If you disagree with your vendors about what each of you will contribute to the relationship, then the chances of the account running smoothly are very small. Don’t make the mistake of skimping on an important part of your business that may save you from fighting back in court in the future. Be sure to take advantage of the time and experience of others to get everything you need covered in your contract.