Why A Medical Billing Contract?
There’s an old saying – “Everybody looks good at the starting line.” That is to say when you first start working with someone, everybody’s agreeable and cooperative. That’s the time to document your agreement to minimize any “he said, she said” issues later. There’s also another saying – “If it’s not in writing, it didn’t happen.”
A contract is very important for a medical billing business to define the rolls and responsibilities of both parties as well as defining the services provided, pricing, terms, etc. It should also clearly describe the responsibilities of client and Medical Billing Service.
The contract we use is fairly simple and doesn’t obligate the client if they wish to discontinue our services. If a client doesn’t want to use our service, I don’t want to force them to.
However it is important that we are fairly compensated for our efforts and expenses. And the contract is the place to document the fees for your services. It’s also especially important to define deliverables and responsibilities when/if services are terminated. If you have an obligation to pay clearinghouse fees for a fixed period, you want to make sure you are covered for those and any other expenses.
I’ve seen too many situations where a client thinks they can just immediately quite using a billing service and have no obligation to compensate they for all the time, labor, and expense they have obligated to getting the doctor paid. That’s when having a good clear medical billing contract is important.
We pride ourselves in providing a level of service that they wouldn’t want to change services. This also makes it easier to sign a provider when they know they are not getting locked into using our services.
Some people also refer to a contract as a service agreement. Here’s an example medical billing contract in PDF form.
Below is the same sample medical billing contract text if you want to cut-and-paste in your own word processor document. I know it’s a little difficult to copy from a PDF document.
Feel free to use as a starting point and remove what you don’t need. Remember it’s just an example that can be customized. I’ve used ACME as the generic billing service name. As with all business contracts it’s a good idea to have it reviewed by an attorney before signing with a client.
The Medical Billing Business Books page has a comprehensive guide to writing a contract called “Write a Kick Butt Contract For Your Medical Billing Service“. It’s an 82 page guide on crafting a contract that’s customized to your situation.
Some other resources you may find helpful on this site:
Sample medical billing contract:
SERVICE AGREEMENT FOR FULL REIMBURSEMENT MANAGEMENT
This Service Agreement is entered into between Acme Medical Billing LLC, a (hereinafter ”ACME”), a ”healthcare electronic claims processing and services company and _________________, (hereinafter “Client”), a healthcare provider.
WHEREAS, ACME is a healthcare billing and service company which provides computerized claims, billing and collection services to healthcare providers and which files medical insurance claims on behalf of healthcare providers with government and commercial companies by electronic and paper means, and which also provides for billing services directly to patients or for patient’s portion of healthcare provider fees not covered by insurance; and
WHEREAS, the Client desires to retain ACME to provide it with claims and billing services whereby ACME will file insurance claims with government and commercial companies by electronic and paper means on behalf of Client;
NOW, THEREFORE, in consideration of the promises and covenants contained herein and for other valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows:
Executed this _______day of _______________, _________.
By: ___________________________________( Client name and title)
By: ___________________________________( Billing service representative name and title)
End of Sample Medical Billing Contract
If you agree to modifications to the medical billing contract, these can be handled with an amendment. Here’s a sample medical billing contract Addendum in PDF.
Here’s the sample medical billing contract addendum in text if you prefer to cut-and-past into a Word document:
ADDENDUM TO SERVICE AGREEMENT FULL REIMBURSEMENT MANAGEMENT
This Addendum Service Agreement hereby modifies the terms of the service agreement dated entered into between Acme Medical Billing LLC, (hereinafter ”Acme”), and Dr. John Doe (hereinafter “Client”).
The Agreement is hereby modified as follows:
The Client will pay to Acme ____% of the total (gross) amount collected from ALL insurance companies and ALL patients as a result of the billing services performed by Acme for Client, with a $500 monthly minimum billed amount. The Client agrees to provide copies of all Explanation of Benefits (EOB) forms received from insurance payors to Acme as well as records of payments received directly from patients (Weekly). ACME shall post the payments received from the insurance payors to the patient’s file, shall file any secondary or tertiary claims, and shall bill the patient directly when necessary in order to secure full payment for the Client. Effective date of this change is _______________.
This Service Agreement represents an addendum to the original agreement between the parties and shall not be modified unless done so in writing signed by or on behalf of both parties.
Executed this _______day of ___________________, _________.By: ___________________________________( Client name and title)
By: ___________________________________( Billing service representative name and title)
End of Sample Medical Billing Contract Addendum
If you’re looking for a more comprehensive guide to writing a contract, “Write a Kick Butt Contract For Your Medical Billing Service” on the Medical Billing Business Books page. It’s an 82 page guide on crafting a contract that’s customized to your situation and includes information on contracts, Errors & Omission insurance, compliance plans, as well as a section on pricing for your medical billing business.
Even if you are an experienced medical billing business owner, you should have a good contract that will protect your business interests if you have a dispute.
Minimum To Include
As a minimum you medical billing contract should specify:
Reporting Requirements
Some billing services include reporting requirements and frequency. I don’t include this as I feel the provider should be entitled to reports on request to see how their practice is performing. Most providers also have access to the practice management system and generate their own reports.
The client is responsible for providing true and accurate data. Unless you offer as an additional service, the provider should also be responsible for verifying insurance and credentialing. You may want to spell these out separately in the medical billing contract if you think this could be a point of contention later.
Price Aging Separately
You also may want to clarify in your medical billing contract that you are not responsible for claims or billing issues that occurred prior to your contract date. This is especially important if the current billing is a mess. If this is brought up afterwords you can document agreement with a medical billing contract addendum similar to the one shown above.
Many providers desire that past insurance and patient aging be worked due to issues with past office billing practices. That’s fine and it’s a great service for a medical biller to offer, but should be priced right. Remember if you are going to charge different rates for aging, you have to track and the aging claims separately from the current ones.
Working on insurance aging (unpaid or rejected insurance claims) is usually very labor intensive and time consuming. These services need to be spelled out in the contract separately and priced accordingly. Your time and expertise are valuable and your services should be priced fairly.
It’s important to remember that the practice information (including patient data) is the property of the client.
Business Associate Contract
Providers may also request that you sign a Business Associate contract with regard to the HIPAA Privacy Rule. This documents that a covered entity (the Provider) has an agreement with the business associate (Medical Billing Service in this case) to comply with the requirements of the HIPAA Privacy Rule.
The U. S. Department of Human Services has a Sample Business Associate Contract here and also further explains it’s use.
Protect Yourself
In the litigation crazy society we live in today, it’s a good idea to have your contract reviewed by a business lawyer. If a client decides to sue or is party to a suit, you want to make sure you are protected.
