When starting a medical billing business, there are many things to think about and writing a contract is just one of them. There are many expenses to get started and most of us just starting out do not want to spend our limited investment money on an attorney. So what do many of us do? “Google” displays a medical billing contract and we use what we think sounds good and draw up 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” then. But basically we search until we find a sample, a very simple contract, and modify it for our use. For several years we told ourselves that it was okay and that if it didn’t work for the supplier, it didn’t work for us either and we should go ahead and find new customers. It took us a long time to realize that in various situations our simple contract was actually the reason things weren’t working out.

When you start your medical billing business, you have no idea what can go wrong in a relationship with your clients, so you don’t know what should go into a contract. Our first contract didn’t even specify the responsibilities of either the supplier or ourselves. It is surprising that we were 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 either of them when the relationship starts to unravel? 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 obligation of the representative of the provider’s office to provide you with all payment remittances, but you are not receiving them, which forces you to do a lot of additional work to contact the insurance companies to verify the status of the claims. that were already paid. It’s annoying spending three or four hours calling 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 appoint 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 that the doctor signed that the eobs will be provided to you. You can also include a provision in the contract to specify what you can do if the supplier does not provide you with the eobs.

Another important example is a problem that you are sure to run into: your payment. Many people who start this business are used to receiving a regular paycheck. When you take the step to being an entrepreneur and owning your own business, a paycheck can only be issued if your suppliers pay you. You need to understand with your providers when you will be paid for your services. Doctors are often not the best businessmen, and sometimes they are not very good at paying bills on time. Especially when you first start your business, it is vital that your supplier understands when to expect payment and has 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 covered 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 imagine a symbiotic relationship with your suppliers and then list the reasons why this relationship works and put those actions in your contract as your or the supplier’s responsibilities.

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

What you are charging your provider and how they will pay you is a pretty big part of your contract. Are you charging a percentage, a flat fee, or a claim fee? Is it clearly defined how you are charging? Is it the percentage of what is invoiced or 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 consider what will happen when the relationship ends. It can be expected, like when someone retires, or it can be unexpected, but you need to have a plan for when the relationship ends. It will be a much better separation if you have a plan of action on 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 troublesome vendors that will drive you crazy. If you disagree with your providers about what each of you will contribute to the relationship, then the chance that the account will run smoothly is very small. Don’t make the mistake of skimping on an important part of your business that may prevent you from defending yourself in court in the future. Make sure you take the time and expertise of others to get everything you need covered in your contract.