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Medical Billing Allowables: Why Charging More is Good Practice

medical billing

Unlike most businesses expecting a bill to be paid in full, medical billing companies typically expect to receive a fraction of an outstanding amount. In medical bill collections, it is quite common for a $500 bill to be sent out with the expectation that only $300, $150, or far less than that will be paid back. Charging much more than one expects to collect, which is typically known as a medical billing allowable, takes care of this problem and boosts profitability by ensuring that an actual payment will be received. That is just one reason why charging more is good practice in medical billing management.

It Simplifies the Medical Billing Process

Because medical procedure costs vary, medical billing companies would be mired in the time-consuming task of maintaining multiple fee schedules if they tried billing patients and insurers the exact amounts owed. All of these fee schedules would require constant updating given that many insurance plans change their own fee schedules and the amounts they pay every year. This would also have a detrimental effect on any internal data that tracks and compares charge volumes in the medical billing process.

It Boosts Revenue

Most medical practices often see patients with out-of-network insurance providers. Some of these insurance plans pay a percentage of the charges that are billed. In this instance, charging more gives medical billing companies the chance to collect more money on that percentage.

It Maintains Legal Compliance

According to US law, a medical practice that accepts Medicare cannot charge an insurer or any other entity a lower fee than it charges Medicare. The amounts charged must be the same, or the practice risks breaking the law. Charging all insurance plans and patients the same amount helps maintain legal compliance, even if it is set at a higher fee schedule.

At Advanced Reimbursement Solutions, we understand the intricacies of the medical billing process. Our state-of-the-art billing system handles all stages of a medical claim in a manner that boosts profitability for physicians, surgery centers, and durable medical equipment providers. Contact us today to book an appointment and speak with one of our professionals in Wilmington or Phoenix.

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