Offshore Medical Billing – Pricing

One of the major factors that are a puzzle to US healthcare billing companies in offshore medical billing is the pricing. The oft asked questions are “How do you price your service?”; “What is the pricing?”; “Is it really economical?” The main objective of this piece is to solve some part of that puzzle for them.

Pricing logic: The pricing adopted by offshore medical billing companies including the medical billing companies in India, are a direct function of the effort involved plus a small profit margin. After all, the outsourced medical billing companies are also business entities that work for a profit. Having said that, the net savings for US healthcare billing companies are in the range of 25% to 50% depending on the scopes, volumes and specialties that are outsourced.

Pricing Models: The offshore medical billing companies typically adopt 4 – 5 pricing models depending on the scope of work and volumes that are outsourced.

  • Percentage pricing: The US based billing entities are very familiar with this model since most of them operate on such models with their end customers. This model is also called the ‘Success Fee’ model since the invoice value is directly related to how successful the billing and collection efforts are. So, this model incentivizes the outsourced medical billing company to work towards better collections by taking all the necessary actions. This model of pricing is only possible in end-to-end accounts where the company does the Data entry, Coding, Transmission and AR/Denials. It could be possible even when one of these elements is missed, but typically the vendor should have full control over the entire billing process for this model to work.
  • Per Transaction pricing: This model is completely different in that each transaction is priced (per chart for coding, per claim called for AR etc.). At the end of the month the invoice is done by multiplying the number of transactions with the agreed pricing. This model would work well for companies that send only one scope of work and does not want to commit to volumes or flow of work. The caveat is that there will be a minimum invoice amount per month, which would be still charged even when the volumes do not add up to the minimum value.
  • FTE pricing: The FTE pricing is just like having an extended business office with staff offshore. There is a fixed cost per FTE of the offshore medical billing company that is agreed and also the benchmarks for each scope are set. Irrespective of the volumes, the full FTE pricing has to be borne at the end of the month. So, it is the responsibility of the US billing entity to make sure that they have continuous flow of work to keep the FTE occupied for the whole month. This is similar to ensuring that the staff at the US office have enough work for the salary they get paid. Typically, this model is used when only one or two scopes are sent to the outsourced medical billing company.
  • Per hour pricing: A variation of the FTE pricing model is the ‘per hour pricing’ which is typically adopted when the volumes and/or regular flow of work cannot be assured to the offshore medical billing company. This pricing model’s fee is slightly higher than a pure FTE pricing due to the unpredictability of the work flow. Again, benchmarks are agreed for each scope and the US billing entity is invoiced only for the number of hours utilized in a given month.
  • Benchmark pricing: This again is a variation of the FTE model where there is a minimal FTE guarantee to the outsourced medical billing company by the US based entity. The FTEs can be billed in multiple fractions as well based on the benchmarks set and achieved. This is a hybrid model between the pure FTE model and the ‘Per Hour’ pricing model that works best for clients with large volumes but with limited scope of work.

Which model for me? There is not a ‘one size fits all’ pricing, especially in the Percentage model. The variables involved are specialty, scope of work, software, state in which the payers are located, payer mix, the health of the Aging report etc. With the other models, while the price is fixed, the benchmarks would vary depending on a few of the above factors. For eg., Data entry on Kareo cannot be compared to similar work on Allscripts MyWay or posting payments for Anesthesia claims cannot be compared to posting payments for Internal Medicine.

Offshore Advantage: One of the biggest advantages of working with an offshore medical billing company is the expertise with different specialties and software. This sometimes enables the US healthcare billing entity to acquire projects on new software or specialty riding on the strength of the outsourced medical billing company that they have partnered with. This is in addition to the cost and time difference advantages that are already being leveraged.

About e-Care India: e-Care India is one of the renowned outsourced medical billing companies in India that promises the above mentioned benefits with total customer satisfaction. With 13 years of experience in the industry, e-Care’s outsourced medical billing delivery centers have been providing end-to-end medical billing services seamlessly to its clients, namely the US based companies that bill for Providers and healthcare Facilities. To know more about e-Care and its services, log on to