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Medical Billing Business Opportunities: Pitfalls and Realities

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If you are contemplating getting into a Medical Billing Business, you will quickly find that there are a lot of options out there. There will be no shortage of companies willing to offer to sell you a package of billing software and hardware. But before you make a final decision, you should make sure you have done your research.

Many of the companies that I have seen offering billing business opportunities are selling a software package. And while this is certainly an important part of the billing process, it is not sufficient to establish you as a legitimate billing professional. Most of these opportunities fall far short of preparing you for the rigors of running a business. You would be well advised to carefully read their advertisements for clues about what you are buying. Find out exactly what they say products, services, and support they are providing you in exchange for thousands of dollars of investment. You would be wise to proceed with extreme caution.

Many of these business models typically are designed to do two things:

1. Sell you a package of billing software and equipment that has value only to the extent that you are successful in establishing client revenue relationships.

2. By selling you a proprietary package of software, most of these companies will be locking you into their system, so that if and when you do get your own clients, they will provide all of your billing support - for an extra fee of course.

There are some realities of starting and operating any business - and these are equally applicable to the medical billing business:

* Most new businesses fail in their first year of business.
* Running a business takes a lot of hard work and a significant amount of start-up capital.
* Finding clients will be your number one challenge with a medical billing business or any other business.
* Most physicians and hospitals are already committed to an existing billing arrangement and will be slow to change.

While there is a possibility of getting your foot in the door and being considered to do the billing for a new healthcare account, if you hustle and sell hard, it will take time and a fair amount of skill and persuasion. To be fair, it is certainly possible to sell a few new accounts over time. But they won't come quickly, and they won't come easily. Generally speaking, this business has a fairly long sales cycle. Typically, you can expect to spend a number of months cultivating new clients. Timing is everything. A physician or clinic has to have some motivation for changing services. Generally there are two reasons they will consider switching to a new service:

1. They are not totally satisfied with their current service - in which case you will have to demonstrate how and why your service will be better than what they currently have.

2. They are hoping to get a better price - in which case you have to demonstrate how you will save them money.

Both of these reasons represent significant obstacles for your sales efforts. Given the nature of the sales process, however, if you spend enough time and call on enough people for a long enough time, you will eventually find some accounts that will sign up to give your service a try - provided you are sufficiently persuasive in your sales efforts.

Once you do sign a new billing client, you should plan on providing services for a full month before you send out your first invoice. After you send out your first bill, you can expect to wait about 30 days to actually get paid. This means that on top of the 4-6 months it will take to sell your first new account, you can plan on an additional 60 days before you get your first check. And that is just for your first account, which may be modest in size. It will not come anywhere near paying your overhead after you take out your expenses. It takes significant staying power to start any new business - which explains why most businesses of all kinds fail in their first year.

While there is certainly a great deal of opportunity in the medical billing and coding industry, it is something that requires some serious thought and homework. You need to determine what your ultimate goals are and then evaluate your options to determine the most certain and cost effective path to achieving those goals.

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