How percentage-of-collections billing works

Many medical billing companies, Billrova included, charge a percentage of collections. Here is what that means and what to check before you agree to it.

The basic idea

The billing company’s fee is a set percentage of the money it collects for your practice. If more is collected, the fee is higher. If nothing is collected, there is no fee.

Why practices choose it

• The cost follows your revenue. In a slow month, the bill is smaller.
• The incentive is shared. The company earns only when you are paid, so unpaid claims are its problem too.

What to pin down in writing

• What counts as collections. Insurance payments only, or patient payments as well? What about copays taken at your front desk?
• Old claims. Does the same percentage apply to old unpaid claims the company recovers?
• Other charges. Are there setup fees, monthly minimums or fees for ending the agreement?
• How the invoice is built. You should be able to check the fee against a report of what was collected.

How it compares with other models

A flat monthly fee is predictable, but it is the same whether or not your claims are paid. A fee per claim follows your volume, but it pays the company for sending claims, not for getting them paid.

A fair caution

With a percentage model, a company could be tempted to chase the large, easy claims and leave the small, difficult ones. Ask how small balances and hard denials are handled, and look for them in your reports.

How Billrova does it

Our fee is a percentage of what we collect for your practice. No collections, no fee. The percentage is agreed in writing before we start.