Protect Your Business with Your Medical Billing Service Contract

When we started our Medical Billing Service in 1994 there was very little information available on medical billing services let alone medical billing service contracts. In fact, some of the information indicated that you really didn’t even need a contract if you didn’t want one. That couldn’t be further from the truth! Having a contract for your Medical Billing Service is very important to protect both you and the provider.

Many new billing services ask us for a sample contract or a copy of our contract. Using a sample contract or somebody else’s contract is not a good idea. It would be like taking somebody else’s will, whiting out their name and writing in yours. The only time it will hurt you is when you die, and then your family could be in trouble. The same can be said of a sample contract. If nothing bad ever happens, the sample contract is fine. But if a problem occurs it may not work out so well.

When starting your new business no one wants to think about things going wrong, but unfortunately in this business things do go wrong and we all need to be covered by a comprehensive contract when this happens. It may not be anything you did wrong, and it may not even be anything the provider did wrong, but sometimes things happen that are beyond our control. If you do use a sample contract and then two years later find yourself in court with a former client you are going to wish you had looked into writing the contract a little more.

Just having a contract doesn’t cover it. You need to make sure the contract is very specific to your company. When we started we used a very simple contract that really didn’t cover much at all. When situations arose that were problems our contract was no help. We had to re-write it once we had been in the business for a while and knew what needed to be covered.

So where does a new billing service start when they haven’t been in business long? It’s hard to write a contract covering all areas and what to do when you haven’t experienced it yet. Most new billing services are working on limited capital and don’t like to spend money on a lawyer writing a contract for them. Unfortunately many new services cut corners here to save money, but that’s not a good idea.

Your contract should be at least looked over by a lawyer, if not written by one. If possible you should try to find a general practice attorney who specializes in contracts. All the better if he or she has some experience in the medical billing field. You can save money by preparing carefully before you meet with your lawyer.

Start by making a list of things you want to cover in your contract. List all of the services you will be providing and how you charge for them. In addition to how you will charge you will want to list how and when you expect to be paid. Add the provider’s responsibilities to the list. List how you will receive the patient and claims information, and what information you expect from the provider. Other terms you will want to cover are what happens if you don’t get paid, how either party can terminate the contract and what happens when you do term.

There are really a lot of important issues that you need to cover – many potential situations to think about. It is a good idea to try to think of everything that can go wrong in the relationship and write down your feelings about how those situations should be handled. You should be able to come up with a long list. In the circumstances of a new biller it can be difficult to know what can go wrong. It has been sixteen years since we started our medical billing business and we are still learning about new things that can go wrong.
Most providers expect to sign some form of contract when using a third party service and generally expect the billing service to produce it. They want to make sure they are covered as well as the medical billing service. Going over the contract with a provider starting out with you can set the stage for a successful relationship. You can go over the terms carefully making sure the provider understands what you need to make it a beneficial partnership. Most of us when we are starting our businesses do not realize how much a good contract can affect their business.

Contracts are kind of like insurance, you don’t need them until there’s a problem. But when there is a problem, it’s a relief to have one. There are really a lot of areas that you need to make sure you are covered in and a contract is really the only way to do that.

We have found that so many people need information on how to write their contract and what needs to be in a contract that we decided to write a book on it. It will be available September 1, 2010.

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2 Responses to “Protect Your Business with Your Medical Billing Service Contract”

  1. Laurie Gentle Says:

    I know you need a contract when you start a medical billing company but, you are to vague on what needs to be in it. If you would give some suggestions like a recipe for a cake you don’t have to give the measurement get the ingredients. What type of legal things could go wrong? How do you break a contract? How can I make a list of things I what in my contract if I have never had one. I hope you can help me.
    Thank you, Laurie Gentle

    • solutionsmedicalbilling Says:

      That is the exact reason we decided to write a book on the subject. There are so many things that need to be considered, and so many situations that can arise. It would be impossible to include all of that in an article or a blog post. The book will be available on September 1st. It will be $37 but will be offered at a 15% discount to any newsletter reader or forum member. We kept the cost very reasonable and included information not only on contracts, but E&O insurance and compliance plans too as well as pricing structure for your medical billing business. We cover all areas of what should be included in a contract, scenarios of situations that can arise, and sample wording. We are very excited about the release of this book as there is no other information like it out there. One of the moderators on our forum, Linda Walker, is a paralegal who looks over contracts as part of her services. She has proof read the book for us and said that she feels it is just what people need to guide them on writing their contract. (Thanks Linda!)


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