Sample Contracts Don’t Work

I know we have written on this many times, but it can’t be said often enough…….  If you are a billing service, make sure you have a good contract!  Even having the best contract in the world does not mean you will never have an unpleasant situation but having a good contract will help you avoid many unpleasant situations and help you navigate through the ones that cannot be avoided.  We see posts on our forum all the time about difficult situations that billing services find themselves in.  Having a well written contract that covers all of the issues helps to prevent, or handle many of these situations.  Recently we had a post by someone in an unexpected predicament with one of his providers.  It is very recent so we still don’t know the outcome but here is what he wrote:

“I had a client for 2 years that never complained and as far as I knew things went along splendidly. I would go to his office at least 1x a week at his request because he was close and it made him happy. I’m a outsourced billing service. In June he decided he wanted me to work in the office. I declined because I have other clients & that would change our contract. I worked hard in June to change his mind. Until he kept insisting that I work in his office so I had to tell him NO. On June 19 he cut my access to his billing software. At this point he already owed me for May. I met with him a few times to try and resolve the issues he had. I told him he had to give me a 30 day notice in writing as per our contract. He said he would give me 30 days but I had to serve them in his office. Which I could not do. I said I would come 2 or 3 days and send my employee’s in but that was not good enough. It was me or nothing. So after 3 letters from my attorney he paid me for May. But refuses to pay me anything for my billing in June. Remind you he cut my access and gave me notice June 19th. Which would mean he owed me a % until July 19 if I had gotten my 30 days notice. He says he is not paying me b/c I did not come into the office to work. My contract is simple and I am sure I could win this in court. He owes me at least $4500. Now that I have my May check the advice I need is do I risk him bad mouthing my all over town for $4500. Maybe he won’t but maybe he will. Maybe it would make no difference. I have other clients. But I was just getting my foot in the door locally. Maybe he will bad mouth me anyway. He has it in is head I billed wrong. But I didn’t. I have it in my head he was just having a really good month in june and didn’t want to pay me my %. ADVICE? ”

We don’t know what his contract specifies, but in a case like he is describing a good contract is crucial.  There is really no good outcome that can be expected but with a good contract at least he has a better chance to be reimbursed some of what he is do.

Tips for a good contract:

•    DON’T copy someone else’s!  You need to write your contract for your needs
•    Consider everything that can come up or go wrong and write what you would want done to handle it
•    Make sure there is a specific way to terminate the contract from either end and spell out what situations that can occur

For more information on contracts see our book “Write a Kick Butt Contract for Your Medical Billing Service”

Michele Redmond
Vice President

Solutions Medical Billing Inc
1-800-490-4299  ext. 101
1-315-207-4222  ext. 101
Fax:  315-865-6359


2 Responses to “Sample Contracts Don’t Work”

  1. Stephanie (Denison) Koiner Says:

    I used “Write a kick butt contract for your medical billing service” as a guide for my contract. I also listed everything I wanted in my contract, including procedures once that 30 day notice is given. I tried to cover everything that had been an issue/problem in the past with a provider, such as payment due date and ceasing billing services if an invoice is 15 days past due.
    I then took my rough draft to an attorney to draw up my contract based on that draft and list. We met twice to discuss certain issues before I had a finalized contract that we were both happy with. Although it is impossible to list out every scenario that might occur, there are many issues that need to be spelled out to avoid problems. Granted, quite a few things in my contract were included due to problems I have encountered in the past 7 years when I started doing billing part time in addition to my full time. job. But, I can’t stress enough the importance of having a good contract drawn up by an attorney.

    • solutionsmedicalbilling Says:

      Glad our book helped. That is why we wrote it. When we started we had no idea about writing our contract and we didn’t have a good one. Over the years we learned what needed to be included in a good contract. We wrote the book to share our experience and what we have learned since so many people ask for copies of contracts, or help writing theirs.

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