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Medical Billing Business Plan
Start your own medical billing business plan
Physicians 1st Billing and Claims
Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.
Billing services currently exist to manage medical practices. These services relieve medical professionals of tedious detail work, but rarely do they offer a means to substantially maximize the practice’s bottom line. Physicians 1st Billing and Claims will not only free office staff for more crucial tasks, but will also maximize return from insurance carriers.
National statistics show only about 70 percent of insurance claims, initially submitted on paper, are ever paid by insurance carriers. With electronic submission Physicians 1st Billing and Claims can increase the percentage of claims paid to around 98 percent.
Additional statistics indicate that it currently costs a medical practice between $8.00-$10.00 per claim to process insurance for their patients. Physicians 1st Billing and Claims can reduce these costs by 50 percent or more.
Statistics show turnaround on paper insurance claims to be 30, 60, even 90 days or longer, creating serious outstanding receivables for the practice. By submitting claims electronically, Physicians 1st Billing and Claims can generally have money in the physician’s hand within 14-18 days. Of course, this reduces outstanding receivables proportionately and tremendously improves cash flow.
Statistics also show a 30 percent suspension/rejection rate for paper insurance claims. This doesn’t mean that the claims are never paid. What it does mean is medical staff must hassle with insurance carriers over payment. With the extensive editing performed on electronic claims prior to their transmission to carriers, this percentage is reduced to 2-3 percent. Claims are submitted with a 98 percent accuracy rate.
For many years physicians graduated from medical school under the premise that they were going to run a “practice.” “Businesses” were for other professionals. Many simple administrative procedures were neglected, such as:
- Keeping current with insurance specifications and regulations, so that claims were paid on a timely basis,
- Concentrating on collecting receivables and co-payments,
- Ensuring that fees were kept at the maximum allowable insurance carriers were paying, or
- Procedure codes were current so that claims weren’t suspended or rejected.
For many offices, outstanding receivables grew tremendously and annual bad-debt write-offs became routine. But adequate profit margins allowed medical practices to ignore sound business procedures. Medical practice complacency toward industry change is in the past. Physicians’ heads raised and they began taking note of public opinions toward health care reform issues four years ago. With the onslaught of managed care organizations into the industry, physicians are finding profit margins shrinking. They are now alert to the fact that in order to remain in business into the 21st century, they will have to adopt more efficient business practices. Physicians 1st Billing and Claims is prepared to assist local health care providers move through the last of the 20th century and into the 21st century with sound practices that will guarantee business success and, in turn, guarantee quality health care for our families and our country.
Physicians 1st Billing and Claims is contributing over $9,000 to this business. We are requesting to borrow another $5,000. Please give this detailed business plan your attention. The use of these funds is explained in the Start up Summary section.
- To acquire one account by the end of month two.
- To process 1,500 claims a month by month 15.
- To become recognized as a local industry expert in the field of medical reimbursement.
- Code optimization.
- Managed care contract analysis.
- Full practice management.
- Customized reporting.
- Medical transcription.
- Fee analysis.
- Medicare financial impact analysis.
Physicians 1st Billing and Claims is a medical reimbursement consulting firm dedicated to helping medical practices become more efficient and save money by allowing them to out-source their insurance processing and medical billing to an expert reimbursement service. We intend to have complete one-stop-shopping for all medical practice administrative functions by the end of 1998. We intend to make enough profit to repay our business-start-up loan and finance continued growth and development with our quality service.
1.3 Keys to Success
Since 1985, the Federal Government has been urging the health care industry to submit insurance claims electronically. Statistics prove that electronic submission can save millions of dollars annually for the industry. Presently, 95 percent of all pharmaceutical claims and 70 percent of hospital claims are submitted electronically. Physicians and dentists trail far behind, with only 25-30 percent.
The Federal Government is not happy with this situation so in 1990, Congress mandated that physicians are required to file claims on behalf of all their Medicare patients. Many doctors were not prepared for this deluge of paperwork. Eight years later doctors are still climbing out from under the paperwork. In 1996 the motions calling for electronic submission of all Medicare claims were being echoed throughout the halls of congress. No mandate was passed but the paperwork continues to mount up and as baby boomers near retirement age the paper problem will only get worse and those echoes will turn into screams. This year in the U.S. over 1 trillion dollars worth of medical charges will be issued. This amounts to 9 billion medical claims. Medical practices will be forced to meet the mandates, and growing mountains of paper and most are not currently equipped to handle the transition. The sensible solution is to out-source the process to experts that are prepared to save the practices money, produce a much faster return from insurance carriers, and handle the claims with a high degree of accuracy. There aren’t many businesses that can say the Federal Government is behind them all the way.
A second key to our success will be flexibility. Physicians 1st Billing and Claims understands that each medical practice is unique. Even practices of the same specialty will have different staff and offer different services. Physicians 1st Billing and Claims will evaluate the needs of each practice and offer solutions to help the practice become more efficient. Some may want all the services we offer and some may select only a few. Our billing will be customized to each office’s needs.
A third key is our diversified services. Physicians 1st Billing and Claims offers a one-stop-shopping experience for medical administrative services.
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Medical Billing Business Plan Template
Written by Dave Lavinsky
Medical Billing Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their medical billing companies.
If you’re unfamiliar with creating a medical billing business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a medical billing business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your medical billing business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a medical billing business or grow your existing medical billing company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your medical billing business to improve your chances of success. Your medical billing business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Medical Billing Businesses
With regard to funding, the main sources of funding for a medical billing business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan (hand it to them in person or email to them as a PDF file) and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for medical billing companies.
How to Write a Business Plan for a Medical Billing Business
If you want to start a medical billing business or expand your current one, you need a business plan. The guide and sample below details the necessary information for how to write each essential component of your medical billing business plan.
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of medical billing business you are running and the status. For example, are you a startup, do you have a medical billing business that you would like to grow, or are you operating a chain of medical billing businesses?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overv iew of the medical billing industry.
- Discuss the type of medical billing business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
In your company overview, you will detail the type of medical billing business you are operating.
For example, you m ight specialize in one of the following types of medical billing businesses:
- Light :These types of companies provide straightforward billing services and revenue management.
- Full Service :These types of companies provide a full suite of billing services including practice management, EHR, revenue cycle management & medical billing, patient engagement, care coordination, and population health management.
- Boutique :These are smaller companies who have expertise in specific medical practice and/or specialty.
In addition to explaining the type of medical billing business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of patients served, the number of cases with positive outcomes, reaching X number of clients served, etc.
- Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry or market analysis, you need to provide an overview of the medical billing industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the medical billing industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your medical billing business plan:
- How big is the medical billing industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your medical billing business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your medical billing business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, schools, families, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of medical billing business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers. Ideally you can speak with a sample of your target customers before writing your plan to better understand their needs.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are othe r medical billing businesses.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes psychiatrists, other healthcare providers, or members of the clergy. You need to mention such competition as well.
For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of medical billing business are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide options for the uninsured?
- Will you offer products or services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a medical billing business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type o f medical billing company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide psychodynamic therapy, behavior therapy, cognitive therapy, or integrative therapy?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your medical billing company. Document where your company is situated and mention how the site will impact your success. For example, is your medical billing business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your medical billing marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Advertise in local papers, radio stations and/or magazines
- Reach out to websites
- Distribute flyers
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your medical billing business, including answering calls, planning and providing therapy sessions, billing insurance and/or patients, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth session, or when you hope to reach $X in revenue. It could also be when you expect to expand your medical billing business to a new city.
To demonstrate your medical billing business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing medical billing businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a medical billing business or successfully running a small medical practice.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you see 5 patients per day, and/or offer group therapy sessions ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your medical billing business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a medical billing business:
- Cost of equipment and office supplies
- Payroll or salaries paid to staff
- Business insurance
- Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of insurance plans you accept.
Writing a business plan for your medical billing business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the medical billing industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful medical billing business.
Medical Billing Business Plan FAQs
What is the easiest way to complete my medical billing business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily write your medical billing business plan.
How Do You Start a Medical Billing Business?
Starting a medical billing business is easy with these 14 steps:
- Choose the Name for Your Medical Billing Business
- Create Your Medical Billing Business Plan
- Choose the Legal Structure for Your Medical Billing Business
- Secure Startup Funding for Your Medical Billing Business (If Needed)
- Secure a Location for Your Business
- Register Your Medical Billing Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Medical Billing Business
- Buy or Lease the Right Medical Billing Business Equipment
- Develop Your Medical Billing Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Medical Billing Business
- Open for Business
Learn more about how to start your own medical billing company .
Where Can I Download a Free Business Plan Template PDF?
Click here to download the pdf version of our basic business plan template.
Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.
We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.
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Medical Billing Business Plan Template
Medical billing business plan for starting your own business
Do you want to start a medical billing business? Well, considering the rising costs of healthcare in the U.S. and the complexities involved in medical payments when there is 3 rd party (insurance company) involved, the business can be immensely profitable.
A medical billing business facilitates patients and medical practitioners as well as health insurance companies in dealing with complex medical transactions. For this, the medical billing specialist does a range of tasks such as filing the claim and keeping up the patient’s record and medical history.
To start this business, the first step is to make a business plan for medical billing company. In case you don’t know the essentials, you can take help from here. Here we are providing a business plan for a medical billing startup, Medi Assist. If you will be raising a loan, you’ll also have to see business plan for a loan from a bank.
2.1 the business.
Medi Assist will be based in San Diego. The business will provide expert medical billing specialists to physicians, dentists, surgeons, and others in the profession. After 5 years of the launch, the business will be expanded to one more location.
2.2 Management of medical billing
To make sure that you manage your medical billing startup well, it is essential to decide everything in a medical billing company business plan. Since the business requires expertise and specialization in the domain, you must manage the functions effectively. For each case, you’ll need to arrange for commute, legal assistance, and access to data for accurate record keeping.
To assist you we will provide the list of employees, management positions, and their spheres of authority in this medical billing business plan pdf. Though you can take help from this sample business plan for medical billing, it will be best practice to hire a business planning expert for making your business plan if you are new to the field.
2.3 Customers of medical billing
Before opening a medical billing company you must recognize groups of your target customers. The customers of Medi Assist are expected to be:
- Medical Practitioners
2.4 Business Target
It is essential to set business targets even when you work on simple ideas like business plan for a medical laboratory or nursing business plan . It is to remain focused and directed throughout the operations of your business.
Our targets to establish our name in the market will be given in the later sections. However, our financial targets are given as below:
3.1 company owner.
Medi Assist will be owned by Mariana Downey. She is an expert medical billing agent and has been working in the domain for more than 6 years.
3.2 Why the medical billing is being started
Mariana decided to start medical billing business because of her interest and expertise in the field. Since the business requires specified knowledge and cannot be run by any layperson, Mariana found that there are more prospects of getting successful in this domain.
3.3 How the medical billing will be started
If you are looking for what do I need to start a medical billing business, we’re providing a step-wise procedure here.
Step1: Research & Plan
The first step is to carry out intensive research on how to start your own billing company . After that, you will have to pen down details in a business plan in a systematic manner. To assist you with this, we’re providing sample medical billing business plan in this blog.
Step2: Fund & Recruit
The next step is to incentivize your venture and manage financial resources. You’ll then need to invest your money to purchase the required equipment, rent a space, and employ the personnel.
Step3: Manage & Systemize
After getting monetary and fiscal resources, you’ll have to devise a management structure to systemize all operations.
Step4: Exist on the Web
Next, you will have to make sure that you have a strong web presence. Today, clients are likely to search for medical billing services on the web and seek the services of only those whose websites come at the top. Thus, it is a must to ensure an online presence.
Lastly, you will have to advertise your startup to reach your target audience. In this medical billing business plan example we will be listing the techniques adopted by Medi Assist to advertise their venture.
Services of medical billing
Before you start medical billing company, it is essential to search for how to start a medical billing business and read at least one medical billing service business plan. After this, you will be able to know which services are being provided by your competitors. And thus decide the services that you want to provide as you start medical billing business. In this sample business plan for medical billing, we’re providing the services provided by Medi Assist.
- Setup Patient Record
Our medical billing experts will set up patients’ medical histories and records of all transactions related to healthcare.
- Claim Filing
We will help file medical claims both in manual and electronic forms.
- Negotiating Healthcare Contracts
We’ll negotiate the medical and healthcare contracts by dealing with all three parties at a time. The three parties can be patients, medical assistance providers, and insurance companies.
- Upkeeping & Updating Record
We will maintain the patient’s record and update it from time to time both manually and electronically.
Marketing Analysis of medical billing
If you’re looking for how to open a medical billing company, you are on the right page. In this medical billing business plan sample we have provided full guide on how to start medical billing business. After you have gone through the initial steps, you need to undergo a thorough market analysis. Unlike cannabis business plan or reiki business plan , market analysis for medical billing can give you a tough time. It is because the business is still unknown to many and does not involve just one-time interaction. The target customers would remain in contact for a long time and hence they would prefer to see how you are more reliable and efficient than your competitors. Therefore, you need to investigate the already operating medical billing businesses, market trends, inclinations of customers, and pricing policies that can help you get through. If you are starting medical billing business from home you’ll still need to do market analysis.
5.1 Market Trends
The growth prospects of medical billing startup are encouraging. According to IBISWorld, the market size of medical billing services stands at $5 billion in the U.S. even though only 1761 such businesses are operating there. If you want to enter this enterprise, you can also make a lot within a short time.
5.2 Marketing Segmentation
Before starting medical billing business it is also essential to do market segmentation. For this, you’ll have to divide the entire population into distinct groups. In this free medical billing business plan template on how to start your own medical billing company, we’re providing the market segmentation done by Medi Assist.
5.2.1 Medical Practitioners
This category includes doctors and healthcare providers. They will need our services of filing claims, checking the credentials, and keeping a record of patients.
This segment will include the medics who perform minor or major surgeries.
Dentists who provide teeth cleaning, healing, and maintenance services will also be our customers.
This segment may include medics who aren’t covered in the above categories such as physiotherapists. Moreover, hospital groups and healthcare provider organizations are also included in it.
5.3 Business Target
- Expand our service sector to at least one more locality by the end of the first 5 years
- Maintain a CSAT score above 90% throughout the service years
- Capture 15% of the market share within three years of operation
5.4 Product Pricing
Our prices are a little higher than others in the same profession. But due to our expertise, Mariana’s experience in the field, and our sales strategy we still expect to get more customers than them.
Marketing Strategy of medical billing
Before starting a medical billing company you will have to devise ways by which you want to reach out to your target customers. In this medical billing company business plan on how to start a medical billing and coding business, we are providing the sales strategy of Medi Assist.
6.1 Competitive Analysis
- Our employees are highly specialized and experts in their domains.
- We are offering several discounts, in the beginning, to get known.
- Customers are our topmost priority, we are willing to go to all lengths to facilitate them.
6.2 Sales Strategy
- We’ll offer a 50% discount to our first 50 customers.
- We’ll offer a 20% discount on all our services in June and July.
- We’ll advertise our startup on social media, in local newspapers, and in magazines.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Personnel plan of medical billing
The staff of medical billing business cannot comprise anyone but highly experienced and qualified professionals. In this medical billing business plan example we’re providing the list of employees of Medi Assist along with their job descriptions and expected salaries. If you’re going to make business plan medical billing you should also do the same.
7.1 Company Staff
Mariana will hire personnel for the following positions:
- 1 Co-Manager to oversee all operations
- 1 Financial Manager
- 5 Medical Billing Specialists
- 2 Accountants
- 1 Legal Expert
- 1 Web Designer
7.2 Average Salary of Employees
Financial plan of medical billing.
If you are going to start medical coding and billing business you must be wary of how profitable is medical billing business. Well, the business is immensely profitable and the profit margin is expected to increase more in the upcoming years.
To assess, how much you would be able to make as per your resources, investment and sales, you will be needing to create a financial plan for your business. For that, you can take help from the financial plan provided here as well as those listed in business plan for urgent care center and business plan for veterinary clinic .
8.1 Important Assumptions
8.2 break-even analysis.
8.3 Projected Profit and Loss
8.3.1 profit monthly.
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
8.5 Projected Balance Sheet
8.6 business ratios.
- Is the medical billing business profitable?
Yes, the business is profitable. You can see it from the profit generated by Medi Assist in the first 3 years of their launch as given in this sample medical billing business plan.
- How do I start a medical billing business?
As a first step, you need to make medical billing business plan and then the later steps include executing the business plan medical billing in letter and spirit.
- How do medical billing companies make money?
Medical billing companies make money by offering several services such as filing claims for patients, upkeeping and updating medical records, etc.
- How do I get medical billing clients?
To get medical billing clients, you’ll need to advertise your services on social, electronic, and print media. You can explore more techniques by visiting the sales strategy section of this medical billing business plan example.
Download Medical Billing Business Plan Sample in pdf
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Medical Billing Business Plan Template
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How to Write a Medical Billing & Coding Business Plan [Sample Template]
Are you about starting a medical billing and coding company ? If YES, here is a complete sample medical billing and coding business plan template & feasibility report you can use for FREE . Medical billing and coding business owners process and administer medical insurance policies and claims. They help doctors and other healthcare providers collect payments from insurance companies and Medicare.
Starting a medical billing and coding business is not too expensive except for the money required to rent, furnish an office space and purchase the applicable software apps. Running this type of business requires that you should be trained and it is indeed a very lucrative business in the United States, Canada, Australia and the United Kingdom because of the desire for continuous engagement between clients and key stakeholders in the healthcare industry.
A Sample Medical Billing and Coding Business Plan Template
1. industry overview.
A report published by IBISWorld shows that the medical billing industry is worth $3 billion annually with an 8.8 percent growth between a five – year period (2011 to 2016). There are more than 2,300 medical billing businesses in the united states of America employing over 7,000 people.
The industry is valued that high due to the rising demand for medical billing services which has led to more operators entering into the industry. Demand in this industry has risen due to the growing population of the baby boomers who require medical billing services after visits to the doctors.
Over the next five years (2016 to 2022), the industry is predicted to experience steady growth as there will be more senior citizens who will make their demands via Medicare.
Also within this period, the number of people with insurance is expected to rise in line with healthcare reforms which will then allow those with pre-existing conditions to be able to receive insurance. This growing demand will help the industry not only have huge demands which will be taken care of by operators but this will also boost revenue for the industry.
It should be noted however that regardless of the huge demands experienced in this industry, the market share concentration is still quite low especially as only one operator accounts for more than 14 percent of the total industry revenue, while the remaining operators in the industry generate less than 5 percent each in revenue for the industry.
Most of the operators in this industry operate on a large scale and therefore provide a variety of services such as claims adjustment, risk and consulting. According to IBISWorld, the largest player in the industry caused market share concentration to increase with its acquisition streak and a growing pace that has outpaced industry’s growth.
A recent researched published by Grand View Research, Inc. in 2015, shows that the medical billing outsourcing market was worth over $6 billion and has been predicted to reach $17 billion by 2024.
This is largely due to the fact that medical billing has become an intricate part of medical practice, especially as there have been several challenges from in-house billing processes especially with untrained staff, lack of proper financial policy, improper IT structure, as well as billing errors.
These challenges are why most hospitals and doctors’ offices prefer to outsource their medical billing processes; 95 percent of most independent physicians have stated that they prefer outsourcing their medical billing processes to running one in house.
Globally, North America has the highest revenue growth in this industry. The United States has had rapid changes in its healthcare structure and with rising healthcare costs have been the major driver in the North American region. In the industry, consolidation has been one of the major factors helping the growth of the market.
Hospitals are one of the largest clients of medical billing companies and provide the highest revenue especially with the rising healthcare costs which has caused profits to decline for hospitals and which has seen them turning to medical billing businesses to help them manage their revenue.
The medical billing market is segmented into in-house and outsourced billing according to Grand View Research, Inc. As at 2014, the total costs that were incurred by providers for in-house operations amounted to $252 billion. These costs were inclusive of running costs such as IT costs and maintenance cost for in-house billing team as well as administrative team.
This is in comparison to outsourcing which saw a significant reduction in costs for hospitals including fewer errors. Also, outsourcing meant that doctors and physicians could now concentrate on their primary duty which is to provide the best possible care to patients without having to worry about managing billings and recovering claims.
Even though hospitals had the highest market share as at 2015, the positive trend was held in check by increasing demands for medical billing outsourcing services by physician offices and private clinics. However, hospitals are still expected to lead in generating the highest revenue for this industry as they had more claim volumes compared to independent physicians and private clinics.
Globally, the medical billing outsourcing market is broken down into North America, Europe, Asia Pacific, Latin America as well as the Middle East Africa, with North America providing the most revenue for the market.
2. Executive Summary
Jeff Cole® Medical Billing and Coding Company, Inc. is a registered and licensed healthcare consulting firm that specializes in medical billing and coding services. The business will be based in Saint Paul – Minnesota and we have been able to secure a standard office facility.
We are aware that to run a standard medical billing and coding business can be demanding which is why we are well trained, certified and equipped to perform excellently well in our chosen line of business.
Jeff Cole® Medical Billing & Coding Company, Inc. is a client – focused and result driven medical billing and coding services firm that provides broad – based services at an affordable fee that won’t in any way put a hole in the pocket of our clients. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they hire our services.
At Jeff Cole® Medical Billing & Coding Company, Inc., our client’s best interest would always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hire professionals who are well experienced in the medical billing and coding services industry.
Jeff Cole® Medical Billing & Coding Company, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Our plan is to position the business to become the leading brand in the medical billing and coding services line of business in the whole of Saint Paul – Minnesota, and also to be amongst the top 10 medical billing and coding services businesses in the United States of America within the first 10 years of operation.
We are optimistic that this will surely be realized because we have done our research and feasibility studies and we are enthusiastic and confident that Saint Paul – Minnesota is the right place to launch our medical billing and coding services business before sourcing for clients from other cities in The United States of America.
Jeff Cole® Medical Billing & Coding Company, Inc. is founded by Jeff Cole. Jeff Cole has over 15 years of experience working at various capacities within the healthcare services industry in the United States of America. Mr. Jeff Cole graduated from both Minnesota State University with a Degree in Accounting, and Yale University and he is a chartered accountant with background in medical billing and coding.
3. Our Products and Services
Jeff Cole® Medical Billing & Coding Company, Inc. is in the medical billing and coding services industry to service a wide range of clients and of course to make profit, which is why we will go all the way to ensure we follow international best practices when executing our jobs. Our service offerings are listed below;
- Medical insurance claims submissions
- Medical insurance billing and coding
- Medical insurance claims adjustment
- Back-office, administrative support and consulting
- Claims processing
4. Our Mission and Vision Statement
- Our vision is to become the number one choice as far as medical billing and coding is concerned in the United States of America.
- Our mission is to establish a world – class medical billing and coding company that will become a standard for running medical billing and coding business not just in the United States of America, but also other parts of the world.
Our Business Structure
Ordinarily we would have settled for two or three staff members, but as part of our plan to build a standard medical billing and coding company in Saint Paul – Minnesota, we have perfected plans to get it right from the beginning which is why we are going the extra mile to ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.
The picture of the kind of medical billing and coding business we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands available in and around Saint Paul – Minnesota as long as they are willing and ready to work with us to achieve our business goals and objectives.
We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer
- Billing and Coding Administrator (Consultant)
Admin and HR Manager
Marketing and Sales Executive
- Customer Care Executive/Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Office:
- Upturns management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Generates, interconnects, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Medical Billing and Coding Administrator (Consultant)
- Responsible for handling medical insurance claims submissions
- In charge of medical insurance billing and coding
- In charge of medical insurance claims adjustment
- Handles back-office, administrative support and consulting
- Controls claims processing
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations
- Oversees the smooth running of the daily office activities
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of relevant projects
- Writes winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- create reports from the information concerning the financial transactions recorded by the bookkeeper
- Prepares the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risk analysis
- Performs cash management, general ledger accounting, and financial reporting for one or more properties
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Client Service Executive/Front Desk Officer
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels / documents for the company
- Distribute mails in the organization
- Handles any other duties as assigned by the line manager
6. SWOT Analysis
Jeff Cole® Medical Billing & Coding Company, Inc. is in business to become one of the leading medical billing and coding companies in the United States of America and we are fully aware that it will take the right business concept, management and organizational structure to achieve our goal.
We are quite aware that there are several medical billing and coding companies all over the United States of America and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well equipped to confront our threats.
Jeff Cole® Medical Billing & Coding Company, Inc. employed the services of an expert HR and Business Analyst with bias in consulting to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Jeff Cole® Medical Billing & Coding Company, Inc.
Our strength lies in the power of our team. We have a team that can go all the way to give our clients value for their money; a team that is trained and equipped to pay attention to details and to deliver excellent medical billing and coding jobs. Aside from the synergy that exists in our carefully selected workforce, we have a very strong online presence, we are well positioned and we know we will attract loads of clients from the first day we open our doors for business.
As a new medical billing and coding company, it might take some time for our organization to break into the market and gain acceptance especially from corporate clients in the already saturated medical billing and coding services industry; that is perhaps our major weakness. So also, we may not have the required cash to give our business the kind of publicity we would have loved to.
The opportunities in the medical billing and coding services industry is massive considering the number of hospitals and medical insurance related businesses who can’t do without the services of medical billing and coding service providers.
As a matter of fact, rising demand for medical claims processing services has attracted new entrants to the industry and growth in the senior population will boost the number of doctors’ visits, spurring demand for the services of medical billing and coding. As a standard medical billing and coding business, we are ready to take advantage of any opportunity that comes our way.
Some of the threats that we are likely going to face as a medical billing and coding business operating in the United States are unfavorable government policies , the arrival of a competitor within our location of operation and global economic downturn. There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
Experts project that the trend in the medical billing and coding industry will experience steady growth over the next five years, as the growing senior population creates demand via Medicare. Also, the number of insured people will rise in line with healthcare reforms, as people with pre-existing conditions are able to receive insurance.
The growing senior population will keep driving demand for the industry’s services over the next five years, helping revenue blossom for medical billing and coding companies.
Another notable trend in the medical billing and coding services industry is that operators have cut employment to retain margins. Meanwhile, capital investments have accounted for a rising portion of revenue as technological advancements have been adopted to streamline operations and increase efficiency.
8. Our Target Market
We have positioned our medical billing and coding company to service businesses in the healthcare industry and the medical insurance industry in and around Saint Paul – Minnesota and all over key cities in the United States of America.
We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to service the following customers;
- Independent Physicians
- Health centers
- Medical laboratories
- Medical insurance companies
- Private clinics
Our competitive advantage
Jeff Cole® Medical Billing & Coding Company, Inc. is launching a standard medical billing and coding company that will indeed become the preferred choice for hospitals and other healthcare facilities in the United States of America.
One thing is certain; we will ensure that we offer a wide range of medical billing and coding related services that are in high demand in the healthcare industry . We will also go all the way to ensure that we give out discount as at when due and deliver excellent services devoid of errors.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Jeff Cole® Medical Billing & Coding Company, Inc. is in business to offer a wide range of medical billing and coding related services and also to
10. Sales Forecast
We have put plans in place that will help us always attract customers that will translate to increased revenue generation for the business.
We are well positioned to take on the available market in the United States of America and we are quite optimistic that we will meet our target of generating enough income from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the medical billing and coding services industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Saint Paul – Minnesota.
- First Fiscal Year: $250,000
- Second Fiscal Year: $500,000
- Third Fiscal Year: $950,000
N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location for Jeff Cole® Medical Billing & Coding Company, Inc. we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for hospitals and medical insurance companies in and around Saint Paul – Minnesota. We have detailed information and data that we were able to utilize to attract the number of customer we want.
We hired experts who have good understanding of the medical billing and coding industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the United States of America.
In summary, Jeff Cole® Medical Billing & Coding Company, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters alongside our brochure to hospitals, dental clinics, optical centers and key stakeholders in the United States of America
- Make use of attractive hand bills to create awareness and market our services
- Position our signage/flexi banners at strategic places around Saint Paul – Minnesota
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage on roadshows within targeted neighborhood to create awareness for our services
- List our business and products on yellow pages ad (local directories)
- Leverage on the internet to promote our business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
- Join local chambers of commerce and industries to network and market our products
11. Publicity and Advertising Strategy
Despite the fact that our office is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our company. We have been able to work with our publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the hearts of our target market.
We are set to take the medical billing and coding services industry by storm which is why we have made provisions for effective publicity and advertisement of our company. Here are the platforms we intend leveraging on to promote and advertise Jeff Cole® Medical Billing & Coding Company, Inc.;
- Place adverts on community based newspapers, radio and TV stations
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business
- Ensure that our we position our banners and billboards in strategic positions all around Saint Paul – Minnesota
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Contact hospitals, dental clinics, optical center, medical laboratories, medical insurance companies and other health facilities by calling them up and informing them of Jeff Cole® Medical Billing & Coding Company, Inc.
- Advertise our business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and vans and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals
12. Our Pricing Strategy
Hourly billing for consulting related services is a long – time tradition in the industry. However, for some types of medical billing and coding services, flat fees make more sense because they allow clients to better predict consultancy costs.
As a result of this, Jeff Cole® Medical Billing & Coding Company, Inc. will charge our clients a flat fee for many basic services. At Jeff Cole® Medical Billing & Coding Company, Inc. we will keep our fees below the average market rate by keeping our overhead low and by collecting payment in advance.
In addition, we will also offer special discounted rates to startups. We are aware that some clients would need regular access to medical billing and coding consultancy and advisory services, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.
- Payment Options
The payment policy adopted by Jeff Cole® Medical Billing & Coding Company, Inc. is all inclusive and we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Jeff Cole® Medical Billing & Coding Company, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for all our services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a medical device development and manufacturing business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our startup capital on;
- The total fee for registering the business in the United States of America – $750
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
- Marketing promotion expenses for the grand opening of Jeff Cole® Medical Billing & Coding Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
- The total cost for hiring Business Consultant – $2,500
- The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
- The total cost for long – term leasing of a standard office facility – $150,000
- Other start-up expenses including stationery ( $500 ) and phone and utility deposits – ( $2,500 ).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The total cost for the purchase and installation of CCTVs – $10,000
- The cost for the purchase of office furniture and gadgets (Computers, Software Apps, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The total cost of launching a Website – $600
- The total cost for our opening party – $7,000
- Miscellaneous – $10,000
We would need an estimate of $200,000 to successfully set up our medical billing and coding company in Saint Paul – Minnesota.
Generating Startup Capital for Jeff Cole® Medical Billing & Coding Company, Inc.
Jeff Cole® Medical Billing & Coding Company, Inc. is a private registered business that is solely owned and financed by Mr. Jeff Cole and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start up capital to 3 major sources.
- Generate part of the start – up capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $50,000 ( Personal savings $35,000 and soft loan from family members $15,000 ) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Jeff Cole® Medical Billing & Coding Company, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to offer our services a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while. Jeff Cole® Medical Billing & Coding Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.
Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of office facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed software apps, tools, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with key stake holders in the healthcare industry and medical insurance industry: In Progress
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Creating a medical billing business plan.
Projecting income when you start a new business is a critical step of business planning. In fact, ClaimTek recommends that you write a detailed business plan that includes the following sections and sub-sections:
- Executive Summary
- Company Presentation
- Major competitors and competitive positioning
- Market barriers
- Market demand
- Marketing plans (advertising, public relations, direct selling)
- Budget projections
Your business plan can be written in a formal or informal style; that's up to you. But whichever method you choose, crafting a well-conceived business plan is a critical step in helping you get your business off to a solid beginning. Two issues are particularly important in writing your business plan:
Mission Statement. Your company's mission statement is a short statement that explains what you believe is the heart of your business. It expresses what you want your customers to think about you, such as "To be a dedicated service-oriented company that guarantees the satisfaction of clients through attention to detail and timeliness on electronic claims and full practice management services.
Budget Projections: It is most helpful to do a one-year income projection on a month-by-month basis. In the first few months, it is best to estimate realistically how much your startup expenses will be and allow for a period in which you may have no clients or perhaps only one or two. Then project your income over the next few months according to the assumptions you would like to make for adding more clients to your roster.
For more details on writing a professional business plan for your startup medical billing service, you may visit www.bplan.com . Search for "Medical Billing Business Plan" or simply click here . The well-known software product called "Business Plan PRO" by Palo Alto Software, Inc. incorporates guidelines for writing a professional medical billing business plan. The plan was actually written for Palo Alto Software by the owner of a ClaimTek medical billing center, Physician's 1st Billing & Claims.
Write a Killer Medical Billing Business Plan
A strong medical billing business plan is crucial for starting your billing and coding business. Here are the core elements of a business plan...
If you're thinking about starting a medical billing and coding business of your own, consider that you'll probably need to raise private capital, and for that, a strong business plan .
A well-constructed business plan allows potential financiers to learn about you and the potential your home-based medical billing business has to succeed.
If you're unsure about how to create a business plan, consider this page as your guide. You can also look for qualified business plan writers in your area.
Medical Billing Business in a Box
A successful business plan contains the following components ( click to skip to that section ):
- Mission statement
- Team member bios
- Business Profile
- Economic Assessment
1. Mission statement
This part of your business plan highlights why you want to get into business and what your goals are. Think of the mission statement like a personal essay.
You're asking people to invest money into your business. The mission statement explains why they should spend their money on your dreams.
Include well thought objectives and reasons for your business to exist, and briefly outline your competitive edge.
2. Team Member Bios
Include a thorough biography of yourself and your professional and academic history. If there are other members involved, include them as well.
This provides potential investors with a clear understanding of your character and ability.
Use the biography section to highlight moments where you have stood out from the crowd or overcome adversity to achieve a goal. If you intend to own a business, potential investors will want to know you have what it takes.
Use this section to highlight moments where you have stood out from the crowd or overcome adversity to achieve a goal. If you intend to own a business, potential investors will want to know you have what it takes to achieve success.
The biography section is also a good place to underline any specialties you've developed as part of your medical billing and coding education. This shows that you're able to develop an in-depth understanding of your subject matter.
Investors know that if you're an expert in your area, you're more likely to succeed.
3. Business Profile
The business profile section of your plan should examine your concept and feasibility in detail.
This means that you'll need to spend time thinking about and illustrating the specific functions of your medical billing and coding business so that they're easy to understand.
Back up these business functions with data to show that you've done your homework on the expected time and cost that will go into creating your business.
The business profile section should take into account how much capital you're asking for, and how long it will take to pay it back. Also aim to express an understanding of the medical billing and coding industry in your area and any market shifts on the horizon.
If you've identified potential for change in your market (either good or bad), illustrate how you intend to respond.
The more educated you are about medical billing and coding and your potential market in general, the easier it will be to entice investors.
4. Economic Assessment
The economic assessment shows...
- the current state of your market
- its potential strength or weaknesses
- where you expect to stack up relative to your competition.
This is the section of your business plan where you illustrate the potential economic impact of your business and how you can create a profit.
- the market opportunity
- the potential long-term stability of your business
- your competitive advantage.
If you can't make a case for yourself based on the numbers, it's unlikely that lenders will feel comfortable loaning you a significant amount of money.
Because of this, make sure you take great care in preparing the economic assessment. Don't be afraid to seek the help of qualified financial professionals if you need to.
You can find an example medical billing business plan here .
A typical medical billing business plan is long and full of in-depth information about your individual business idea and the industry in general.
It provides a holistic picture of where your business fits in the rest of the medical field and medical billing market, both locally and beyond.
If you run into questions about your business plan, we recommend that you search for a local business plan writer to help you. Often they can help you get through those tricky sections in a way that will be sure to catch the lenders eye.
Click for more on properly starting a medical billing business .
Need a kick start? We recommend the Medical Billing Business in a Box .
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It should be noted that there is no special software required to use these templates. All business plans come in Microsoft Word and Microsoft Excel format. Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- Loan Amortization and ROI Tools
- FREE PowerPoint Presentation for Banks, Investors, or Grant Companies!
1.0 Executive Summary
The purpose of this business plan is to raise $100,000 for the development of a medical billing business while showcasing the expected financials and operations over the next three years. The Medical Billing Company, Inc. (“the Company”) is a New York based corporation that will provide outsourced billing solutions for doctors, dentists, and related allied health professionals that have their own practices within its targeted market. The Company was founded in 2009 by John Doe.
1.1 Products and Services
The Medical Billing Company will provide medical billing solutions for physicians, surgeons, dentists, physical therapists, and chiropractors. In the future, Mr. Doe intends to develop ancillary services, such as outsourced medical administrative work, that will compliment the Company’s suite of billing services. The third section of the business plan will further describe the services offered by the Medical Billing Company.
1.2 The Financing
Mr. Doe is seeking to raise $100,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate.
1.3 Mission Statement
The Medical Billing Company’s mission is to become the recognized leader in its targeted market for effective back office billing solutions for medical professionals.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the medical billing industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target medical professionals within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Medical Billing Company, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Medical Billing Company requires $100,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Medical Billing Company, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Medical Billing Company. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.
3.0 Products and Services
The Company’s billing services will offer doctors (medical professionals) and group based health practitioners the ability to easily and affordably handle their billing needs. The benefits provided by the service will allow the practitioner to perform their services without the hassle of having to deal with administrative tasks. The Company’s position in the market will be as a full-service medical reimbursement business.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the medical billing industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2009, at which point the economy will begin a prolonged recovery period. However, medical billing businesses operate with great economic stability as medical professionals will continue to provide services to patients despite deleterious economic conditions and thus requiring specialized maintenance and management of their back office billing systems.
4.2 Industry Analysis
Nationwide, there are approximately 20,000 companies that offer outsourced medical billing management on behalf of medical professionals. Each year, this industry generates $7 billion of revenues and employs more than 80,000 people. The industry is expected to remain in lockstep growth with that of the general medical industry.
4.3 Customer Profile
Management anticipates that its primary client will be moderate sized group practices that operate in either a general or specialty capacity. As doctors now have to work more hours to achieve the same level of income as ten years ago, it is imperative that the physician be able to devote all of his/her time to helping patients. This statement is true for any professional in the healthcare field.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
The Medical Billing Company intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Medical Billing.
5.1 Marketing Objectives
• Directly contact medical professionals to discuss their medical billing issues.
• Implement a local campaign with the Company’s targeted market via the use of advertisements in local medical publications and journals.
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
5.2 Marketing Strategies
The Company intends to market its services directly to doctors, surgeons, and allied health professionals. As such, Mr. Doe will use a highly targeted marketing campaign within the target market. Specifically, and as discussed in the fourth section of the business plan, the Company intends to target group practices. The Medical Billing Company will use both traditional and experimental forms of marketing to inform, educate, and sell the Company’s medical billing and management services. Traditional means of advertising will include print and media advertising in locally based medical journals and publications. Management also intends to create a very dynamic Internet website that will allow our potential clients to learn about the Company’s medical billing services. In the future, an online billing management engine may be the centerpiece of the Company’s operations. Clients will be able to track all of their medical billing needs through the Company’s online system. The Internet platform will allow doctors to easily and quickly access all information relating to their patients’ medical billing history. Additionally, the platform will have many safeguards in place to prevent theft or misappropriation of sensitive patient information.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography about your work experience, your education, and your skill set. For each owner or key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• The Medical Billing Company will have an annual revenue growth rate of 16% per year.
• The Owner will acquire $100,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
Medical billing companies are usually insulated from decreases in the overall wellness of the economy. As stated before, healthcare is an industry that is immune from shocks to the economic environment simply because people will continue to need medical treatment regardless of economic recession. This will significantly reduce the overall risk associated with the business.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis
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- Office Copiers
- Wide Format Printers and Plotters
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How to Start a Medical Billing Company
Starting a medical billing company can be a rewarding and lucrative opportunity for many different types of professionals. Whether you have medical billing and coding credentials or you’re working to achieve them, you have the chance to start an independent or at-home business. You can also start a company by hiring and building a team of professional billers. Either way, the medical billing industry is a promising industry that’s growing year over year .
At the same time, starting a medical billing business requires capital investment, time, and effort. You will want to first make sure it’s the best fit for you! If you are interested in starting your own medical billing company, get familiar with these steps to establishing a business in medical billing and coding.
1. Understand the market
The first step to starting your own medical billing company is getting familiar with the industry. This will help you feel confident that it is the right industry to enter, and that there will be a demand for your services.
According to Kareo, it’s a great time to start a medical billing company. The industry is expected to grow over the next few years, with more practices considering the pros of outsourcing medical billing. Additionally, The U.S. Bureau of Labor Statistics predicts medical billing jobs to grow by 15% between 2014-2024, which is much faster than the national average for job growth. Since medical billing services are more in demand than ever, there is a promising opportunity for you to expand your company in the upcoming years. To get started,
Research the industry holistically
Download and take a look at Kareo’s industry report. This will give you a sense for the medical billing and coding industry as a whole.Look into your competition, as well. Do some research about other outsourced medical billing services in the area. See who their clients are, and whether or not there will be new clients who need your service.
You can also reach out to local medical practices. Ask them about their medical billing needs. For instance, are currently outsourcing? Would they consider outsourcing down the line? This will help you understand the local demand for outsourced billing services.
Then, dive deeper into the medical billing industry’s sub-sectors. For instance, the following types of medical billing jobs are in high demand:
- Dental billing jobs will grow by 10% between 2018-2028.
- Mental health and psychiatric billing is projected to become more complicated. This may cause more mental health professionals to outsource billing in the coming years.
- Family practices are outsourcing medical billing more often to improve cash flow, avoid errors, and earn more revenue.
Remember that each medical sub-sector will have its own billing and coding guidelines and procedures. AAPC is a good resource to explore the fundamentals and training necessities for each sub-sector. This research should give you a better idea about the need for your services within the local market.
2. Learn about start-up costs
As with any business, there will be capital investment involved with getting started. Depending on the size and scope of your new company, you may spend anywhere from $1,000’s to $10,000’s to kickstart your business. However, no matter what size your company will be, there’s several things you will need to get started:
- Medical billing software and licensing
- Computer equipment, plus a multi-function commercial copier
- Technical support
- A reliable business phone system
- CMS 1500 forms
As you grow your business , you will most likely spend additional costs. However, if you’re just getting started, these start-up costs should put you in a good position to get going!
3. Acquire medical billing credentials
If you don’t already have your medical billing credentials, you will need to enroll in a training course. Becoming a professional medical biller requires in-depth knowledge of billing for medical practices (including any specialty practices you may service) as well as managing insurance claims. This is very important, since medical professionals will be trusting you with the process of managing their revenue !
To acquire credentials, you can enroll in online or in-person courses. Typically, this can take you about a year or more to complete. There will also be exams you need to pass from major medical organizations, such as The American Medical Billing Association . Additionally, if you want to get certified in medical coding, you should pursue credentials from the American Academy of Professional Coders and the American Health Information Management Association .
4. Map out your business plan
Coming up with a business plan is important when starting a medical billing company. In order to acquire new customers seamlessly, you will want to consider which medical billing services you want to specialize in. Think about the things your target market will look for when choosing the best medical billing company. For instance, when getting started, ask yourself logistical questions such as:
- Do you want to set up a solo practice or partner with other medical billers?
- What is your ideal company size?
- What types of medical billing services will you specialize in?
- Which kinds of practices will you help?
- How will you structure your fees?
- Do you need to partner with an accountant to manage finances and taxes?
All of these are important questions to think through before getting started. Preparing your business from a practical standpoint will help you provide the best medical billing for physicians’ needs, and be successful in the long run.
5. Apply for a business license
To establish a legal medical billing business, no matter whether it’s an at-home business or larger company, you will have to apply for a license before accepting new clients. Depending on your business plan (see above), you can choose to form an LLC or a Corporation.
You will also need to register for taxes before accepting new clients. To this you will need to apply for an Employer Identification Number (EIN), which should be simple and straight-forward. However, make sure you don’t overlook this step – it’s very important in order to follow legal guidelines.
6. Choose a medical billing software
There are many different ways to manage your medical billing, including electronic and paper-based. Since technology in the medical billing industry can change so quickly, we recommend using electronic-based billing software.
Since there are many types of medical billing software these days, it can be tricky to choose one. Some things to consider when making your decision are:
- Ease of use
- Compatibility and integrations with back-end tasks
- Built-in, unified communication system
- Device compatibility and mobile options
- And more
We recommend taking these factors into consideration, and coming up with your top priorities as a team. Then, do some research about different medical billing software and how each can help you meet your needs.
7. Partner with a clearinghouse
Even once you’ve purchased and become comfortable using your billing software, you will still need to work with a clearinghouse to complete your billing work. A clearinghouse is a third-party company that acts as the “middle man” between the medical biller and insurance company. In order for a clearinghouse to suit your medical billing service, you will have to consider the following:
- Does the clearinghouse work with organizations nationwide? Do they service your area?
- Do you work with the same insurance companies?
- How do they keep you up-to-date on the progress of insurance claims?
- If a claim is rejected, will they show you why?
- Is there a good customer support system?
- What are their contract options?
- Will you be able to switch to a different clearinghouse if they end up not being the right fit?
- What is their fee structure?
As you can see, there are many questions involved with this process! Make sure to do thorough research and interview a handful of companies before choosing.
8. Develop Marketing and Sales Strategies
Once you have laid all the groundwork to start a medical billing company, the next step is developing a marketing and sales strategy to win new business.
There are tons of ways you can market your company to your prospects. For starters:
- Take a look at these 7 ways to get more billing clients .
- Come up with a customer acquisition marketing strategy.
- Nurture all prospects that have expressed any interest in your service.
- Stay determined to reach unresponsive prospects.
- Try a non-branded approach in your digital marketing efforts.
And don’t forget about sales! Even once you’ve generated interest in your medical billing services through your marketing efforts, you have to use superior sales strategies to grow your business:
- Build a stellar sales team.
- Always monitor your sales funnel.
- Follow-up with every prospect using winning sales email templates .
- Make sure your marketing and sales teams are on the same page .
9. Build a Professional Network
Lastly, once you’ve got your foot in the door of the medical billing industry, you need to grow your network! There are many different ways you can do this.
- Join LinkedIn groups to network with other professional medical billers.
- Become a member of professional organizations, such as the American Medical Billing Association (AMBA) , American Health Information Management Association (AHIMA) , and the Healthcare Financial Management Association (HFMA)
We’re here to help as well! To discuss how we help medical billing companies like yours, set up a time with us to talk ! Our Revenue Growth Program helps medical billing companies across the country find new, true-intent prospects and grow revenue.
Keeping current with insurance specifications and regulations, so that claims were paid on a timely basis, · Concentrating on collecting receivables and co-
Executive Summary · Give a brief overview of the medical billing industry. · Discuss the type of medical billing business you are operating. · Detail your direct
Before starting a medical billing company you will have to devise ways by which you want to reach out to your target customers. In this medical
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Core elements of a successful business plan. A strong medical billing business plan is crucial for starting your billing and coding business...
free business plan · The Medical Billing Company will have an annual revenue growth rate of 16% per year. · The Owner will acquire $100,000 of debt funds to
1. Understand the market · 2. Learn about start-up costs · 3. Acquire medical billing credentials · 4. Map out your business plan · 5. Apply for a business license.