Why it pays to invest in start-up practices as a medical billing company
Discover why billing companies are tapping into start-up practices as a growth strategy — and learn how to turn common concerns into revenue opportunities.
At a Glance
- According to Tebra research, while 57% of billing companies avoid start-up practices due to perceived risks, 90% of those who do take them on report significant growth opportunities through credentialing services and process development.
- Common myths about start-up practices — such as delayed profitability, excessive workload, and uncertain success — can be mitigated through strategic pricing, leveraging existing processes, and taking a proactive role in the practice’s development.
- Billing companies can generate immediate revenue from start-up practices through add-on services, higher first-year pricing, and set-up fees, while building long-term value through loyal partnerships that grow over time.
Taking on new practices can feel like a risk. In a recent Tebra survey, 57% of medical billing companies reported that they haven’t taken on a start-up practice in the past 12 months — for fear of low claim volume and added work. Established practices are often perceived to be less risky and, therefore, a more profitable investment. However, this isn’t always the case.
In reality, investing in a start-up practice can provide significant growth and revenue opportunities. According to the same Tebra survey, 90% of billing companies who said they have taken on start-up practices in the last 12 months did so for the opportunity to grow with the practice. The prospect of offering credentialing and contracting services attracted 59% of respondents, and 52% cited the chance to mold new practices with software and processes.
The bottom line? Billing companies can take on start-up practices to grow revenue from day one which pays dividends down the road, while avoiding start-ups can mean leaving revenue on the floor.
Here we break down the top 3 myths associated with taking on start-up practices and provide tips for moving forward.
Myth: You’re not going to make money out of the gate
Concerns about upfront costs, longer onboarding periods, and unpredictable client behavior might make you think it will take time for profits to materialize. However, there are effective strategies you can use that boost revenue streams immediately and help protect your investment.
Tips to reduce risk and enhance cash flow:
- Get revenue in the door right away by offering add-on services, like credentialing
- Account for increased onboarding time by pricing the first year higher
- Charge a new customer set-up fee based on credentialing or training needs
- Safeguard against ghosting with a one-year contract or minimum fee
These strategies offer protection for your business, so you can focus on laying the groundwork for mutual growth and profitability.
Myth: New practices take too much work
If you’re worried that start-up practices will require too much extra work, you might be underestimating the efficiencies already built into your processes or the potential benefits of your experience and expertise.
You don’t need to reinvent the wheel whenever you take on a start-up practice. Instead, lean into your existing infrastructure and specialization.
Recommendations:
- Save time by leveraging processes you have in place for current clients
- Target specialties you already serve and pull from existing sources on enrollments, codes, and fee schedules
- Use fewer resources by starting small — you can hire or allocate more resources as monthly invoices increase
Rather than seeing start-ups as a burden, think of them as an opportunity to hone your efficiency and make processes even more precise.
“Rather than seeing start-ups as a burden, think of them as an opportunity to hone your efficiency and make processes even more precise.”
Myth: There’s no guarantee of long-term success
Medical billers may hesitate to work with start-ups because the future of their business is unpredictable. But billing companies aren’t powerless in this situation — in fact, you have considerable influence over a new practice’s growth and operational health. Being proactive and collaborative can make the odds more favorable for both you and the client.
For greater stability and success:
- Control what you get paid by taking on payer contract negotiations
- Spot any red flags by collaborating on the practice’s business plan
- Influence practice growth by offering marketing consultation as an add-on
- Reduce common practice billing errors by molding them with your software and processes
A hands-on approach not only helps practices succeed but also contributes to a strong partnership that offers mutual benefits.
Unlock more revenue by investing in start-up practices
The truth is you can help any provider, start-up or existing, grow by helping them establish strong processes. When you partner with start-ups, you can access additional revenue streams through add-on services and consulting — and increase clean claim rates by training practice staff to reduce avoidable rejections and denials.
By accepting start-up practices, you will tap into new markets and win new business. You also have a golden opportunity to build loyalty with new clients by taking them on in the early stages, and as they grow, your monthly invoices will climb.
Tebra’s all-in-one solution helps billing companies create precision processes while providing advanced reporting and useful business insights. Schedule a demo to learn more.
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