How to Determine the Best Markets to Target for Your Medical Claims Billing Service
Entrepreneur's New Year’s Guide
Every business needs consumers for its products or services to, as the Vulcans so eloquently put it, live long and prosper. So you need to diagnose, or target, your market to determine who your potential clients will be, what geographic area you’ll draw from and what specific services you’ll offer to lure them in.
This is an important phase in startup process. The proper market research can help boost your billing service into a true profit center, and the more research you do, the better prepared you’ll be before you officially open your doors, and the less floundering you’re likely to do.
Your target market -- the clients you’re aiming for -- can be as wide as the field of modern medicine. Any health-care provider is fair game. You can go after family practitioners, providers of every specialty from geriatrics to pediatrics, chiropractors and osteopaths, obstetricians and oncologists, proctologists and podiatrists. You can target mental health professionals, psychiatrists and psychologists. And don’t forget the groups of providers not normally associated with doctoring, such as dentists, social workers, nursing homes, ambulance services, pharmacists, home health practitioners, providers of durable medical equipment and providers of bionic body parts. The only essential requirement is that they bill or receive reimbursement from insurance carriers or patients.
This doesn’t mean, however, that your best technique is to stand at the hospital doors, tripping doctors as they walk by. Targeting by definition means honing in on a particular group.
If you’ve had previous experience working in a particular medical specialty, for example, you might want to target that market first. You’ll feel comfortable with the jargon and procedures so your sales pitch -- and your initial billings -- will go smoother and easier. As an added bonus, you may already have contacts in the field who can either become your first clients or steer you on to colleagues in the field.
If you’re a newbie in the world of medicine, you might want to start off targeting doctors in a single specialty, such as psychiatrists, chiropractors, cardiologists or dentists. These providers’ practices involve a narrower range of diagnoses and procedures than a family practitioner, general surgeon or internist, so you’ll have fewer new codes tossed in your lap at the get-go.
This is a good, starting-from-scratch strategy, but don’t let it dictate or limit your contacts. Most medical insurance billers (MIBs) find that the first client they land, through whatever means, is the specialty they end up going with. That’s because doctors talk. So when one likes what you’re doing, they’ll tell another and they’ll tell another and so on. Next thing you know, you’ll be knee-deep in doctors in the same area of specialty.
Keep in mind that not all referrals need to come from doctors. In an interesting twist, one MIB we know connected with a medical attorney who refers her services to doctors he works with.
The size of the practice
OK, you’ve decided -- or you’re thinking about planning on deciding -- which areas to specialize in. Good! But you’re far from laying your decision-making skills to rest. Next, you have to think about what size practices you’ll want to focus on. Any size is fine, of course, but you might consider starting off with small to midsize practices. This way, you won’t be overwhelmed by your workload while you’re on the upside of your learning curve.
You should also consider the size to which you want your practice to ultimately grow. “If you don’t want to be big, you don’t want to grow a whole lot,” MIB Mary V. counsels. “[Then] you want three or four doctors. That’s going to give you a very good income, depending on the type of doctor you have.”
“We love our chiropractor,” Mary adds as an example, “but I will never take on another one.”
Why? “Sheer volume,” Mary says. “A chiropractor can see a hundred patients a day in one fell swoop, and you’ve got all this paper here, whereas a neurologist sees 20 to 26 [patients per day].”
Even though both doctors bring in the same amount of money for a day’s work, Mary explains, the chiropractor, billing at $45 per visit, must generate far more claims -- and more work for the MIB -- than the neurologist, who’s billing $100 and up per visit.
What’s my niche?
A New Jersey-based MIB started her business by closing down other people’s businesses. A family friend, who also happened to be a pediatrician, asked her to take over his billing temporarily until he could find a replacement for his office manager who’d just quit. She took on the task in addition to her full-time job with the health insurance carrier.
“And then he informed me that he was going to retire in a year and he really didn’t want to go through the hassle of hiring and training somebody,” she says. “He asked, ‘Would I like to finish up before he retired?’ I said, ‘Oh, what the heck.’ Extra money, you know. Next thing I know, a few months later he says, ‘I have this friend who lives in my development; he’s a chiropractor and he really could use somebody.’ ”
It turned out that the chiropractor was getting ready for retirement, too, so the MIB took on his billing and got him cleaned up to retire. “And I said, ‘What the heck, this would be a good business to start on my own.’ ”
The niche she started from is an excellent example of finding a unique angle. You might want to concentrate on “cleaning up” retiring providers or on gearing up brand-new doctors who can’t yet afford an in-house staff.
You might also consider specializing in far-flung providers, those who live and work in remote, rural areas where there are no billing services. Or how about making personal service your niche? You can offer to handle your clients’ uninsured patient billing as well so that you cover the full spectrum of charges and payments.
“Use your background,” Mary V. suggests. “What did you do? What can you offer the office? That’s really what got us thinking [about] what else we could offer.”