What to pay for management services

January 4, 2008

Our ten-physician multispecialty clinic is negotiating a contract with a new management company to oversee office functions, including billing and collections. Our previous management company charged 10 percent of net collections for such services. What's the going rate?

Our ten-physician multispecialty clinic is negotiating a contract with a new management company to oversee office functions, including billing and collections. Our previous management company charged 10 percent of net collections for such services. What's the going rate?

Management companies typically charge 10 to 20 percent of net collections, depending on the functions they perform. Billing using their system and personnel will cost an additional 7.5 to 9 percent. It may be more cost-effective to hire a good practice administrator and keep these functions in house.

Send your practice management questions to: PMQA Editor, Medical Economics, 123 Tice Blvd., Woodcliff Lake, NJ 07677-7664, or send an e-mail to mepractice@advanstar.com (please include your regular postal address).