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Are you paying more for your chiropractic billing than it’s worth?

 In chiropractic billing, chiropractic software

Your chiropractic billing software or billing company may cost you more than it is worth if your collections are consistently low and many of your accounts receivable (AR) are more than 120 days past due. Since your clinic’s profitability greatly depends on speedy and proficient billing performance, the billing fees are actually not as significant as the total amount of collections received in one month when determining the true value/ROI of your billing service/software.

Granted, the salary of an in-house billing staff member may cost you less than the fee collected by a chiropractic billing company. But chances are, the billing company can achieve a higher amount in collections each month due to better tools such as sophisticated billing software and a network of employees with more combined professional experience. In other words, you will get what you pay for, but in the end the potential for building your dream practice with greater profits increases when choosing a billing company in spite of higher fees.

If you think buying chiropractic billing software to be used by your in-house employee will save you money on billing fees, think again. Ultimately, you will still lack the manpower to fight the payers, just as you will lack the resources to stay on top of technological advancements. Software upgrades don’t come cheap and the insurance companies are notorious for changing codes frequently to throw a wrench in your billing game.

Last but certainly not least, the risk of never ever getting the money you are owed for chiropractic claims increases significantly once the AR hit the 120-day mark. You can basically consider these claims to be “dead” charges and start looking for a way to speed up your billing process to prevent this from happening again.

Here is how you can compute the true cost of your chiropractic billing fees:

[box type=”note_box” style=””]Profit = Collections – Billing Performance Loss – Billing Fees[/box]


    • Collections: total amount of money received from insurance companies
    • Billing Performance Loss: all claims submitted (AR) that are 120 days past-due
    • Billings fees: money charged for the service


    • Your current fees are 5%.
    • Your current collections are $100,000
    • Your current AR beyond 120 days is 20 %
    • Potential fees are 8%
    • potential AR beyond 120 days is 10 %

–> What is the new performance? How much more money will you have?

A) What is the improved collection?
Calculate improvement in performance by subtracting new AR percentage past 120 days (10%) from old AR (past 120 days) of 20%:

20%-10%=10% improved collections percentage

B) What is the potential collection?
Calculate dollar value of potential improved collections by adding 10% (improved collections) to current total of $100,000:

$100,000 + $10,000=$110,000 potential collections

C) What is the potential profit?

    1. Calculate the current profit by subtracting $5,000 for service fees from $100,000 in collections, resulting in $95,000 in current profits:

$100,000-$5,000=$95,000 current profit (assume 5% fees)

    1. Determine $ amount of new fees by multiplying improved collections of $110,000 by 8-percent fee resulting in the amount of $8,000 for new fees:

$110,000 x 0.08 = $8,000 new fee

    1. Calculate improved profit by subtracting billing fees in the amount of $8,000 from the improved collections of $110,000, resulting in improved profit of $102,000:

$110,000-$8,000=$102,000 improved profit

D) How much will the profit increase?
Overall bottom line improvement of $102,000 – $95,000 = $7,000 more in spite of the higher fee!

Ultimately, the best solution would be to use a chiropractic billing service network that can leverage the network effect of accumulated knowledge and man-power against the payers and get you paid faster.

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Dr. Tabor Smith DCNot this kind of SOAP notes!