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Medical Billing Business Plan

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write A Medical Billing Business Plan?

Writing a medical billing business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Medical billing services:.

Highlight the medical billing services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of medical billing company you run and the name of it. You may specialize in one of the following medical billing businesses:

• Third-party medical billing
• Medical coding services
• Medical billing software companies
• Medical billing consulting services
• Specialty-specific medical billing business
• Describe the legal structure of your medical billing company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established medical billing service provider, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your medical billing business plan::

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Mention the medical billing services your business will offer. This list may include services like,

• Claims processing
• Medical coding
• Insurance verification
• Accounts receivable management
• Patient billing & collections
• Practice management software
• Compliance & regulatory assistance
• Consulting & advisory services

Quality measures:

Additional services.

In short, this section of your medical billing plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your medical billing company business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your medical billing business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & software:.

Include the list of equipment and software required for medical billing, such as computers, printers & scanners, telephone systems, medical billing software, practice management system, data security measures, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your medical billing business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your medical billing services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your medical billing service business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample medical billing business plan will provide an idea for writing a successful medical billing plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our medical billing business plan pdf .

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Steps for Preparing Business Plan

Frequently asked questions, why do you need a medical billing business plan.

A business plan is an essential tool for anyone looking to start or run a successful medical billing business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your medical billing company.

How to get funding for your medical billing business?

There are several ways to get funding for your medical billing business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply fora loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your medical billing business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your medical billing business plan and outline your vision as you have in your mind.

What is the easiest way to write your medical billing business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any medical billing business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

How do I write a good market analysis in a medical billing business plan?

Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry. We can categorize the process of writing a good market analysis section into the following steps:

• Stating the objective of your market analysis—e.g., investor funding.
• Industry study—market size, growth potential, market trends, etc.
• Identifying target market—based on user behavior and demographics.
• Analyzing direct and indirect competitors.
• Calculating market share—understanding TAM, SAM, and SOM.
• Knowing regulations and restrictions
• Organizing data and writing the first draft.

Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Medical Billing Business Plan Template

Written by Dave Lavinsky

Medical Billing Business Plan

You’ve come to the right place to create your Medical Billing business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Medical Billing businesses.

Below is a template to help you create each section of your Medical Billing business plan.

Executive Summary

Business overview.

TriMountain Medical Billing is a startup business located in Denver, Colorado. The company is founded by two friends, Nancy Linninger and Lacy Patton, both of whom have over 10 years of experience in the medical billing industry. They were team members in a large medical billing firm that was part of a national chain business and each has garnered a reputation for accuracy, excellent customer service, and offering the extra effort sometimes needed to assist in complex billing circumstances. Both Nancy and Lacy have been award recipients by associations for outstanding service to physician groups and individual physicians within their sphere of service and both partners have been awarded for their consistent care and devotion to “getting the job done correctly.”

With their outstanding reputations to carry their new business forward, the partners are talking with former customers about joining their new business and they are also gathering information to join industry events and citywide associations that will help spread the word of their new business.

Product Offering

The following are the services that TriMountain Medical Billing will provide:

• End-to-end revenue cycle management services
• Patient data entry
• Insurance verification
• Claim submission
• Denial management
• Payment posting
• Day to day client management

Customer Focus

TriMountain Medical Billing will primarily target the offices of physicians and various other healthcare providers. Secondarily, they will target the specialty and often unique billing needs of offices of cardiology, orthopedics, dermatology, and radiology.

Management Team

TriMountain Medical Billing is a startup company formed as a legal partnership. The partners, Nancy Linninger and Lacy Patton, carry an extensive background portfolio of accomplishments and awards within the medical billing industry. They are each known for stellar performance in complex medical billing issues and for their outstanding customer service in each medical billing case received. The partners have over 10 years of billing experience combined and have already determined from former clients that they will move to the new company as soon as it is open for business.

Nancy Linninger holds a bachelor of arts degree in Accounting, which she acquired from the University of Colorado. Her medical billing experience began before she attended the university, having started working at a small medical billing office while she was in high school.

Lacy Patton holds a bachelor of arts degree in Business, which she acquired from the College of the Redwoods. Her medical billing experience consisted of six years at her former employment, where as a Medical Billing Clerk III, she learned all aspects of medical billing, along with customer service and management of the newest software available for use in medical billing.

Success Factors

TriMountain Medical Billing will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of TriMountain Medical Billing.
• Exceptional customer service is the highest priority for the team at TriMountain Medical Billing and the staff will be trained to meet or exceed this service level.
• All billing is open to communication and discussion, with mediation set for any disputes that may arise. The phrase, “The customer is always right,” is one that TriMountain Medical Billing takes seriously.
• Comprehensive menu of services and an accurate and complete record and descriptions for the records that are delivered to the [physician groups every month.
• TriMountain Medical Billing offers the best pricing in the city. Their pricing structure is the most cost-effective when compared to the competition.

Financial Highlights

TriMountain Medical Billing is seeking $200,000 in debt financing to launch its TriMountain Medical Billing offices. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for TriMountain Medical Billing.

Company Overview

Who is trimountain medical billing.

TriMountain Medical Billing is a newly established, full-service medical billing business in Denver, Colorado. TriMountain Medical Billing will be the most reliable, cost-effective, and efficient choice for healthcare providers in Denver and the surrounding communities. TriMountain Medical Billing will provide a comprehensive menu of medical billing services for any physicians group or clinic to utilize. Their full-service approach includes a comprehensive array of services and the latest software to support them.

  TriMountain Medical Billing will be able to manage every client with speed and accuracy. The team of professionals are highly qualified and experienced in medical billing and, more importantly, in customer service that is superior to all others. TriMountain Medical Billing removes all the headaches and issues of medical billing and ensures a reliable, fast and efficient medical billing system will support every client’s customer service needs.

TriMountain Medical Billing History

Since incorporation, TriMountain Medical Billing has achieved the following milestones:

• Registered TriMountain Medical Billing, LLC to transact business in the state of Colorado.
• Has a contract in place for a 10,000 square foot office at one of the midtown buildings
• Reached out to numerous contacts to include TriMountain Medical Billing as new partners in billing.
• Began recruiting a staff of two and three office personnel to work at TriMountain Medical Billing.

TriMountain Medical Billing Services

The following will be the services TriMountain Medical Billing will provide:

Industry Analysis

The medical billing industry is expected to surge in growth over the next five years to over $24 billion. The fast rate of growth will be driven by the increasing demand to outsource billing from healthcare providers to medical billing companies who specialize in services and accuracy. This allows practitioners to focus on patients rather than on billing. Additionally, the growth in the industry will be exponentially fast as a result of governmental programs and policies that are currently in motion to change. More services by medical billing companies, especially with the use of AI, will be required.

Costs will likely be reduced as AI is integrated into medical billing systems and input becomes less timely, which will lower costs. Additionally, costs will be reduced as software and other formats and systems continue to evolve to make time-consuming tasks easier and more efficient for medical billing processes and their requirements.

Customer Analysis

Demographic profile of target market.

TriMountain Medical Billing will target the offices of physicians and various other healthcare providers. Secondarily, they will target the specialty and often unique billing needs of offices of cardiology, orthopedics, dermatology, and radiology.

Customer Segmentation

TriMountain Medical Billing will primarily target the following customer profiles:

• Physician offices
• Medical groups that service physicians
• Specialty medical groups, such as cardiology, orthopedics, dermatology and radiology, each of which has unique medical billing requirements

Competitive Analysis

Direct and indirect competitors.

TriMountain Medical Billing will face competition from other companies with similar business profiles. A description of each competitor company is below.

MedBill of Colorado

MedBill of Colorado is owned by a physician’s group located in Provo, Utah. The focus of the medical billing company is on medical coding and the documentation that must accurately accompany coding. MedBill of Colorado offers physician groups an assurance that medical records are coded accurately and in compliance with coding guidelines, which is crucial for accurate billing and reimbursement.

The physician’s group that owns MedBill of Colorado is currently seeking a sizable loan in order to obtain software and AI-assisted programs that will speed the billing process for certain physician groups and individual clients. The cutting-edge technology, when placed into use, will reduce the time and effort spent in accurately coding.

Colorado Medical Claim Services

The Colorado Medical Claim Services group has a primary focus on claims submission, tracking, and follow-up. They work to speed the processing of claims, which ensure physician groups receive timely payments. They also work to accurately reduce claim denials, which removes the time-consuming tasks from the physician’s group. Colorado Medical Claim Services also works to maximize reimbursements for healthcare providers by cross-checking and verifying expenditures and allowable reimbursements.

Colorado Medical Claim Services was started in 2019 by a physician, Neil Baker, who saw the opportunity to garner profit in a fast-rising area of medical billing. The coding portion of the service is just the beginning for the Colorado Medical Claim Services business.

Denver Doctors Collection Group

Denver Doctors Collection Group has a primary concentration on accurate patient billing and the collection due to doctors as a result of those billings. The six employees within the company handle patient statements, payment plans, and collections to ensure that patients pay their bills promptly. If patients are unable to pay, the Denver Doctors Collection Group sets up efficient and effective repayment programs that ensure doctors are able to maintain a reasonable cash flow even as repayment plans often take a longer period of time to collect. The owner of the company, Dan Dorsee, started the company in 1999 and has maintained the company through sustained growth within this segment of medical billing.

Competitive Advantage

TriMountain Medical Billing will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

TriMountain Medical Billing will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who believe customer service is the highest priority for the team at TriMountain Medical Billing.
• The staff of TriMountain Medical Billing are fully trained to meet and exceed the requirements of each physician group in accuracy and reliability of their work.
• Billing questions are always open to communication and discussion, with mediation set for any disputes that may arise. The phrase, “The customer is always right,” is one that TriMountain Medical Billing takes seriously.
• Compared to other medical billing companies in the area, TriMountain Medical Billing offers comprehensive services at lower rates than other providers.

Promotions Strategy

The promotions strategy for TriMountain Medical Billing is as follows:

Word of Mouth/Referrals

Nancy Linninger and Tracy Patton have built up an extensive list of contacts over the years by providing exceptional service and expertise to former medical billing clients. The contacts and clients will follow them to their new company and help spread the word of TriMountain Medical Billing.

Professional Associations and Networking

National trade shows and regional networking events will be attended and the new company will be offered in sales and business development efforts. Physician conferences and medical coding conferences will be attended, as well, with similar goals.

Print Advertising

Printed brochures will be offered to all physician groups and clinics within the Denver region. Discounted pricing for one-year contracts will be offered during the first month of business. From time to time, additional messaging will be sent to physician groups to consider the services of TriMountain Medical Billing.

Website/SEO Marketing

TriMountain Medical Billing will fully utilize their website. The website will be well organized, informative, and list all the services that TriMountain Medical Billing provides. The website will also list their contact information. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “medical billing company” or “medical billing near me,” TriMountain Medical Billing will be listed at the top of the search results.

The pricing of TriMountain Medical Billing will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for TriMountain Medical Billing. Operation Functions:

• Nancy Linninger will be the owner and president of the company. She will oversee all business development and manage the accounting needs of the company.
• Nancy Linninger will seek investor funding to fully develop two additional locations of the company within outlying regions of Denver in areas of fastest population growth.
• Tracy Patton will direct programs and oversee client relations with resolution or conflict negotiation needs. She will also manage non-payment issues and repayment plans.
• Tracy Patton will be the owner and vice president of the company. She will assume the role of administrative director, overseeing all staff and operations within the company. She will also direct the software programs and other innovations within the company.
• Daniel Peterson will be the senior manager of billing processes. He will work directly with staff to train, conduct checks, supervise accuracy and oversee client relations.

Milestones:

TriMountain Medical Billing will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the TriMountain Medical Billing
• 6/1/202X – Finalize contracts for TriMountain Medical Billing clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into the TriMountain Medical Billing office
• 7/1/202X – TriMountain Medical Billing opens its doors for business

Daniel Peterson has been recruited as the senior manager of billing processes. He will work directly with staff to train, conduct checks, supervise accuracy and oversee client relations.

Financial Plan

Key revenue & costs.

The revenue drivers for TriMountain Medical Billing are the fees they will charge to physicians and specialty medical groups for their services. .

The cost drivers will be the overhead costs required in order to staff at TriMountain Medical Billing. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of clients per Month: 100
• Average revenue per Month: $150,500
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, medical billing business plan faqs, what is a medical billing business plan.

A medical billing business plan is a plan to start and/or grow your medical billing business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Medical Billing business plan using our Medical Billing Business Plan Template here .

What are the Main Types of Medical Billing Businesses? 

There are a number of different kinds of medical billing businesses , some examples include: Light, Full Service, and Boutique.

How Do You Get Funding for Your Medical Billing Business Plan?

Medical Billing businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Medical Billing Business?

Starting a medical billing business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

• Develop A Medical Billing Business Plan - The first step in starting a business is to create a detailed medical billing business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  
• Choose Your Legal Structure - It's important to select an appropriate legal entity for your medical billing business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your medical billing business is in compliance with local laws.
• Register Your Medical Billing Business - Once you have chosen a legal structure, the next step is to register your medical billing business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 
• Identify Financing Options - It’s likely that you’ll need some capital to start your medical billing business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 
• Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 
• Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 
• Acquire Necessary Medical Billing Equipment & Supplies - In order to start your medical billing business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 
• Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your medical billing business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful medical billing business:

• How to Start a Medical Billing Company

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Medical Billing Business Plan Template

JUN.16, 2022

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.

Executive Summary

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:

Company Summary

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.

Step5: Market

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.

5.2.2 Surgeons

This segment will include the medics who perform minor or major surgeries.

5.2.3 Dentists

Dentists who provide teeth cleaning, healing, and maintenance services will also be our customers.

5.2.4 Others

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

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How to start a medical billing company [2024 guide]

Want to start a home-based medical billing business but not sure of the process?

Don’t worry, we’ve got you covered.

There are numerous benefits to running your own home-based business. Working in comfort, building your schedule, being your boss, ditching the daily commute; the list goes on.

However, before investing money, effort, and time into establishing a medical billing business, you should determine if coding and billing is a good fit for you. It takes a lot to get up and running, including a rigorous certification course.

Rest assured, however, the returns of a well-run medical billing business are fantastic. With independence and a steady income, you’ll have a healthier work-life balance and the ability to decide how large you want your company to grow.

Here’s what we will cover in this article

Click on the links below to jump to a particular section.

• What is a Medical Billing Business?
• Is a Home-Run Medical Billing Business Right For You?
• Is There a Need For Your Service?
• What Are the Startup Costs Involved?
• Get Hands-On Experience in a Medical Role
• Apply For Medical Billing Training
• Watch Out For Scams
• Create a Business Plan
• Other Necessities
• A Clearinghouse
• A Medical Billing Software
• Other Equipment & Forms
• Choosing a Billing Software
• How to Charge Clients
• Income Potential
• Specialize Yourself
• Construct a Strong Marketing Plan
• Network & Grow
• Bonus: An Alternative Business Opportunity

Ready to get started? Let’s go!

What is a medical billing business?

Medical centers, hospitals, and private care professionals bill patients for appointments and services. These services can include check-ups, procedures, testing, treatments, and so on.

Medical coding and billing businesses translate these patient services into a bill, and then send and follow up on such medical claims with insurance companies.

Why do doctors and healthcare providers use outsourced billing methods in their revenue cycle management procedures?

Health insurance companies, Medicare, and Medicaid require billing departments to process medical bills through extensive software under strict rules and provisions.

These rules state that billers and coders submit claims with a series of particular codes specific to the medical procedure performed by the health provider. This makes the medical claims billing process far more streamlined and organized.

However, that isn’t all.

Revenue Cycle Management is the administration of medical financial transactions resulting from patient-provider encounters. These transactions include:

• Collections
• Payer contracting
• Provider enrollment
• Data analytics

Medical billers and coders play a significant role in carrying out these revenue cycle procedures. They follow the patient’s payment actions from the initial appointment or interaction with a medical provider to the final payment of the bill.

Billers and coding specialists help doctors earn revenue promptly through their coding and billing abilities and extensive knowledge of the requirements of insurance companies.

Through patient medical records and medical reports, billers and coding specialists can create and process accurate bills far quicker than health professionals.

Faster processing means more cash flow and decreased accounts receivables for care providers.

Is a home-run medical billing business right for you?

Running any business requires:

• Organization
• Data entry skills
• Management skills

If you want to run a successful medical billing service from home, nurture these qualities and skills within yourself.

If this is the first time you are starting a new business, check out our 10 entrepreneurial skills you need .

Next, determine if the healthcare industry interests you.

• Would you enjoy going through medical records and generating claims codes?
• Would you like working with both care providers and insurance companies to receive payment for services rendered?
• Would rejected claims and complications frustrate you? What about uncollectibles?
• Do you have an interest in learning more about medical procedures?
• Did you enjoy working in the medical field in the past?

The medical billing process in the United States can be very complicated. Be sure that you have a passion for the work.

Is there a need for your service?

Before putting time and money in your home business, first research if there is a need for third-party billing in your area.

Contact doctors and healthcare providers and ask them these questions:

• Does an outside company handle your billing or do you do it yourself?
• What software programs do you use/recommend?
• If you use an outside provider, what processes do you outsource?
• How many patients do you see and bill daily?

Tip – Nursing homes and hospitals also use medical billing services and can be a lucrative area of specialization.

The questions listed above will:

• Provide a clear idea of the need for your services in the area
• Give you tips on which software is the best
• Indicate what volume of claims you can expect from your prospective clients.

What are the startup costs involved?

Fortunately, a solo-run medical billing business is easy to start and requires a minimal investment of money. Startup costs typically range between $2,000-$10,000 .

Running a home-based small business lets you avoid overheads like renting out an office space and hiring and training employees.

The most expensive cost in starting your billing service is billing software . Prices can range from $100 to $10,000 based on the size of the company, the number of employees, the number of providers, and software features.

You will also need office supplies, including:

• A reliable computer ($500 – $3000)
• A printer and fax machine ($150+)
• Software licensing ($1500-$3500 per user)

Other costs you may need to consider are:

• Software upgrades ($500-$3500 per year)
• Backup hard drives ($50-$150 per drive)
• Ethernet switches and wires ($50-$100 per wire)
• IT support ($100+ per hour)

If you grow your business into a medium/large company, professional, in-house systems are required and can cost up to $50,000 to purchase and install. Servers will further cost another $3,000-$5,000, and training can cost $3,000+.

A. First steps to starting your own medical billing business

The multi-step process of starting your own medical billing home business can be extensive. We advise that you follow each step thoroughly and obtain every license and certificate required to be in legal standing and risk no chance of being shut down.

Here’s how to start.

1. Get hands-on experience in a medical role

If you are new to the medical industry, it is highly beneficial to work in the medical field for at least a few months before starting your business.

A great way to do this is by working in the billing department of a medical office or a hospital. You will experience the medical industry and billing process first hand, and will also gain an improved understanding of the average volume of patients that visit doctors daily.

Working in a doctor’s office will help you network and source potential clients for your business. You will handle a variety of medical records and insurance claims, and may even get to learn the electronic billing process if the practice supports it.

2. Apply for medical billing training

Why do you need medical billing training?

Medical billing differs from other types of invoices for two reasons:

• Medical bills go through an insurer before being sent to a patient.
• Medical bills require highly specialized codes and descriptions when sent to insurers.

Also, many medical procedures have similar names; therefore, billing specialists must have in-depth knowledge about anatomy, physiology, pharmacology, and health insurance terms.

A variety of colleges offer billing certification courses, both online and in-person. The completion of most billing certifications takes 9 to 18 months and requires 18 credits.

The Primary Coding Manuals & Certification Exams

When choosing a certification program, pick a course that includes all necessary code manuals and exam preparations.

Medical billing certificate programs should cover three primary code manuals:

• CPT: Current Procedural Terminology (set by the American Medical Association)
• ICD-10-CM: International Statistical Classification of Diseases and Related Health Problems (Maintained by the World Health Organization)
• HCPCS: Healthcare Common Procedure Coding System

Following the course, you should be prepared to take exams offered by the three medical billing and coding businesses listed below:

• Certified Medical Reimbursement Specialist exam – American Medical Billing Association (AMBA)
• Certified Coding Associate – American Health Information Management Association (AHIMA)
• Certified Professional Coder’s board exam – American Academy of Professional Coder’s (AAPC)

3. Watch out for scams

There are a plethora of medical billing opportunities that aid entrepreneurs in starting their own third-party billing business.

For example, a company may offer to set the entrepreneur up with training, the perfect electronic billing tools, and a list of potential clients that need outsourced billing services.

Sounds too good to be true, right?

Reliable services like this surely exist, however many of them are scams. The Federal Trade Commission has created a guide for how to detect and avoid scams.

It is crucial that you do thorough research on service providers if you choose to take this route.

The FTC suggests that you, “check with the state Attorney General’s office , consumer protection agency and the Better Business Bureau in your area and the area where the promoter is based to learn whether there are any unresolved complaints about the business opportunity or the promoter.”

4. Create a business plan

Determining what kind of business you want to run is the first step in creating an airtight business plan.

Do you want to run a sole proprietorship or a partnership with another person? Will your business be an LLC ? Will it be a large corporation?

Meet with a certified public accountant to understand which option suits your personal and tax needs.

Next, ask yourself a few questions:

• Who is your target audience?
• What are the initial costs?
• What kind of income can you expect?
• What is the name of the business?
• What do you need to get started?

5. Other necessities

Here are a few more things you will need to accomplish before starting your medical billing company:

• Apply for a business license
• Register for taxes
• Set up a business bank account
• Set up accounting
• Obtain necessary permits and licenses
• Get business insurance
• Start an LLC. Here are some free guides .

B. What you need to get up and running

Here are the essential items you will need to run a medical billing business smoothly:

1. A clearinghouse

A clearinghouse is a financial institution that processes and facilitates the exchange of payments, securities, or derivatives transactions. In your case, it is a company that electronically receives and transmits medical claims billing.

How much does this service cost?

The cost of a clearinghouse can range from below $100 to several hundred dollars depending on the bells and whistles. Some clearinghouses also demand additional fees for each new medical care provider or account you add.

2. A medical billing software

As mentioned earlier, the most expensive part of setting up your in-house company is medical billing software.

If you want some specific features of your choice and a billing software specifically made for your business, you can get a bespoke medical billing software developed for you.

Otherwise, billing software can range anywhere from a couple of hundred dollars to $10,000. While some are basic, others include features like marketing plans and lead generation.

Fortunately, many software companies provide free trials. Give your top choices a try before investing heavily in the most critical part of your business.

3. Other equipment & forms

There are a few other necessities you will need to have:

• A reliable computer with an internet connection
• A phone, printer, and fax machine
• Medical insurance forms
• Reference books (ICD-10, CPT, and HCPCS Expert 2000 coding books)
• A productive work environment

If you gain a plethora of clients, you can also use invoicing software to remain organized. If you run a high-volume business, electronic billing may be of use to you.

C. Choosing a billing software

As mentioned earlier, medical billing software pricing can vary widely based on software features and the size of your business.

Here are some of the most popular billing software of 2021:

A cloud-based medical practice management system that includes billing features like medical claims processing, claims scrubbing, code & charge entry, health insurance verification, and more.

• Solo Practice: $499 per month
• Mid-Sized: $4,990 per month
• Large Practice: $12,425 per month

Capterra rating: 4/5

A cloud-based medical practice management software with built-in billing and EHR capabilities. The billing feature is integrated with Xero accounting software and includes payment processing, invoice generation, claims management, and financial reporting tools. 

• Solo Practice: $23 – $93 per month
• Mid-Sized: $102 – $139 per month
• Large Practice: $150 – $270 per month

Capterra rating : 5/5

CareCloud EHR

A cloud-based medical practice management system with an integrated billing app that features claims processing, claims scrubbing, code & charge entry, health insurance verification, invoice history, and more.

• Solo Practice: $349 – $649 per month
• Mid-Sized: $3,490 – $6,290 per month
• Large Practice: $8,725 – $15,725

A web and mobile-available software that manages patient billing through cloud technology. Billing features include claims processing & scrubbing, health insurance verification, dunning management, and more.

• Solo Practice: $300 per month
• Mid-Sized: $3,000 per month
• Large Practice: $7,500 per month

CollaborateMD

A simple, efficient, and affordable cloud-based medical practice management and medical billing solution for your third-party billing needs. Billing features include claims processing, claims scrubbing, health insurance verification, remittance advice, and more.

• Solo Practice: $165 – $345 per month
• Mid-Sized: $1,650 – $3,450
• Large Practice: $4,125 – $8,625

Note – Pricing for billers and coders may vary based on the number of users, features, and number of clients.

For more options, check out Capterra’s list of the best medical billing software .

D. How to charge clients

There are a few ways to charge your clients in the medical billing process:

A percentage of collections –   The most popular method, as it often lends the highest return and revenue.

A per-claim fee –   This method includes charging a set fee for each claim that is submitted, whether paid or unpaid.

An hourly fee – Hourly fees are useful for medical billing businesses that provide complementary services. The current average hourly rate of a medical billing clerk employee in the U.S. is $18/hour . As an independent contractor, you will likely earn more.

The option you choose depends on the healthcare providers you partner with, as well as the billing and medical coding you perform.

Tracking billing hours

If you opt for charging hourly fees, try using Time Doctor to track your working hours.

If you have a team, Time Doctor follows the websites that they visit while clocked-in and will send reminders when it thinks they are visiting a site that is unrelated to work.

E. Income potential

As with all businesses, the income you earn largely depends on the success and size of the company. Whether you earn $20k or $100k per year will depend on the care providers you partner up with, as well as if you specialize yourself and run an efficient business.

F. Specialize yourself

Specializing yourself in one or two fields of healthcare can significantly benefit your knowledge and income in this business.

For one, you will eliminate the number of billing codes you need to use regularly. More importantly, much of your credibility as a medical billing clerk will depend on your knowledge of the industry and medical services at hand.

The more you speak their language, the more care providers will hire you for outsourced billing. Here are a few areas of specialty to consider:

• Cardiologists
• Veterinarians
• Chiropractors
• Family practitioners
• Psychiatrists

Note – A healthcare provider that charges a high copay doesn’t necessarily mean more income for you. Doctors with a low copay often require a higher patient billing volume to succeed, sending more insurance claims your way.

G. Construct a strong marketing plan

Your business, like all businesses, won’t grow itself.

Medical billing is a heavily saturated industry. You must create a rigorous marketing plan if you want to hit the ground running.

Getting your first client can be the biggest challenge. You have a head start if you have experience in the medical care industry and have maintained positive relations with healthcare providers in the past.

One of the best ways to market yourself in the medical billing industry is through in-person visits where you drop off marketing material and create relationships with providers.

Moreover, creating a website and business cards or vCards for your service, as well as offering incentives will stimulate growth and lead opportunities.

While generating leads, consider providing these free incentives to lure in prospects:

• An analysis of the benefits of outsourcing billing services for their specific medical practice.
• A code review. Analyze which codes are out-of-date or incorrect, and estimate the amount of lost revenue that has resulted from these codes.
• A free claim process and an estimate of the time your services saved them.
• An analysis of their Superbill and accounts receivable, and an estimate of why some of their medical claims are rejected.
• A consultation to evaluate if they comply with HIPAA and OIG.

If you struggle to bag your first client, you can also offer discounts and other incentives for some time. For instance, you could offer twenty percent off for the first month of your services.

Whatever route of marketing you choose to pursue, create a strategic plan ahead of time so that you are ready to go when it’s time to grow your business.

H. Network & grow

Knowing the right people can always help achieve your goals.

What’s more?

Word of mouth referrals and positive personal testimonies are fantastic for your business.

Embed yourself in the network of medical professionals and make a name for your business. Involving yourself can be done through joining professional organizations, getting in touch with your own family’s medical providers, and working in a medical office that allows you to come in contact with a variety of providers.

Expanding your network will increase your chances of obtaining new clients and growing your business.

I. Bonus: An alternative business opportunity

There is an alternative option for starting your own third-party billing business that can be fruitful if done well.

What is it?

Buying an already existing medical business.

Purchasing an already existing billing company can be done privately or through a broker and can help you avoid a few startup fees and client roundups.

Acquiring a successful business can also lead to high returns with less initial work.

However, before acquiring an already-existing business, ask a few critical questions:

• How many clients does the company have?
• How long have they been customers?
• Are they under contract?
• What method of payment do they use?
• What prices do they pay?

Establishing your own billing business can be both lucrative and enjoyable.

Keep in mind that a work-at-home business requires commitment, dedication, and organization. We at Time Doctor would know. Our team is made up of 80+ remote workers!

For tips on how to be more productive in your remote work, check out the Top 10 secrets to maximize remote work productivity .

With that said, there are numerous benefits to being your boss, including a flexible schedule and the freedom to make your own business decisions.

Furthermore, running a medical billing service out of your home avoids overhead costs and requires little capital to establish.

When done well, a medical billing business can give you the steady income and flexible schedule you have been desperately seeking!

Book a free demo of Time Doctor

Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.

Is medical billing outsourcing the best option for my medical practice?

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A Guide To Starting A Medical Coding and Billing Business From Home

Starting a medical coding and billing business from home can be rewarding. It offers flexibility, growth potential, and the ability to contribute to the healthcare industry from the comfort of your own home. 

Today, we’ll provide step-by-step instructions on how to set up your home-based business, from understanding the basics of medical coding and billing to setting up a home office and marketing your new company. 

Whether you're a certified professional looking to branch out on your own or a newcomer seeking a career transition, this guide will equip you with the knowledge and tools you need to establish a successful home-based medical coding and billing business.

Understanding Medical Coding and Billing

Anyone who Google’s “best home-based businesses” will likely find medical coding and billing on any list on the first page of the search results.

But before diving into the process of starting a business, it's important to have a clear understanding of what medical coding and billing entails. 

Medical coding professionals assign codes to healthcare procedures and diagnoses for insurance reimbursement purposes. These codes are used to accurately document medical records and ensure that healthcare providers receive proper payment for their services.

On the billing side, you'll be submitting claims to insurance companies and processing payments for services rendered. 

Medical coding and billing require high accuracy, acute attention to detail, and knowledge of industry terminology and coding systems. Because of this, they have specialized codes and medical billing software for billing companies that everyone in the industry needs to know.

Obtaining the Necessary Certifications

In order to start a successful medical coding and billing business from home, you will need to obtain the necessary certifications. 

This typically includes becoming a certified professional coder (CPC) through the American Academy of Professional Coders (AAPC) or a certified coding specialist (CCS) through the American Health Information Management Association (AHIMA) . 

These certifications require passing an exam and may also have additional requirements, such as a certain number of years of experience in the field.

Additionally, it's important to stay up-to-date on current coding and billing guidelines, as they often change. This can be done through continuing education courses or by attending workshops and conferences.

Developing a Business Plan

Like any other business, a home-based medical coding and billing business requires a well-structured plan to succeed. This should include the services you’ll offer, your target market, pricing strategy, marketing plan, and financial projections.

Think about the equipment or software that will be necessary for your business. You’ll want a computer, top-notch software, a printer, and office supplies. It's recommended to budget for these expenses in your business plan.

Marketing Your Business

Marketing is how companies promote their products and services to prospective clients. You want to cast a broad net here. Use various channels. 

Create a professional website, network with healthcare providers and other professionals in the industry, and utilize social media platforms .

Establish a strong online presence and work on brand-building to get your new company off the ground. The competition is stiff in this industry. Figure out your unique selling proposition and use it to prove you’re the best service around.

Setting Up Your Home Office

Have a designated workspace to keep you organized and focused. It’ll be easier to stay on track and achieve your business goals. 

Your office should be comfortable and functional, with essential equipment like a reliable computer, printer, and phone. 

Consider investing in ergonomic chairs and desks to stay comfortable while working for extended periods. Find a space with adequate lighting and minimal distractions to maximize your productivity. 

You’ll also want to protect what you have. So put the right security measures in place to protect your office, computer, and any software you use.

Continuing Education and Staying Updated

Starting a medical coding and billing business from home is a journey that requires a blend of medical knowledge, business acumen, and a dedication to continuous learning. 

As you navigate through the stages of business development, remember that the healthcare industry is dynamic. Coding and billing guidelines are subject to change at any time. Stay updated and invest in ongoing education.

Check Out These Related Posts:

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How to Start a Profitable Medical Billing Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a medical billing business plan., 3. develop a medical billing brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for medical billing., 6. open a business bank account and secure funding as needed., 7. set pricing for medical billing services., 8. acquire medical billing equipment and supplies., 9. obtain business insurance for medical billing, if required., 10. begin marketing your medical billing services., 11. expand your medical billing business..

To start a medical billing business, it is crucial to perform a comprehensive market analysis. This step will help you understand the demand for medical billing services, identify your potential competitors, and tailor your services to meet the needs of your target market. Here are some key points to consider:

• Research the healthcare industry in your region to gauge the volume of medical practices and their current billing procedures.
• Analyze the competition by identifying existing medical billing companies, their service offerings, pricing structures, and market share.
• Identify your target market by considering the size of the medical practices, their specialties, and their typical patient volume.
• Examine the regulatory environment to understand the compliance requirements for medical billing in your area.
• Assess the adoption of electronic health records (EHR) and medical billing software among healthcare providers to determine technological needs.
• Explore opportunities for differentiation, such as specializing in certain medical fields or offering value-added services like coding audits or revenue cycle management.
• Conduct surveys or interviews with healthcare providers to learn about their satisfaction with current billing services and potential areas for improvement.

Are medical billing businesses profitable?

Yes, medical billing businesses can be profitable depending on a number of factors, such as the amount of competition in the marketplace, how much experience and expertise the business owner has in the industry, and how much demand there is for the services provided.

Starting a medical billing business requires a clear and detailed plan to navigate the complexities of healthcare regulations and client needs. A comprehensive business plan will serve as a roadmap to success, outlining the steps you need to take to establish a profitable and efficient operation. Consider the following key components when drafting your medical billing business plan:

• **Executive Summary**: Summarize your business goals, target market, and competitive advantages.
• **Business Description**: Define your services, the problems you solve, and why your business is needed.
• **Market Analysis**: Research the demand for medical billing services, identify your target audience, and analyze competitors.
• **Organization and Management**: Outline your business structure, management team, and staffing requirements.
• **Services Offered**: Detail the medical billing services you will provide and any additional offerings.
• **Marketing and Sales Strategy**: Explain how you will attract and retain clients, including pricing, sales tactics, and advertising.
• **Funding Request**: If seeking financing, specify the amount needed and how it will be used.
• **Financial Projections**: Provide projected income statements, cash flow statements, and balance sheets for the next three to five years.
• **Appendix**: Include any additional information, such as resumes, legal documents, or references.

How does a medical billing business make money?

Medical billing businesses make money by providing accurate and timely billing services to doctors, hospitals, nursing homes, and other healthcare businesses. These businesses often target large healthcare systems and medical practices as their clients since these entities require efficient medical billing systems. For example, a medical billing business could target a local hospital as its first client and provide the hospital with an organized system for tracking patient bills and payments. Additionally, the business could also expand their services to include data entry services to ensure that all records are updated efficiently.

Developing a strong brand is critical for the success of your medical billing business, as it sets you apart from competitors and establishes trust with potential clients. A brand is more than just a logo or color scheme; it's the entire experience your clients have with your company. Here are some key steps to help you craft a compelling medical billing brand:

• Define your unique value proposition: Clearly articulate what makes your services unique and why clients should choose you over others.
• Choose an appropriate name: Select a business name that is professional, memorable, and reflects your services and expertise in the medical billing field.
• Create a professional logo: Design a logo that is simple, recognizable, and visually conveys your business's focus on medical billing and healthcare.
• Establish a color palette and typography: Pick colors and fonts that resonate with the healthcare industry and ensure consistency across all marketing materials and communications.
• Build a consistent online presence: Develop a professional website and maintain active social media profiles to engage with your audience and provide valuable content related to medical billing.
• Develop marketing materials: Create brochures, business cards, and sales presentations that consistently use your branding elements to enhance recognition and credibility.
• Communicate your brand story: Share the story behind your brand, including your mission, vision, and the values that drive your business, to create an emotional connection with your audience.

How to come up with a name for your medical billing business?

When coming up with a name for a medical billing business, it is important to pick something that resonates with potential customers and invokes a sense of professionalism. Begin by taking the time to brainstorm some unusual, yet memorable names. Think about selecting words that evoke images related to the industry such as accuracy, efficiency, and reliability. Additionally, consider names that hint at the services you provide such as Medical Records Services, Coding Solutions and Insurance Processors. Ultimately, choose the name that stands out while portraying the image of your business in the best manner possible.

Once you've laid the groundwork for your medical billing business, formalizing your business registration is a crucial step. This will establish your business as a legal entity, ensuring compliance with governmental regulations and tax requirements. Follow these steps to ensure a smooth registration process:

• Choose your business structure, such as a sole proprietorship, partnership, LLC, or corporation, based on your needs and consult with a legal expert if necessary.
• Register your business with your state's Secretary of State office, or the appropriate state agency, to obtain your Articles of Incorporation or Organization.
• Obtain an Employer Identification Number (EIN) from the IRS for tax purposes, especially if you plan on hiring employees.
• Register for state taxes, including sales tax and unemployment insurance, if applicable to your business activities and location.
• Apply for any necessary business licenses or permits that are required in your state or municipality to operate a medical billing business.
• Consider consulting with an accountant or attorney to ensure that all legal and financial aspects of your business structure and registration are in order.

Resources to help get you started:

Explore critical resources designed for medical billing entrepreneurs, featuring insights on market trends, operational best practices, and business growth strategies:

• American Medical Billing Association (AMBA) : Offers newsletters, certifications, and extensive resources for starting and optimizing a medical billing business. Visit AMBA .
• Healthcare Business Management Association (HBMA) : Provides industry reports, educational webinars, and a community forum for networking and advice among healthcare billing professionals. Visit HBMA .
• Medical Billing & Coding Online : Features comprehensive guides, career advice, and insights into the latest technology impacting the medical billing industry. Visit Medical Billing & Coding Online .
• Becker's Hospital CFO Report : Delivers news, analysis, and best practices on hospital financial management, including valuable insights into billing and reimbursement strategies. Visit Becker's Hospital CFO Report .
• Rework by Jason Fried: Although not specific to medical billing, this book offers unconventional insights into starting and running a successful business with principles that can be applied to any sector, including medical billing. Visit Rework .

Starting a medical billing business requires compliance with various regulations and obtaining the appropriate licenses and permits. These vary by location and the nature of services offered. Here's a checklist to guide you through the process:

• Research local and state requirements for business licenses specific to medical billing services, as these can differ by jurisdiction.
• Obtain an Employer Identification Number (EIN) from the IRS if you plan to hire employees or operate your business as a corporation or partnership.
• Apply for a National Provider Identifier (NPI) number, which is necessary for billing Medicare and other insurance providers.
• Check with the Department of Health or equivalent in your state to see if there are any specific health care industry permits required.
• Consider any additional certifications, such as the Certified Professional Biller (CPB) credential, which while not mandatory, can enhance your credibility and expertise.
• Ensure compliance with the Health Insurance Portability and Accountability Act (HIPAA) by completing any necessary training and certification to handle patient information securely.
• Stay informed about the Office of Inspector General (OIG) compliance program to prevent fraud and abuse in medical billing.

What licenses and permits are needed to run a medical billing business?

In order to operate a medical billing business, you will need licenses and permits from both your state and federal government. Depending on your state and the scope of your business, different licenses may be required. At the federal level, you may need an Employer Identification Number (EIN), as well as certifications from the Centers for Medicare & Medicaid Services (CMS) or the National Committee for Quality Assurance (NCQA). At the state level, you may need to obtain a business license, an occupational license, and/or certification from the Department of Health.

Starting a medical billing business requires sound financial management from the outset, which means setting up a dedicated business bank account and securing funding if necessary. A business bank account separates your company's finances from personal funds, ensuring clear accounting and tax reporting. Here's how to approach this critical step.

• Choose a Bank: Research and select a bank that offers business banking services with favorable terms, such as low fees, online banking, and good customer support.
• Open the Account: Gather necessary documents, such as your business registration, EIN, and ownership agreements, to open your business bank account.
• Understand Banking Services: Familiarize yourself with services like merchant processing and payroll management that your bank offers to support your business operations.
• Explore Funding Options: Research potential funding sources, including small business loans, lines of credit, or grants specifically available for healthcare-related businesses.
• Prepare Documentation: Have a solid business plan and financial projections ready if you're planning to apply for funding.
• Manage Cash Flow: Use your business account to carefully manage cash flow, ensuring you have enough funds to cover ongoing expenses and unexpected costs.

Setting the right pricing for your medical billing services is crucial for the success of your business. It ensures that you remain competitive while also maintaining profitability. When determining your pricing strategy, consider the following guidelines:

• Analyze the Market: Research what competitors are charging for similar services. This will help you to set a competitive rate that aligns with industry standards.
• Assess Your Costs: Calculate your operating expenses to ensure the prices you set cover your costs and allow for a reasonable profit margin.
• Value-Based Pricing: Consider the value you bring to your clients, such as specialized services or exceptional customer support, and price accordingly.
• Flexible Pricing Models: Offer different pricing models, such as percentage-based fees, flat rates, or tiered pricing, to accommodate the diverse needs of your clients.
• Transparency: Be transparent with your pricing. Provide clear, detailed invoices that explain charges to build trust with your clients.
• Adjustments and Discounts: Be open to negotiating with long-term clients or offering discounts for high-volume work to encourage loyalty.
• Regular Reviews: Regularly review and adjust your pricing to reflect changes in the market, your service level, and business costs.

What does it cost to start a medical billing business?

Initiating a medical billing business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $17000 for launching such an business. Please note, not all of these costs may be necessary to start up your medical billing business.

Starting a medical billing business requires careful consideration when it comes to acquiring the right equipment and supplies. These tools are essential for ensuring accuracy, efficiency, and compliance with regulations. Below is a guide to help you select the necessary items for your operation.

• Computer Systems: Invest in reliable computers with sufficient processing power to handle billing software and data storage.
• Medical Billing Software: Choose HIPAA-compliant software that can process claims, manage patient data, and handle coding tasks efficiently.
• Printer and Scanner: Acquire a multifunction printer with scanning capabilities for printing invoices, scanning documents, and managing paper records.
• Secure Internet Connection: Ensure you have a fast and secure internet connection to access online payer portals and submit claims electronically.
• Backup Solution: Implement a robust data backup system to protect against data loss and maintain business continuity.
• Office Supplies: Stock up on basic office supplies such as paper, envelopes, pens, and folders for daily administrative tasks.
• Telephone System: Set up a reliable telephone system for effective communication with clients, insurance companies, and patients.
• Desks and Chairs: Provide comfortable and ergonomic furniture for your staff to promote a productive work environment.

List of software, tools and supplies needed to start a medical billing business:

• Software: Medisoft Clinical software ($179.00/license)
• Computer: Desktop computer ($600-$900)
• Printer: HP Deskjet 3755 Printer ($59.99)
• Scanner: Canon ImageFORMULA DR-M160 Scanner ($461.99)
• Fax Machine: Canon Super G3 Fax Phone System ($399.00)
• Phone System: Polycom VVX 411 IP Business Phone System ($198.99)
• Internet Connection/Phone Service: Residential internet package ($50-$70/month)
• Data Security Software: McAfee Antivirus Plus Software ($34.99)
• Office Space: Office suite in a business center (avg $500/month)
• Medical Billing Coding Manuals/Books (around $180 for complete set of manuals).

Securing the right business insurance is a critical step in establishing a solid foundation for your medical billing business. Insurance can provide protection against a range of risks, from data breaches to liability claims. Here's how to go about obtaining the necessary coverage:

• Assess your risks: Consider the potential threats to your business, such as cyber attacks, client lawsuits, or errors and omissions in billing processes.
• Research insurance types: Common insurance types for medical billing businesses include general liability, professional liability (errors and omissions), cyber liability, and property insurance.
• Consult with professionals: Speak with an insurance agent or broker who understands the healthcare industry and can tailor a policy to your specific needs.
• Compare quotes: Obtain quotes from multiple insurance providers to find the best coverage at a competitive price.
• Review and understand your policy: Before finalizing your insurance, make sure you understand the coverage limits, exclusions, and deductible amounts.
• Stay compliant: Ensure that your insurance meets any legal requirements in your state or region, and review it annually to keep up with changes in your business and the industry.

Successfully marketing your medical billing services is crucial for attracting clients and establishing a strong presence in the healthcare industry. Here are some effective strategies to help you reach potential clients and demonstrate the value of your services.

• Create a Professional Website: Develop a website that highlights your expertise, services, and the benefits of outsourcing medical billing. Ensure it is user-friendly and optimized for search engines.
• Engage on Social Media: Utilize platforms like LinkedIn, Facebook, and Twitter to connect with healthcare providers and share informative content that showcases your knowledge and services.
• Networking: Attend healthcare industry events, conferences, and local business gatherings to network with potential clients and other industry professionals.
• Referral Program: Implement a referral program to encourage your existing clients to refer new clients, providing incentives for each successful referral.
• Content Marketing: Publish blog posts, articles, and newsletters that provide valuable insights into medical billing, coding updates, and industry trends to establish authority.
• Direct Outreach: Use targeted email campaigns, cold calling, or direct mail to reach out to potential clients, offering them a free consultation or audit of their current billing processes.

Once your medical billing business is well-established and running smoothly, it's time to consider expansion. Growth can mean scaling up your operations, extending services, or reaching new markets. Here's how you can expand your medical billing business effectively:

• Explore New Markets: Look into different medical specialties or geographic areas where there's a demand for billing services.
• Invest in Marketing: Increase your online presence, attend industry events, and network with healthcare providers to attract new clients.
• Add Services: Consider offering complementary services such as coding audits, credentialing, or practice management consulting.
• Technology Upgrades: Invest in the latest billing software and technologies to improve efficiency and appeal to a broader client base.
• Staff Training and Expansion: Hire additional staff or train existing employees in specialized areas to handle increased workload and provide expert services.
• Partnerships and Alliances: Form strategic partnerships with other healthcare service providers to offer bundled services to clients.
• Franchise or License: Consider franchising your business model or licensing your proprietary processes to quickly expand your footprint.

How to Start a Medical Billing Business

Billing a patient for medical services can be complicated. Plus, not all patients can afford to pay the entire bill in full. And then there's the paperwork. With laws like the Health Insurance Portability and Accountability Act of 1996 (HIPAA), it can be confusing and difficult to know which documents need to go where. If a hospital or doctor messes things up, it's a huge legal liability.

This is where a medical billing businesses can help. They take care of billing clients on behalf of doctors, hospitals, and other healthcare providers. Medical billing companies try to simplify the process by coordinating multiple providers and billing systems, while incorporating processes to adhere to changing regulations, so healthcare providers stay compliant and can get paid for their services.

Learn how to start your own Medical Billing Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a medical billing business by following these 10 steps:

• Plan your Medical Billing Business
• Form your Medical Billing Business into a Legal Entity
• Register your Medical Billing Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Medical Billing Business
• Get the Necessary Permits & Licenses for your Medical Billing Business
• Get Medical Billing Business Insurance
• Define your Medical Billing Business Brand
• Create your Medical Billing Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your medical billing business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Medical Billing Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your medical billing business?

Business name generator, what are the costs involved in opening a medical billing business.

Software for a startup can be outsourced through a cloud-based billing software company. The price points here range from $60 per month, per user to $250 per month, per user.

Of course, you can grow your medical billing practice quite large. A medium-to large-scale operation requires professional, in-house, systems which can cost upwards of $50,000 to install. Servers add another $3,000 to $5,000 to the cost, and training adds another $3,000 to the startup total.

You'll also need backup hard drives at $50 to $150 per drive, ethernet switches and wires at $50 - $100 per wire, depending on length, software licensing at $1,500 to $3,500 per user, software upgrades at $1,500 to $3,500 per year, and IT support at $150 to $200 per hour.

What are the ongoing expenses for a medical billing business?

Ongoing expenses include software, insurance, utilities, and office supplies, along with labor costs. These costs range from $100 per month just for software, up to $10,000 or more per month if you have a small medical billing company. Medium and large companies spend hundreds of thousands of dollars per month just to keep the business running.

Who is the target market?

The target market is as wide as the healthcare industry. You can narrow your focus, of course, and target specific types of practitioners and providers. This is what most small to medium-sized medical billing companies do.

How does a medical billing business make money?

A medical billing business makes money in any of several ways: billing by the hour, billing by the claim, or taking a percentage of the money collected from claims.

The industry standard rate is $4 to $6, per claim. If a company charges fees as a percent of total sums collected, fees range between 5% and 10%. Some companies charge upwards of 15%. Hourly rates are rare these days, but may range between $20 and $50 per hour. You can also charge a flat-fee per clinician or an initial fee plus a percent of sums collected on claims.

How much profit can a medical billing business make?

Profit potential varies a lot but typical gross margins are between 5% and 10%.

How can you make your business more profitable?

Making the business more profitable involves specializing. Most successful medical billing companies don't work with everyone and anyone. A business might become known in the Chiropractic community, for example, or choose to work exclusively with veterinarians or family doctors. Some medical billing companies customize their services for specialists like cardiologists or ENTs.

Another way to improve profits for your company is to hire talented medical billing specialists who are good at collecting payments. Since this business only thrives when collections are high, your employees need good people skills, empathy, and raw sales talent to succeed at collecting current and past-due medical bills.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your medical billing business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Federal Business Licensing Requirements

Medical billing companies are legally required to operate under federal regulations regarding health information set forth by the Health Insurance Portability and Accountability Act (HIPAA) .  

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a medical billing business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Certificate of Occupancy

A medical billing business is generally run out of an office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location :
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a medical billing  business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
• If you plan to purchase or build a location :
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your medical billing business will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Medical Billing Business needs and how much it will cost you by reading our guide Business Insurance for Medical Billing Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a medical billing business

Promoting and marketing your medical billing company isn't easy. Since this market is saturated, it's best to build up a good referral network. Network with individuals just graduating med school, those in residency, and those who are just starting their practice.

Make contacts with hospital administrators. They may not need your services, but may be able to help you better understand the medical billing industry.

How to keep customers coming back

Keeping customers is easy if you do a good job on the billing. Since it's difficult to change billing companies, it's difficult to take business away from your competitors. Providers simply don't like switching. At the same time, it's difficult to take away your business once you become established.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

This business is perfect for individuals who are passionate about running a business in the healthcare industry and want to help both patients and providers make the billing process easier and more streamlined. Business owners should be naturally detail-oriented and task-focused thinkers. Medical billing is all about systems, processes, and completing tasks in a specific order to comply with federal regulation as well as internal healthcare provider policies.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a medical billing business?

A medical billing company stays busy. The owner of the business oversees day-to-day operations which include collecting delinquent accounts and establishing payment arrangements with patients, monitoring patients' payments, and following up with patients when payments do not arrive on time.

The business also subcontracts business out to collection companies when payments cannot be collected within a reasonable amount of time. It maintains a medicare bad-debt cost report, which tracks billings and collections. It also initiates claims against estates for backpayment of medical bills. Medical billing companies maintain an active list of contacts with various legal departments and law firms as well as local governments (e.g. clerk of the court), which they use to help with collection attempts.

Medical billing companies also do normal bill collections by sending out bills for payments on behalf of hospitals, doctors, and other healthcare providers.

What are some skills and experiences that will help you build a successful medical billing business?

To run this business, you'll need data entry skills, management skills, and knowledge of the healthcare and billing industry.

What is the growth potential for a medical billing business?

Medical billing can be done on a small or large scale. Starting out of your home, you can get a medical billing company up and running with a laptop computer and basic accounting and billing software. Larger operations require a staff, ranging from 5 to 10 employees up to thousands.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a medical billing business?

Make contacts early on to get up and running quickly. This is a saturated market. If you know anyone in the healthcare industry, find out what events they go to and network with them. Find out who does their medical billing. New doctors just out of residency can also be a good source of leads.

Since many hospitals already have a medical billing system, it's best to stick with practices that are just starting.

How and when to build a team

Building a team isn't necessary in this business. However, if you want to grow your business, add medical billers as fast as you can. They are the core revenue generators of the company.

Useful Links

Industry opportunities.

• American Medical Billing Association
• ClaimTek (franchise opportunity)
• American Family Care (franchise opportunity)

Real World Examples

• Physician Billing Associates

Further Reading

• Interview with a successful business owner
• Considerations when starting this business

Have a Question? Leave a Comment!

How To Start A Medical Coding Business

To start a medical coding business, one needs to acquire relevant coding certifications, draft a detailed business plan outlining the services, target market, and financial forecasts, and make necessary legal considerations for licensure and business registration.

• Last Update: November 23, 2023

• Steps in this Guide: 11

Starting a medical coding business can be a rewarding venture for individuals with a keen eye for detail and a passion for the healthcare industry. As the demand for accurate and efficient medical coding continues to rise, establishing your own coding business can provide a lucrative opportunity to both help healthcare providers streamline their operations and enjoy the benefits of being an independent entrepreneur. In this blog post, we will guide you through the essential steps and considerations to successfully launch and grow your own medical coding business. So, if you’re ready to embark on this exciting journey, let’s dive in and explore how you can make your mark in the world of medical coding!

How To Start A Medical Coding Business: Step-by-Step

Step 1: business plan creation.

To ensure the success of your medical coding business, it is imperative to create a comprehensive business plan. This plan should include a proposed budget, a well-defined business structure, a targeted marketing approach, and clear long-term goals for your business.

Step 2: Acquiring Knowledge and Certification

It is crucial for you or your staff to acquire knowledge and certification in medical coding processes from recognized bodies like AAPC or AHIMA to ensure proficiency in this field.

Step 3: Legalize Your Business

After registering your business, obtaining an EIN from the IRS and meeting local and state licensing requirements, you’ll be ready to comply with legal standards and operate your business lawfully.

Step 4: Invest in Medical Coding Software

Procure industry-standard medical coding software to efficiently manage coding tasks, automate processes, and maintain coding standards and regulatory compliance.

Step 5: Office Setup

When setting up your office, ensure you have the essential equipment such as computer systems, high-speed internet, fax machines, phone lines, and other necessary supplies. These tools are crucial for efficient operations and communication within your workspace.

Step 6: Setting Up Billing System

Properly configuring your billing system allows you to swiftly invoice clients and effectively monitor payments, ensuring timely payment and efficient financial management.

Step 7: Hiring Staff

By hiring experienced and certified medical billers and coders, healthcare providers can ensure efficient processing of patient records, codes, and bills, thereby minimizing errors and facilitating quick reimbursement.

Step 8: Marketing Your Services

Implement a comprehensive marketing plan that combines both online and offline strategies to promote your service. This encompasses building relationships with healthcare providers, participating in medical conferences, and utilizing digital marketing techniques such as SEO, social media, and PPC.

Step 9: Client Acquisition

After marketing, meet potential clients, discuss services, and sign contracts. Maintain professionalism and prioritize client satisfaction to establish strong business relationships and achieve successful outcomes.

Step 10: Ensure Security and Confidentiality

It is imperative to establish secure systems that adhere to HIPAA and other regulations for safeguarding sensitive medical data, ensuring the privacy and protection of patient information.

Step 11: Continuous Learning and Improvement

It is crucial to stay informed of healthcare regulations and coding standards, motivating staff to enhance their expertise and adapting business operations accordingly to feedback and industry modifications.

Starting a medical coding business can be a rewarding and lucrative venture for those with the right skills and passion. As we have explored in this blog post, there are several key steps to get started on the right foot. From understanding the industry and gaining the necessary certifications, to setting up an efficient workspace and marketing your services effectively, it is clear that careful planning and attention to detail are essential.

While the medical coding industry is highly competitive, there is also a growing demand for skilled professionals in this field. With the increasing complexity of healthcare regulations and the need for accurate and timely coding, there will continue to be opportunities for businesses to thrive in this industry.

By following the tips and advice provided in this blog post, you can position yourself for success in starting your own medical coding business. It is important to stay current with industry trends and continue to develop your skills as the healthcare landscape evolves.

Remember, building a successful business takes time, effort, and dedication. It is crucial to have a clear vision, a solid business plan, and a commitment to providing excellent service to your clients. With determination and perseverance, you can create a thriving medical coding business that not only meets the needs of healthcare providers but also brings personal fulfillment and financial stability.

So, if you have a passion for healthcare, attention to detail, and the drive to succeed, don’t hesitate to take the plunge and start your own medical coding business. The opportunities are waiting, and with the right approach, you can make your mark in this exciting industry. Good luck!

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How to Start a Medical Billing Business: A Step-by-Step Guide

Starting a medical billing business can be a lucrative venture, offering you the opportunity to provide essential services to healthcare providers while enjoying the benefits of running your own business. In this comprehensive guide, we’ll walk you through the step-by-step process of launching your own medical billing business, from understanding the industry to setting up operations and attracting clients.

Why Start a Medical Billing Business?

The medical billing outsourcing market is a fast-growing industry. According to Grand View Research , the U.S. market size was valued at 5.2 billion dollars in 2022, and is expected to grow to 12.3 billion by 2030. 

This is mainly because healthcare providers are increasingly relying on outsourced medical billing services due to complex coding systems, growing healthcare costs and federal mandates for electronic health records, or EHR. More and more, doctors are looking to outsource time-consuming administrative functions such as revenue management.

Understand the Medical Billing Industry

Before diving into the business, it’s crucial to have a solid understanding of the medical billing industry. Research the latest industry trends, regulations, and best practices to ensure you’re well-prepared to provide accurate and up-to-date services.

Gain Relevant Education and Training

While formal education isn’t always mandatory, obtaining relevant training and certifications will significantly enhance your credibility. Consider enrolling in medical billing and coding courses, obtaining certifications such as Certified Professional Biller (CPB), and staying informed about changes in healthcare laws.

In order to bill appropriately, a medical biller and coder should also have a basic understanding of anatomy, physiology and pharmacology. They should also understand medical and insurance terminology. There are three basic types of coding that a biller must be familiar with:

• CPT : Current Procedural Terminology
• HCPCS: Healthcare Common Procedure Coding System, produced by the Centers for Medicare and Medicaid Services
• ICD-11 : International Classification of Diseases

Programs are available ranging from one to four years, from certifications and Associates Degrees to Bachelor’s, Master’s and even Doctorate’s in the field. Shorter programs are often available at community colleges and technical/vocational schools, whereas higher level degrees come from in-person and on-line schools. There is financial aid available for many of these programs.

Once you have completed your education, you will need to pay and sit for the exam from your chosen organization to become credentialed:

• American Medical Billing Association (AMBA)
• American Academy of Professional Coder’s (AAPC)
• American Health Information Management Association (AHIMA)

These organizations offer a range of certifications from Certified Coding Associate to Registered Health Information Administrator, depending on the level of education you choose to obtain.  The costs for these tests range from $300 and up.

Develop a Business Plan

Creating a well-thought-out business plan is essential for the success of your venture. Outline your business goals, target market, services offered, pricing strategy, and marketing approach. A comprehensive business plan will guide your decisions and attract potential investors or partners.

Choose a Legal Structure

Decide on the legal structure of your business, such as sole proprietorship, partnership, LLC, or corporation. Each structure has its own implications for liability, taxes, and management, so consult a legal professional to determine the best fit for your business.

Secure Necessary Licenses and Permits

Depending on your location and the nature of your medical billing business, you may need to obtain specific licenses and permits. Research the requirements in your area and ensure compliance before launching your business.

Set Up Your Office and Equipment

Create a functional workspace equipped with the necessary tools, such as computers, medical billing software , and office supplies. Invest in reliable software that can handle the complexity of medical billing tasks and ensure data security, such as TotalMD.

Look for medical billing software that is catered for medical billers and not just for healthcare providers. This will save you a lot of money because most medical software programs are priced per provider, not per user. TotalMD has a great pricing structure specifically for medical billers.

Develop Pricing and Services

Determine the pricing structure for your services. Research competitors’ rates and consider the complexity of the tasks you’ll be handling. Offer a range of services, including insurance claims submission, reimbursement tracking, and patient billing, to cater to different client needs.

There are three ways that billing is done through a billing service:

• Per-Claim Billing:  a set amount is charged for each claim, regardless of the amount of work it takes to get it ready to bill.  If the claim is rejected on the front-end, those corrections are included in the price. If the claim denies on the backend, an additional fee can be charged for the resubmission.  These fees can range from between $1 to $8 per claim.  
• Hourly:  Hourly may be the best way to go if you are also doing practice management for the providers.  The Bureau of Labor Statistics shows that an average hourly wage for a medical billing clerk is $16.50 per hour.  Providers can expect to pay more to an independent contractor.
• Percentage of Collections: This is popular as it encourages the biller to maximize reimbursement for their providers.  These percentages can range from 4% – 10% depending on many different factors.

Establish Billing Processes

Design efficient billing processes to ensure accuracy and timely submissions. Implement systems for verifying patient information, coding procedures correctly, and communicating with healthcare providers and insurers. This is where reliable medical billing software comes in.

Build a Strong Online Presence

In today’s digital age, having a professional website and active social media profiles is crucial for reaching potential clients. Optimize your website with relevant keywords, clear service descriptions, and client testimonials to boost your online visibility.

Network and Market Your Services

Network with local healthcare providers, clinics, and medical offices to build relationships and gain referrals. Attend industry events, join medical associations, and leverage online platforms to showcase your expertise and establish credibility.

Conclusion:

Starting a medical billing business requires careful planning, dedication, and a commitment to staying informed about industry changes. By following this step-by-step guide, you’ll be well-equipped to launch your business, provide valuable services to healthcare providers, and carve out a successful niche in the medical billing industry. Remember that persistence and a focus on delivering accurate and efficient billing services will be key to your business’s long-term success.

Andrea Jaramillo

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• Jul 16, 2022

How to Start a Business as a Medical Billing and Coding Specialist

A Medical Billing and Coding specialist has options. You don't necessarily have to settle working for someone else. There is a high-demand for medical billing and coding firms especially for companies that want to outsource their insurance claims.

Medical coding is the process of collecting billable information from the medical record and clinical paperwork, whereas medical billing is the process of using such codes to establish insurance claims and invoices for patients. Creating claims is the point at which medical billing and coding come together to form the backbone of the healthcare revenue cycle.

For many various sorts of professions, starting a medical billing firm may be a fulfilling and lucrative option. You can establish an independent or at-home company if you have medical billing and coding qualifications or are working toward them.

You may even establish your own business by recruiting and training a staff of expert billers. The key here is that you need to really understand the industry of billing and coding. The best way to understand it is to earn your certification.

Before start a business, become an expert in the industry is a must. In any case, the medical billing sector is a promising one that is increasing year after year.

Understand Your Target Audience

Learn about start up costs, earn your medical billing and coding credentials, create a business plan, apply for a business license.

Choose a Billing Software

Develop Marketing and Sales Strategies

Network t o Grow

Final Thoughts

This will give you a synopsis on how to start your own Medical Billing and Coding business.

Starting a business requires research and understanding who your target audience is. Step one requires you to become acquainted with the industry. The more confident you are the better you can make a decision that is effective.

Types of things you want to research:

Competitors

Cost and expenses

Target Audience such as doctor offices, medical centers, etc.

Once you figure out these important details, you can move onto the next step.

Starting a business requires capital investment, just like any other. Depending on the size and complexity of your new firm, you may spend anywhere from $1,000 to $10,000 to get it started. However, regardless of the size of your organization, the following items are required to get started:

Licensing and medical billing software

Computer hardware, as well as a multi-function commercial copier

Technical assistance

CMS 1500 forms are a dependable company phone system.

Medical Billing and Coding specialists are required to earn certifications in most states. You will need to enroll in a training course if you do not already have your medical billing qualifications.

Becoming a professional medical biller needs extensive understanding of medical billing (including any specialized practices you may serve) as well as insurance claim management. This is critical since medical practitioners will be entrusting you with their revenue management!

You can earn your credentials via online courses or in-person classes. We recommend taking online courses because their normally quicker and more efficient. Additionally, Medical Billing and Coders really need to know how to use technology well.

New business owners should draft a business plan that includes at least 10-years worth of ideas and strategy.

When launching a medical billing company, it is critical to develop a business strategy. To smoothly recruit new consumers, you should evaluate the medical billing services you wish to concentrate in. Consider what your target market will seek for when selecting the greatest medical billing firm. For example, when you first begin, ask yourself logistical questions such as:

Do you want to work remotely or have a local office?

Are you focused on creating a franchise?

Do you want to do it alone or collaborate with other medical billers?

What is your ideal business size?

What are your projects for the month to be profitable?

What kinds of medical billing services will you offer?

Which kind of practices will you assist?

How will you set your fees?

Who will be part of your team?

Do you need an accountant to help you handle your money and taxes?

All of these are significant

These are questions that are important to the overall success of your business. Before starting, having a written plan will keep you on track.

Your business has to be registered. Medical Billing and Coding firms are no exception to the rule. To start a legitimate medical billing firm, whether it's a small home-based operation or a major corporation, you must first obtain a license. You can incorporate an LLC or a Corporation based on your company strategy (see above).

Before admitting new clients, you must also register for taxes. To do so, you must apply for an Employer Identification Number (EIN), which should be a quick and straightforward process. However, don't miss this step - it's critical for adhering to legal requirements.

Choose the Right Software Solution

Technology is crucial to Medical Billing and Coding. Medical billing can be managed in a variety of ways, including electronically and on paper. In today's market, electronically is preferred.

We recommend adopting electronic-based billing software since technology in the medical billing sector changes so frequently.

It might be difficult to pick one of the various types of medical billing software available these days. Consider the following while making your decision:

User friendliness

Reviews and reliability

Suppleness of usage

Back-end task compatibility and integration

Device compatibility and mobile alternatives are built-in to the unified communication system.

Once you have a general understanding of what Medical Billing and Coders need to be proficient, you can determine the right software solution for your firm that can be used to offer to other medical companies.

Create and Execute a Consistent Marketing Strategy

A consistent marketing strategy is irreplaceable for any business. Sales and marketing go hand-in-hand. Marketing is more than simply adding content on social media. You need to make sure you are reaching the right audience too. If you're not sure how to create a marketing strategy, we suggest outsourcing it to a marketing agency.

However, sometimes you'll work on a limited budget.

You want to keep your marketing strategy simple and easy to follow. YouTube can help you find effective ways to create advertisements such as on Google Ads or Facebook Ads. Additionally, Google My Business is free to use. Reviews can go a long way too.

There is a difference between paid and organic traffic.

A marketing plan assists you in developing products and services with the most profit potential. This is because marketing strategy begins with market research, which takes into account your ideal target client, what your competitor is doing, and what trends may be on the horizon.

Network to Grow

There are different ways to network. Networking helps you grow because you build relationships. Consumers who trust you are more likely to purchase your services.

Finally, after you've broken into the medical billing market, you must expand your network! There are several approaches you may take such as attending fairs or building relationships on LinkedIn.

The medical billing and coding industry is predicted to rise by 15% between now and 2024, according to the Bureau of Labor Statistics. That equates to over 30,000 employment openings over the next seven years. Not only are there a lot of job vacancies in coding and billing, but many of them are also rather rewarding.

Medical Billing and Coders have options. Healthcare is a large sector. During the COVID-19 crisis, we saw an increase in the healthcare industry as a whole. Dentists, doctor offices, hospitals, and more are in need of Medical Billing and Coding firms. They can choose to work for a company or build their own.

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• Starting Your Own Medical Coding Business

Are you independent? Can you concentrate even when there are a million things going on around you? Are you able to meet deadlines if there's no one breathing down your neck, reminding you the cases are due tomorrow, or in an hour? Do you know what you want, and are you willing to do whatever it takes to get it?

These are just a few of the qualities of a successful entrepreneur. It's absolutely essential that you be a self-starter and be motivated to make your business a success. Starting a business isn't easy. You'll have to put in long hours, sometimes sacrificing your personal life, especially in the beginning. Does your family support you? You'll need their support and understanding that you won't be able to spend as much time with them or devote the same attention as you normally would, at least in the beginning. Having their support is crucial to your ultimate success. You need to be able to focus on building your business without worrying how others will react. Here are some valuable tips for starting and building a successful medical coding business: - Make sure you're certified. Once you're educated as a medical coder, you want to get certified through either the American Health Information Management Association or the American Academy of Professional Coders. Employers want medical coders who are certified, and your potential clients will be no different. Become certified and maintain that certification. - Gain experience. Starting a business right after you've graduated from a medical coding program and after you've earned your certification is an ambitious goal, but you're best bet is to get experience before you strike out on your own. Get a job in a hospital, a clinic or a physician's office, etc. - whichever setting you prefer - and get experience. In addition to invaluable experience, you'll also meet valuable contacts. - Make sure you do your best job every day - excel as a medical coder. Be the go-to coder. You want to make an impression on your supervisors and your coworkers. They could be valuable contacts when you start your business. - Network. You want to start networking before you start your business and aggressively network after - that means attending meetings of AHIMA and/or AACP and other professional organizations. Become an expert on message boards, answering questions for other coders and helping new or prospective medical coders by offering advice. Make sure your name and title is in the signature line, so people know who you are. Include your website address once your business is up and running. - Talk with others. Talk with other medical coders who have started their own businesses. If you're not comfortable talking with medical coding business owners, who will later be your competition, contact business owners in another town or state. Often, other small business owners can give you invaluable tips and advice you can't find anywhere else. - Understand HIPAA. You must know and understand the fine details of HIPAA. In fact, you can't just know it - you must be an expert in it, and you need to make sure you follow it to the letter. Otherwise, you may lose your business. You can learn more about HIPAA by clicking here. - Write your business plan. You've probably heard the old saying, "If you fail to plan, you plan to fail." Your business plan is a crucial part of your business. Your business plan will allow you to map your plan for your business, including how you will finance the startup costs, what marketing techniques you will use and your goals for the future. You can learn everything you need to know about business plans by visiting the Small Business Administration. The SBA offers advice to small business owners and can answer any questions you may have. Local chapters of the SBA often offer small business seminars, covering a variety of topics, for a minimal fee. Bplans.com is another valuable business planning resource. Another invaluable small business resource is SCORE. SCORE is comprised of retired business owners who offer advice to new business owners like you. Visit their website for more information. You can also receive counseling from a retired business owner via an in-person appointment or via email. SCORE also offers small business workshops for a minimal fee. Choose your business type and register your business with the state. Your next step, once the business plan is written, is to determine which business entity you will have: sole proprietorship, partnership or corporation.

• Sole proprietorship - A sole proprietorship means you own the business. You will be personally liable for any lawsuits or other action that is taken against the business. For example, if your medical coding business defaults on a loan, you will be responsible for it.
• Partnership - A partnership is viable for two or more people going into a business. So, if you and friend or relative decide to open a business, you might choose the partnership entity. The main disadvantage of a partnership is you are responsible for your partner's actions and vice-versa.
• Limited Liability Company (LLC) - An LLC is the form of corporation many small businesses choose. Small businesses enjoy tax advantages and allow their owners flexibility in management.
• Corporation - Incorporating is the most expensive and time-consuming business entity to setup. Basically, corporations are run according to stock ownership. Small businesses can incorporate, and you'll want to talk to an attorney or a SCORE advisor if you think this is the option you want to pursue.

Once you decide which entity you will create, you'll want to register your business with your state. Visit your state's website for more information on registering your business and associated costs. You'll also find many incorporation services online that can help with getting your business set up as a corporation or LLC. Many lawyers also specialize in business formation. - Research your city's zoning laws. Will you need a permit to operate a business from your house? Contact your local zoning board to find out if you need a permit, and if so, the procedure and cost of obtaining one. - Set up your office. It's critical you have space in your home specifically designated for your home office. If you have an extra room, use it. Make sure your family and friends know your work hours, so they don't interrupt you. Among the equipment you will need:

• A comfortable chair
• A desktop computer
• Internet access (high speed is preferable, and you want to make sure you have proper security and firewalls.)
• Filing cabinet
• Coding manuals
• Medical coding software (i.e. SpeedECoder, Medical Insurance & Coding Activity Software or Alpha II Coding Software. Talk with other medical coders to find the most popular, and most effective, coding software.)
• Medical billing software (if you are educated in both billing and coding, you may want to consider offering both.)

- Start a website. Every business - whether a small business or a multi-national conglomerate - needs a website. A website is an effective tool for marketing yourself (your skills, your experience and your certifications) and your business. If you don't know how to design your own website, you can hire a web designer. Unfortunately, professional web designers can be costly. You may want to consider contacting your local art school or college, and finding a student to create your website. It will cost you less, and the student will add to his portfolio. - Ready, set, marketing. Marketing is essential to the growth and success of any business, and your medical coding business is no different. You can market in a variety of ways, including:

• Networking. We've already discussed networking; however, it's important to emphasize just how crucial networking is in your business' success. Use the contacts you've established to get the word out about your business.
• Create, or have someone else create, a brochure to send to doctors, hospitals and other healthcare facilities. Make sure your brochure is thoroughly proofread - errors, no matter how small you may think they are, can destroy your credibility. Ensure all copy is clean before having your brochures printed. A few days after your brochure was mailed, start calling the recipients. Follow-up calls are critical.
• Visit local doctor's offices, clinics and other healthcare facilities. Take along your brochure, business cards or have pens printed - with your business name - and give them to the staff. Leave your information with the receptionist then follow-up a few days later.
• Visit the Small Business Administration and SCORE for even more marketing ideas.

Emphasize the benefits. Emphasize the many benefits healthcare providers will enjoy when they outsource their medical coding to your small business. Benefits include:

• They'll save money on benefits including health insurance.
• They'll save space - they won't have to worry about finding office space since you'll be working from home.
• They'll still be able to reach you via email, instant messenger or phone instantly.

- Offer to sign a non-disclosure agreement. All work you do for individual clients must be kept completely confidential and must adhere to all HIPAA rules and regulations. Therefore, you may want to offer to sign a non-disclosure agreement with your clients. Have a lawyer draw up an agreement, or ask a SCORE advisor to refer you to a lawyer. - Start working. Once you've gotten clients, you'll be ready to start working. Some clients may want you to access their files from their local computer as they do with remote coders. Alternately, you may use your own computer software and pick up files from your clients. You'll want to discuss your clients' wants, needs and concerns, and arrange a situation that is comfortable for you both. - Finally, keep at it. You're likely not going to be a success overnight, but don't get discouraged. Even the most successful entrepreneurs faced their share of failures and down times. Don't give up - persist - and you'll eventually see your medical coding business achieve success.

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Readers' Questions

How t start own medial coding comany?

Starting your own medical coding company can be a rewarding and profitable venture. Here are some steps to help you get started: Gain experience: Before starting your own medical coding company, it is essential to have a thorough understanding of the medical coding industry. Gain relevant experience by working as a medical coder in a healthcare setting or completing a medical coding training program. Research the market: Conduct thorough market research to understand the demand for medical coding services in your area. Identify your target market and competitors to determine your niche and competitive advantage. Create a business plan: Develop a detailed business plan that outlines your company's goals, target market, services offered, pricing strategy, marketing plan, and financial projections. A well-structured business plan will guide you through the process of starting and growing your medical coding company. Obtain necessary certifications: Ensure that you have the necessary certifications and credentials to operate as a medical coding company. This may include obtaining a Certified Professional Coder (CPC) certification from the American Academy of Professional Coders (AAPC) or a Certified Coding Specialist (CCS) certification from the American Health Information Management Association (AHIMA). Set up your business: Register your medical coding company with the appropriate state and local authorities, obtain any necessary business licenses and permits, and set up a business bank account. Consider hiring a lawyer or accountant to help you navigate the legal and financial aspects of starting a business. Invest in technology: Invest in medical coding software and technology to streamline your coding processes and ensure accuracy and efficiency. Consider partnering with electronic health record (EHR) providers to enhance your service offerings. Market your services: Develop a marketing strategy to promote your medical coding company and attract clients. This may include creating a professional website, networking with healthcare providers, attending industry conferences, and using social media to reach potential clients. By following these steps and putting in the necessary time and effort, you can successfully start and grow your own medical coding company. Good luck!

How to start medical cosing business?

Starting a medical coding business can be a lucrative and rewarding venture. Here are some steps to help you get started: Gain relevant experience and knowledge: Ensure that you have a thorough understanding of medical coding and billing by completing relevant courses or certifications. This will enable you to provide accurate and efficient coding services. Create a business plan: Develop a detailed business plan that outlines your goals, target market, service offerings, marketing strategies, and financial projections. This plan will guide you throughout the startup process. Obtain necessary certifications: Determine the certifications you need to operate your medical coding business effectively. Consider obtaining certifications such as Certified Professional Coder (CPC) or Certified Coding Specialist (CCS). Set up your office: Establish a professional office space equipped with necessary tools and resources, including computers, coding software, coding books, and a secure internet connection. Ensure that your office conforms to all relevant HIPAA (Health Insurance Portability and Accountability Act) regulations. Define your target market: Identify your target market, such as small clinics, hospitals, or individual doctors. Research the demand and needs of your potential clients to tailor your services accordingly. Develop a pricing structure: Determine how you will charge for your coding services. Common methods include charging per hour, per code, or offering package deals. Consider setting competitive rates based on industry standards. Create a marketing strategy: Develop a strong marketing strategy to attract clients. This can include creating a professional website for your business, attending medical conferences or events, networking with healthcare providers, and utilizing digital marketing techniques like social media and online advertising. Ensure compliance with regulations: Familiarize yourself with healthcare laws and regulations, particularly regarding patient privacy and confidentiality. Implement policies and procedures to ensure compliance with HIPAA regulations. Develop strong relationships with clients: Provide excellent customer service, maintain clear communication, and ensure the accuracy and timeliness of your coding services. Build trust and reliability with your clients to foster long-term relationships. Stay updated with industry changes: Medical coding is an evolving field, so it is crucial to stay updated with the latest coding guidelines, changes in healthcare laws, and industry best practices. Participate in regular training and continuing education to enhance your skills and knowledge. Remember, starting a medical coding business requires dedication, professionalism, and ongoing learning. By following these steps and providing high-quality services, you can establish a successful and reputable medical coding business.

How to start a medical billing and coding business from home?

Starting a medical billing and coding business from home involves several steps. Here's a step-by-step guide to help you get started: Research and gain knowledge: Familiarize yourself with medical billing and coding procedures, industry standards, regulations, and software used in the field. You can take online courses, attend workshops, or even pursue certification to enhance your knowledge and credibility. Create a business plan: Outline your goals, target market, services offered, pricing structure, and marketing strategies in a comprehensive business plan. This will serve as a roadmap for your business and help attract potential investors or partners if needed. Legal considerations: Determine the legal structure of your business, such as whether you want to operate as a sole proprietorship, partnership, or LLC (Limited Liability Company). Obtain the necessary permits, licenses, and certifications required to operate in your locality. Set up your home office: Designate a dedicated space in your home as your office. Equip it with essential equipment like a computer, high-speed internet, printer, scanner, and medical billing software. Ensure you have a secure system to store and handle confidential patient information. Develop a marketing strategy: Identify your target market and create a marketing plan to reach potential clients. Utilize online platforms like social media, professional networking sites, and your website to promote your services. Consider attending local medical conferences or joining medical organizations to network with healthcare professionals. Obtain clients: Start networking and reaching out to potential clients, such as small medical practices, clinics, or individual physicians. Highlight your qualifications, expertise, and the benefits they will gain by outsourcing their medical billing and coding needs to your business. Offer competitive pricing and excellent customer service to attract and retain clients. Build relationships with insurance companies: Establish relationships with insurance companies, as they play a crucial role in the reimbursement process. Understand their requirements, processes, and ensure your billing and coding procedures align with their regulations. Ensure compliance with HIPAA: Familiarize yourself with the Health Insurance Portability and Accountability Act (HIPAA) regulations and ensure your business adheres to them strictly. Protect patient privacy and employ secure systems for managing confidential information. Consider outsourcing or hiring additional staff: As your business grows, you may need to consider outsourcing certain tasks or hiring additional staff to handle the workload. This could include hiring certified medical coders, billing specialists, or administrative support. Continuous learning and development: Stay updated with the latest industry trends, regulations, and coding updates. Attend workshops, webinars, and relevant conferences to expand your knowledge base and ensure accuracy in your services. Starting a medical billing and coding business from home requires dedication, professionalism, and continuous learning. With the right approach and persistence, your business can thrive in the growing healthcare industry.

How to start a medical coding business from home?

Starting a medical coding business from home can be an exciting venture. Here are some steps to get you started: Research and gain knowledge: Understand what medical coding involves, including the different code sets such as ICD-10, CPT, and HCPCS. Familiarize yourself with the industry standards and guidelines. Obtain necessary certifications: While certification is not a legal requirement in all cases, having credentials like the Certified Professional Coder (CPC) or Certified Coding Specialist (CCS) will boost your credibility and increase your chances of success. Create a business plan: This plan should outline your business goals, target market, services offered, competition analysis, and pricing strategy. It will serve as a roadmap for your business. Set up a home office: Dedicate a specific area in your home that is free from distractions. Equip it with the necessary tools, such as a computer, high-speed internet, coding books, reference materials, and storage for client records. Establish legal requirements: Decide on the legal structure of your business, such as becoming a sole proprietor or forming an LLC. Register your business, obtain any necessary licenses or permits, and obtain liability insurance. Build a professional network: Join professional organizations such as the American Association of Professional Coders (AAPC) or the American Health Information Management Association (AHIMA). Attend industry conferences, workshops, and webinars to connect with peers, learn about new developments, and market your services. Marketing and branding: Develop a professional website that showcases your services, certifications, and contact information. Create marketing materials like business cards, brochures, and flyers. Utilize social media platforms, online directories, and local networking events to promote your business. Obtain clients: Reach out to medical practices, hospitals, clinics, and other healthcare providers to offer your coding services. Consider offering a trial period or introductory rates to attract clients initially. Develop client contracts: Draft comprehensive contracts outlining the scope of work, fees, timeline, and confidentiality agreements. Ensure that all parties understand and agree to the terms before starting a project. Continuous learning and improvement: Stay updated with the latest coding guidelines and industry changes. Attend webinars, workshops, and conferences to improve your skills and knowledge. Invest in continuing education to maintain your certification. Remember, starting a business requires dedication, patience, and hard work. Providing quality service, building strong relationships with clients, and maintaining professionalism are key to the long-term success of your medical coding business.

How to start a medical coding consultant company?

Research and understand the fundamentals of the medical coding industry. You should know everything from the basic rules and regulations to the latest industry trends. Obtain the necessary certifications or qualifications. You will need to be certified in codes for different states, practice areas, and perhaps even hospitals. You may also need additional professional designations such as a Certified Medical Coding Consultant or a Certified Medical Auditor. Develop a business plan. It is important to have a thorough business plan that outlines the goals of your medical coding consultant company. Include things like services you will offer, pricing, target market, marketing strategies, and financial projections. Set up the business. Register your business with the appropriate authorities, secure the necessary licenses and insurance, and open a business bank account. Invest in the right technology. You will need a reliable computer and coding software. Research different options and find the best fit for your needs. Market your business. Use marketing materials such as brochures and business cards to let potential clients know you exist. Use social media and other online marketing channels to reach potential clients. Network. Reach out to other medical coding professionals in your area. Join professional organizations to increase your name recognition and build relationships. Stay up to date. Medical coding is a rapidly changing field so it’s important to stay on top of the latest industry developments. This knowledge will help you stay competitive.

How to start your own medical billing and coding business?

Choose a business structure: Before officially launching your medical billing and coding business, you’ll need to decide on a business structure. Some of the options you can choose from include a sole proprietorship, partnership, limited liability company (LLC), and corporation. Register your business: If you’re not operating as a sole proprietorship, you’ll need to register your business with the state. This will involve filing the necessary paperwork and paying the associated fees. Obtain the required licenses and permits: Depending on where your business is located, you may need to obtain certain local and/or state licenses or permits in order to operate legally. It’s important to research this before opening your business. Secure financing: Most medical billing and coding businesses are started with the help of a business loan or financing. If you don’t have any startup capital of your own, you’ll need to secure financing from outside sources. Find medical billing and coding software: You’ll need to purchase medical billing and coding software in order to process claims and keep track of patient information. There are a lot of options on the market, so be sure to do your research before making a decision. Market your business: Once everything is in place, it’s time to start marketing your business. This will involve creating a website, utilizing social media, and building relationships with healthcare providers.

How to start a coding business?

Research the market: Start by researching the market and define what services you will offer. Consider who your target market is, what types of projects you want to work on, and how you plan to differentiate your business from competitors. Get your finances in order: Before you can start your coding business, you will need to make sure your finances are in order. This includes having the initial capital to get the business off the ground, as well as setting up any necessary accounts for taxes and record keeping. Create a business plan: Creating a business plan is essential for any business. It will help ensure that you have a clear understanding of your goals, the resources required to reach them, and an actionable plan to get there. Build a portfolio: Creating a portfolio is key to demonstrating your coding abilities and can be an important tool for marketing your business. Consider creating an online portfolio and actively promoting it to potential clients. Develop your network: Networking with other professionals in the coding field is a great way to build relationships and generate leads for your business. Develop relationships with established influencers in order to create referral opportunities for yourself. Market your business: Once you have created your portfolio, developed a business plan, and built a network of contacts, you can start actively marketing your services to potential customers. Consider using online platforms to reach your target audience and make sure to keep up with industry trends.

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Medical Billing Business

Back to All Business Ideas

How to Start a Medical Billing Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: Mark Stewart

Mark Stewart is the in-house Certified Public Accountant, an accomplished author and financial media specialist.

Published on April 14, 2023 Updated on March 13, 2024

Investment range

$1,900 - $7,800

Revenue potential

$50,400 - $360,000 p.a.

Time to build

Profit potential

$45,360 - $144,000 p.a.

Industry trend

Medical billing is complicated, largely thanks to the Health Insurance Portability and Accountability Act (HIPAA) and its many regulations. Yet this is why most medical practices outsource billing, making medical billing services a fast-growing $5 billion US industry.

If you have medical billing certification and experience, or even if you don’t, you could start a medical billing company and help ensure patient privacy while making a very good living. 

But in addition to medical billing knowledge, you’ll need some business savvy. Fortunately, this step-by-step guide lays out all the information you need to start a successful medical billing business. 

Step by Step Business prioritizes real-life experience. Our Entrepreneur Spotlight Series features interviews with diverse industry leaders, offering direct insights to readers.

If you’re venturing into the world of medical billing or insurance advocacy, this interview with Adria Gross offers invaluable insights .

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

• Growing market
• Provide a valuable healthcare service
• Low startup costs
• Education and certification required
• Competitive industry

Medical billing industry trends

Industry size and growth.

• Industry size and past growth – The U.S. medical billing outsourcing industry was worth $4.7 billion in 2021 after modest growth the previous year.(( https://www.grandviewresearch.com/industry-analysis/us-medical-billing-outsourcing-market ))
• Growth forecast – The U.S. medical billing outsourcing industry is projected to grow an impressive 11.34% annually through 2030. 

Trends and challenges

• Technological advancements are automating many tasks in medical billing, boosting efficiency and enabling billing companies to handle more clients.
• Cloud-based Software as a Service (SaaS) options are reducing hardware costs for medical billing businesses.
• Medical billing and privacy laws are updated often and medical billing firms need to stay up-to-date with continuing education.
• Medical practices often fail to provide the correct information to billing companies, causing challenges and delays. 

Demand hotspots

• Most popular states – The most popular states for medical coders are Nevada, New Jersey, and Delaware. (( https://www.zippia.com/medical-coder-jobs/best-states/#maine ))
• Least popular states – The least popular states for medical coders are New Hampshire, Oklahoma, and Iowa.

What kind of people work in medical billing?

• Gender – 87% of medical coders are female, while 13% are male. (( https://www.zippia.com/medical-coder-jobs/demographics/ ))
• Average level of education – The average medical coder has an associate’s degree.
• Average age – The average medical coder in the US is 45.5 years old.

How much does it cost to start a medical billing business?

Startup costs for a medical billing business range from $2,000 to $8,000. Costs on the low end include medical billing software and a computer system, and assume that you already have medical billing certification. The higher end includes training and certification costs.

Learn more about training and certification at the American Medical Billing Association . 

You’ll need a handful of items to successfully launch your medical billing business, including: 

• Computer system
• Medical billing software

How much can you earn from a medical billing business?

Generally, medical billers charge 7% to 10% of monthly collections. These calculations assume an initial charge of 7% and a profit margin of about 90%.

In your first year or two, you could work from home and collect $60,000 per month, bringing in more than $50,000 in annual revenue. This would mean more than $45,000 in profit, assuming that 90% margin. 

As you gain traction, you could increase collections to $300,000 per month and increase your rate to 10%. At this stage, you might have an office and staff, reducing your margin to around 40%. With annual revenue of $360,000, you’d make a tidy profit of $144,000.

What barriers to entry are there?

There are a few barriers to entry for a medical billing business. Your biggest challenges will be:

• Getting the training and certifications needed
• Breaking into a competitive market

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Step 2: hone your idea.

Now that you know what’s involved in starting a medical billing business, it’s a good idea to hone your concept in preparation for entering a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research medical billing businesses in your area to examine their services, price points, and customer reviews.

• Make a list of medical billing companies that offer similar services. 
• Review your competitors’ services – their features, pricing, and marketing strategies. This should give you information about what kind of medical practices they target. 
• Check their reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. You want to capitalize on their weaknesses. For example, maybe your competitors don’t work with small practices, and you could make that your niche market. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing a medical billing company that specializes in veterinary practices or has a streamlined, tech-friendly billing processes. 

You might consider targeting a niche, such as dental practices .

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

Your medical billing services are pretty straightforward. You’ll work with insurance carriers and patients to collect monies owed. 

How much should you charge for medical billing?

Typical fees are between 7% and 10% of collections, but you’ll also want to consider your costs when setting your rates. 

Once you know your costs, use this Step By Step profit margin calculator to determine your markup and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be medical practices. You might specialize in certain types of practices or work with a variety of clients. You can find medical practice managers on LinkedIn, but your best bet may be calling medical practices directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Medical Billing Company Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “medical billing” or “medical billing and coding”, boosts SEO
• Name should allow for expansion, for ex: “HealthCharge Network” over “Dental Bill Solutions”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator . Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Medical Billing Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Summarize the key points of your business plan, including your target market, unique value proposition, and financial projections.
• Business Overview: Provide an overview of your medical billing company, its location, the healthcare providers you serve, and the specific medical billing services you offer.
• Product and Services: Detail the medical billing services your company provides, such as claim processing, revenue cycle management, denial management, and electronic health record integration.
• Market Analysis: Analyze the healthcare industry and the demand for medical billing services, considering factors like healthcare reforms, insurance trends, and the potential client base in your region.
• Competitive Analysis: Identify and evaluate competitors in the medical billing industry, emphasizing your company’s strengths, such as specialized expertise or advanced technology solutions.
• Sales and Marketing: Explain your strategies for acquiring clients, including outreach to healthcare providers, digital marketing, partnerships with medical practices, and referral programs.
• Management Team: Introduce key members of your team, emphasizing their qualifications, experience in medical billing, and any relevant certifications.
• Operations Plan: Describe the day-to-day operations of your medical billing business, covering areas like claims processing, compliance with healthcare regulations, software and technology usage, and customer support.
• Financial Plan: Present financial projections, including revenue forecasts, pricing strategies, expense budgets, and cash flow analysis, to demonstrate the financial viability and growth potential of your business.
• Appendix: Include any supplementary materials, such as client testimonials, case studies, or compliance documentation, to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to medical billing businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your medical billing business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company ( LLC ) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.  Here’s how to form an LLC .
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.  Read how to start a corporation here .
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have. 

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2023

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a medical billing business. You also may be able to obtain student loans for your training and certification.

Step 8: Apply for Medical Billing Business Licenses and Permits

Starting a medical billing business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your medical billing business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as  RXNT or Kareo , to manage your billing, workflows, accounts receivables, and reporting.  

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Consultation Now”. This can sharply increase purchases.  

Here are some powerful marketing strategies for your future business:

• Targeted Educational Content: Develop informative content that educates healthcare providers on the complexities of medical billing, showcasing your expertise and positioning your business as a valuable resource in the field.
• Partnerships with Healthcare Consultants: Collaborate with healthcare consultants who can refer their clients to your services, leveraging their trust and expertise in the industry to build credibility for your medical billing business.
• Specialized Webinars and Workshops: Host webinars or workshops focusing on specific medical billing challenges or updates, attracting healthcare professionals seeking insights and solutions while establishing your business as an authority in the niche.
• Social Proof and Testimonials: Collect and showcase success stories from satisfied clients, using them as social proof on your marketing materials to build trust and demonstrate the effectiveness of your medical billing services.
• Leverage Local Publications: Feature your business in local healthcare publications or community newsletters, reaching out to nearby medical practices and clinics to increase your visibility within the local healthcare ecosystem.
• Targeted Direct Mail Campaigns: Develop targeted direct mail campaigns to reach healthcare providers in your area, emphasizing the cost-effectiveness and efficiency of your medical billing services.
• Engage in Online Forums and Groups: Participate in online forums and groups where healthcare professionals discuss industry challenges and solutions, providing insightful contributions that position your business as a knowledgeable and supportive partner.
• Utilize SEO for Niche Keywords: Optimize your online content for niche keywords related to medical billing challenges and solutions, ensuring that your business appears prominently in search engine results for relevant queries.
• Referral Programs for Clients and Partners: Implement referral programs that reward both existing clients and healthcare partners for referring new business to your medical billing services, creating a mutually beneficial network.
• Attend Healthcare Conferences: Actively participate in healthcare conferences and trade shows, where you can network with potential clients and showcase the benefits of your medical billing services through engaging presentations or booth displays.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your medical billing business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your medical billing business could be: 

• Streamlined collection to get your practice paid fast
• Medical billing and coding designed for cardiology practices
• Lowest medical billing rates in town

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a medical billing business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in medical billing for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in medical billing. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a medical billing business include:

• Medical Billers and Coders – assist with medical billing and coding
• Sales Reps – call on medical practices, make sales
• Marketing Lead – create and implement marketing strategies
• General Manager – scheduling, accounting

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Medical Billing Business – Start Making Money!

If you’re experienced in medical billing, or if you want to learn, now’s a great time to get in on the action, as the industry is booming. You’d be providing an invaluable service while making a good living at the same time. Once you’re certified, you’d just need a computer and software and off you’ll go! 

You’ve now got some real business knowledge, so it’s time to start your entrepreneurial journey into medical billing. 

• Medical Billing Business FAQs

Medical billing can be quite profitable. The more you collect for your clients, the more you make. It is, however, a competitive industry and you need to be a good sales person to acquire clients.

Since so much is done digitally, you’re not limited by geography, so there’s really no limit to how much your business could grow. You’ll just need to grow your team of certified medical billers over time.

Medical billing companies provide billing and collection services for medical practices. They make a percentage of the monies collected, usually 7–10%.

You could start a medical billing business on a small scale as a side hustle. Your regular job would probably have to allow flexible hours to make sure you can handle billing issues as they arise.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Medical Billing Company Name
• Create a Medical Billing Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Medical Billing Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Medical Billing Business - Start Making Money!

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How to Start a Medical Billing Service?

The healthcare industry is experiencing continued growth each year, and one of the areas that are expanding rapidly is medical billing services. 

Medical billing companies process bills, insurance claims, and even clearinghouse services on behalf of patients and healthcare providers. This market was worth $5.8 billion in 2022 and is expected to grow to $13.9 billion by 2030 .

But how do you dip your toes in medical billing and open your own business? How do you set yourself up for success?

This comprehensive step-by-step guide has all you need to know. 

What is a Medical Billing Service?

Medical billing is the process that generates bills, insurance claims, and medical payments rendered by providers and healthcare organizations. This service ensures that the healthcare facilities will receive compensation for the services they rendered.  

They help healthcare facilities improve their revenue management . They can also increase cash flow and improve payment collection. 

Medical billing companies use medical and billing coding to process these payments. 

Understanding the Basics of Medical Billing: What You Need to Know

Before you learn how to start a medical billing service, you need to know the basics of what it does. 

Here are some basic terms you need to know:

Medical and Billing Codes

A specialized system has been created to translate medical processes, diagnoses, and treatments into codes. This is used by all healthcare facilities, insurers, and billers across the country. All stakeholders can easily translate their services to calculate the accurate payment. 

Insurance Claims

Healthcare facilities submit these claims to insurance companies to pay for services rendered to policyholders. 

Clearinghouse

This is a third-party service provider that processes claims for healthcare facilities.

Revenue Cycle

This is the management of billing and payment collection. It starts the moment the patient registers for an appointment. It continues until the patient and insurance company are sent a bill. 

Here are the basic steps to set up your business and what you need to consider for your operations:

Know the Market

You must be familiar with the medical billing market. It is a growing industry, and there is increasing demand for it. However, you need to explore the competition and coverage in your area. 

Look at healthcare facilities and organizations near you. They will be part of your target market. You must learn their pain points and needs. Your business must provide value to them.

You can also look at specific sub-sectors in the industry. The demand is also growing for billing services in:

• Dental billing
• Mental health billing
• Psychiatric billing

Get the Necessary Credentials for Your Business

You need basic permits and licenses to open a business. You must also get all certifications and permits required for your medical billing credentials. 

You need to know the processes and practices to manage the technology, coders, and insurance claims. Find and hire coders with the required training and certifications for medical billing. 

You can sign up for online courses and training programs. The American Medical Billing Association, the American Academy of Professional Coders , and the American Health Information Management Association have the necessary resources.

Create a Business Plan

Consider what kind of medical billing coding service you want to provide. Consider your target market and the logistics needed to complete your business plan. 

Include the structuring of your bank accounts, the taxation process, technology, and the number of staff you plan to take on. 

Consider the Start-Up Costs

Consider the capital investment you need to start a business in medical coding. You need to include the following in the capital planning:

• Medical billing software 
• Computer equipment 
• Technical support
• Staffing/coding personnel
• Commercial real estate

Get a Business License

You need to apply for a business license. Decide whether you want your business to be a limited liability company (LLC) or a corporation. 

You also need to get a tax registration and employer identification number (EIN).  

Develop a Marketing Strategy

Once you have a business plan and all the necessary permits, you can go full steam ahead.

You must develop a marketing strategy to make your target market aware of your business. You also need an acquisition strategy to onboard clients and sales marketing plans to push your services. 

Acquire Medical Billing Software

You need to choose medical billing software that will help make your operations more efficient and accurate. For example, ClaimGenix provides various features that are accessible and compatible with existing billing systems. 

Consider the following factors when choosing your software:

• Ease of use
• System compatibility and integration 
• Communication system
• Device compatibility and mobile choices

Partner With a Clearinghouse

You may need to work with a third-party clearinghouse. These companies can help with insurance companies and medical billers. They can help you with rejected claims and keep you updated with all your claim submissions. 

Build Your Network

Part of creating a medical billing services company is building a network of people connected to your target market and stakeholders. You can use social media accounts and industry organizations like the Healthcare Financial Management Association (HFMA) to expand your network. 

Marketing and Growing Your Medical Billing Business: Tips and Strategies

You can employ simple strategies to ensure your business will grow. After opening a medical billing company, you should do the following:

Keep Up With Technology

Technology is powering the growth of the medical billing industry. Business owners and managers must stay updated with the latest developments and improvements. These also include regulations and coding updates. 

You must invest in advanced technology and high-tech communication systems to streamline your business operations. You must maximize efficiency and productivity for sustained success. 

Research Your Competition

Research is the best way to learn about your niche, target market, and competition in your target area. Consider the services they offer, the technology they use, and the opportunities that remain open. 

Consider Niche Markets in the Medical Billing Industry

You could focus on medical billing services in one specific niche. When you limit your service scope, you can better target potential clients. 

Doing this gives your business specialized skills that other billing companies might not offer. 

Use Digital Marketing to Promote Awareness

Use digital marketing to make your target market aware of your services. You can use social media platforms like Facebook, LinkedIn, and Instagram to spread the word.

You can also create a pay-per-click campaign to use specific keywords to lead potential clients to your website. 

Get Referrals and Testimonials

Solicit honest reviews and testimonials from satisfied clients. They can leave ratings for your website, company, or app. Potential customers value the input and opinions of others like them. 

Collecting referrals can go a long way in growing your business. 

Use Email Marketing or Newsletters to Generate Leads

With email marketing, you can communicate directly with those in your contact list. Engage them with valuable content about your services. Encourage them to sign up for a trial or a starter plan to learn more about your company. 

You could also send newsletters to healthcare organizations, physicians, and other such parties to advertise your medical billing services. 

Start a Successful Medical Billing Service

Starting any business is hard. But when you know the process and know the kind of expertise you want to offer, you can easily start one after you’ve done the research and gathered the capital. 

The key to creating a medical billing service is knowing how to use the right technology for your specific needs. Medical billing software can improve revenue management , enhance cash flow, and monitor payments throughout the process.  

Armed with the expertise, knowledge, and the latest technology, you can open a medical billing company even with a small budget. As long as you have a business plan, you can slowly grow your enterprise and ensure its success. 

Partner with ClaimGenix for an immediate advantage and to get ahead of the competition.

Medical Billing Coding Business

What to consider when starting a medical coding billing business.

Starting a medical billing coding business requires wearing several hats. What to consider when starting a medical billing service business.

A medical billing service business requires being able to successfully wear a triad of hats:

• Medical billing and coding expert
• Business owner
• Marketing whiz

And if your like most people, this is in addition to all your other responsibilities: parent, spouse, employee, volunteer,…etc.

How much can you make operating a medical billing coding business? Well that’s really up to a persons drive, perseverance, and desire just like any other business. Some I know are satisfied serving a small practice and earning anywhere from $1000 to $2000 a month.

Of course this varies greatly depending on the client and practice. If you serve a semi-retired physician it would be on the lower end. If you serve a busy practice that sees 30 or more patients a day, it can be much higher.

I know people such as myself who have a few doctors, run their business from home, and make a comfortable income – from $1500 to more than $5000 a month is typical for a smaller medical billing coding businesses. There are others who have a nice office with several employees and make over six figures. As with any business, it’s pretty much what you make of it. But they all just started with a vision.

Master Medical Billing Coding I’ve used medical billing coding and medical billing interchangeably here but many prefer to concentrate strictly on billing and not take on coding. Or hire a medical coder to handle coding services. Even so you do need to have some familiarity with coding.

If you’re already knowledgeable in medical billing and coding, you have a great head start. If not take heart, there’s a lot of ways you can master medical billing without spending a ton of money or taking forever. That’s basically how I learned the craft – both billing and coding. Now I’m not going to say I’m an expert in medical coding, but I have learned enough to understand where to get the answers when I don’t know them. Many practices use the same diagnosis, treatment, and modifiers for a majority of their patients. So once you master the specialty coding, it becomes easier to interpret physician notes and identify coding issues.

A good start is a package of books and resources created by a mother/daughter team who operate a medical billing service. It’s called Medical Billing Home Business in A Box and includes several books on the basics of medical billing, getting a doctor, marketing strategies, etc. Their individual books are also available on our Medical Billing Books page.

A great comprehensive online course is offered by  Medical Billing Course.com  and can be completed at your own pace. It’s a great alternative for those who can’t invest the time and $$ in going to vocational or technical schools.

You can also get on-the-job training which is what I did. I worked out of my home for a medical billing coding business and learned all the ins-and-outs of billing and coding while getting paid. I guess you could consider this free medical billing training. But there’s probably no better way to learn than by doing!

Business Operations Business licenses, accounting, forming a corporation, planning, managing expenses, invoicing, hiring…. It’s all part of starting and running a medical billing service business.

Have a medical billing coding business plan – it doesn’t have to be anything elaborate. Just a realistic plan to reach your goal – whether it be $1500 a month or $10,000 a month. It should state what your business goal is, how you’re going to get there, how you’re going to do it, and associated time frames.

Here’s more detailed info on developing  a business plan  for your medical billing coding business.

If your goals are to grow, plan how you’ll manage the additional work. One thing I found as my medical billing coding business grew is that I had to get help. This meant hiring trustworthy people and delegating and managing the work as much as doing the work. When you own your own business, the buck stops on your desk – you can’t blame anyone else when something goes wrong.

You have to learn to delegate and prioritize as you grow. Sometime the business side of things is the hardest for me to grasp. I depend a lot on my accountant for help – she’s great. A good accountant can help you avoid a lot of headaches.

Marketing Yourself One thing I have learned is if you “know your stuff”, clients will find you out. That’s why it’s important to be knowledgeable on issues like HIPAA and health care reform. As dry as these type subjects may be, knowing how they effect medical billing and coding can really impress a client. And word of mouth can help a lot from there.

Take it for what it’s worth but these are products and services that I endorse because I believe in them and have used them. They are also endorsed by others in medical billing whom I trust. I’m not about to endorse and stake my reputation on something if I didn’t strongly believe in it.

Here’s more info on Marketing Your Business .

Market Via The Web I’ve discovered having a web site can be an income generator on it’s own just from ads, affiliates, etc. Not to mention the client leads. In my local city, our medical billing coding business is the first listing for medical billing coding businesses in the search results for “Medical Billing”. And that’s within less than 5 months of starting this site.  Here’s more info on how this site has grown and is starting to generate income .

I can’t say enough about SiteBuildIt – they have change the way I view using the web now.

Don’t Neglect Marketing Marketing is the life blood of your business. Even if you are satisfied with the size of your business, it’s still important to market your business and keep your name out there. Doctors retire, get sick, quit, move, die, – you name it. You can always count on change and turn over. One of my best clients closed his practice last year and went to work for someone else out of frustration of dealing with the hassles of running a practice.

Everyone may think doctors make a lot of money, but they also have a lot of expenses. And they are constantly getting squeezed by insurance payors, Medicare, etc. Sometimes the reimbursement from Medicare or Medicaid doesn’t even cover their costs. There are other doctors who just like to shake things up and change billing services every once in a while because someone comes along and offers them a better deal.

Check out the  Medical Billing Business Books  page for helpful books on marketing a billing business. 

More on Starting a Medical Billing Business Starting a medical billing business is one of the best ideas for a home based business. Find out the what it takes to start a successful and profitable business.

Home Medical Billing Office You don’t have to spend a fortune to Start a Medical Billing Home Business. 10 Money and Time Saving Tips when starting a medical billing and coding home business.

Return from Medical Billing Coding Business to Medical Billing Specialist

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How to Write a Business Plan for an Outpatient Medical Practice

Noah Parsons

16 min. read

Updated February 7, 2024

Free Download:  Sample Medical Practice Business Plan Template

So you’re thinking about starting your own outpatient medical practice.

You probably have many good reasons to open a private practice. Private practices can be lucrative, although it requires you to spend time building relationships with patients while also attending to all business processes that are part of running your practice .

Maybe you want more autonomy over your practice and your workflow. Or maybe you hope to expand your services to underserved areas or specific populations based on your expertise.

If you’re thinking about starting an outpatient medical practice, one of the first things you should do is write a business plan. Even if you’re able to self-fund your practice and don’t need outside investment, your business plan is a great tool for thinking through all the different aspects of building a profitable and sustainable practice.

You should go into this thinking about your business plan as a living document, not something you do once and then file away forever. Use it as a tool, especially around your financials. Revisit and update it regularly by comparing your forecasts to your actuals and adjusting as necessary.

To help you get started, you can download our free business plan template . If you’ve never written a business plan before, Bplans also offers a library of sample medical business plans that you can review or even download to use as a model.

• Executive summary

The first section that will appear in your business plan is the executive summary . But before you dive right in, it’s the section of your plan that you should actually write last. It’s a summary and an overview of your outpatient medical practice and your plans, so it will be easy to put together after you’ve written the rest of your plan.  

Executive summaries are short—keep it to one to two pages. Keep in mind that if you’re using your plan to get funding, investors and banks tend to read your executive summary to get a sense of whether to read on and consider your request. Do not neglect it; just write it last.

Your executive summary will include the following sections:

• Who you are: Your business name, location, and contact information.  
• What you offer and the problem your business solves: What does your practice offer and why is it needed? This is your value proposition .
• Target market: Who is your ideal patient? Do they self-pay or use insurance? Be specific.
• Competition: Who else is offering similar services?
• Team: Who is on your management team?
• Financial summary: Explain your business model, startup costs, revenues, and liabilities to the company. Mention your funding needs.
• Milestones and traction: How have you validated that there’s a need for your practice in your location?

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Now that you’re familiar with what’s included in your executive summary, tuck that information away, and get to work on the rest of your plan.

Think of the next few sections of your plan as the overarching description of your practice’s business opportunity. You’ll cover the problem you’ve identified and the solution that your practice offers. Then you’ll think through your ideal customer , your competition , and your opportunities for growth . This section area should describe the services you provide and how they benefit your patients.

• Problem and solution

First, describe the problem that you’ve identified and how your practice solves that problem. Here’s a brief example:

The problem : There is a lack of affordable pediatric and gynecological care available in coastal areas of Lane County, Oregon. Many patients have to travel miles to the closest practice.  

The solution : Dr. Gardner plans to open Ocean Lane Outpatient Care to serve smaller Oregon coastal communities scattered outside of major towns with major hospitals. Due to her focus on pediatric and gynecological care, Dr. Gardner’s particular services are especially valuable in this location due to the lack of available service providers in the area. Dr. Gardner’s practice will accept private insurance and Medicaid, as well as a sliding scale for patients in a certain income bracket.   

The services section identifies what kind of medical practice you are opening. Restate who your practice serves and what kind of services you specialize in. Talk about how your practice approaches treatment and what goals you have in addition to providing quality care. Here’s an example from a sample business plan for a medical practice.

Include a breakdown of all services furnished by the clinic, being as granular as possible. For example:

Gynecology:

• Annual women’s wellness exam

Pediatrics:

• Immunizations
• Youth eating disorder treatment
• Target market

Next, talk about your ideal patients. If you’re in the earliest stages, you’ll want to do some research that verifies your hypotheses.

For example, Dr. Gardner would have needed to verify her assumption that people in coastal towns in Oregon are in need of pediatric and gynecological services—a need that isn’t currently satisfied by available resources.

A formal market analysis can help verify that there’s a need for your particular practice in your intended location.  

Your target market section should include:

• TAM, SAM, and SOM: Total Available Market (TAM), Segment of the Available Market (SAM), Share of the Market (SOM). Here, you are looking at the difference between targeting everyone: TAM (all people who need medical care—so all humans in your area), versus your ideal clients: SAM (maybe this is those with certain insurance or ability to self-pay), versus the number of new patients you think you can realistically reach: SOM, especially within your first few years. The idea is that not everyone will be an ideal patient. It matters because you can waste a lot of money with marketing outreach to everyone, instead of targeting a specific population that is more likely to be looking for your services.
• Buyer persona : Imagine there’s one specific patient who represents your ideal patient. Be specific. Maybe she’s 34 years old, has private insurance, is relatively healthy, but needs more regular medical care and advice.  
• Competition and competition matrix : List competitors and analyze what makes them competitive. For instance, your competitors might be large hospitals because of the wide range of services they offer. You might also be competing with local chiropractors or other alternative medicine practices that already have a foothold in local communities.
• Future products and services : Name the products/services you will offer as your practice grows and earns more money and as your patients develop new needs. Maybe you will want to open a second location when you gain enough patients. Or maybe you will want to extend your practice’s hours of operation.

Ideal patient profile

Your ideal patient profile identifies the type of patient whom you hope to attract and retain. To clarify, this does not mean you only serve your ideal patient type. Rather, focusing your outreach efforts on attracting your ideal patient will allow you to grow your practice more effectively than targeting a large number of patients who may or may not be in the market for your practice’s specialty.

When developing your ideal patient profile, consider:

• Who you enjoy working with
• Who needs the services you provide
• Who can and will pay your pricing (or have an insurance plan that you want to accept)

For instance, because Dr. Gardner specializes in preventive and curative care, a patient seeking palliative treatment for terminal cancer is not the ideal patient. This patient would not receive the best care for their needs from Dr. Gardner’s services.

Acquiring a new patient is six to seven times more expensive than retaining a current patient. In order to support and retain current patients, develop a strategy to proactively meet their needs and set benchmarks to measure the success of your strategy.

• Execution: How your practice will respond to the opportunity

First, your business plan laid out the opportunity at hand. Now, the rest of your plan will focus on how to take advantage of that opportunity. Now is the time to lay out what you’ll do to attract patients and set up a viable business model with healthy financials.

Components of this section include:

• Your marketing and sales plan
• Strategic partnerships or alliances
• Your operations plan
• Your team and company information
• Financial plan
• Milestones and metrics that you’ll need to hit to be viable
• Your key assumptions and risks
• Your funding ask and exit strategy, if applicable
• Marketing and sales plan

The marketing and sales component of your plan should include how you plan to reach the patients in your target market, how you’ll bill for your services, and what you need to do to bring in the right number and type of patients.

• Positioning : Describe how you will present your company to your customers with your positioning statement . Think about answering these questions: What are you offering your patients that they can’t get elsewhere? Why should they pick you instead of another practice? Where do you see yourself in the competitive landscape? Use this model to help:

“For [target market description] who [target market need], [how our business offering meets the need]. Unlike [key competition], it [most distinguishing feature].”

For [coastal community members] who [require gynecological care], Ocean Lane Outpatient Care [provides both pediatric and women’s health services]. Unlike [other area medical practices], Ocean Lane Outpatient Care is [conveniently located near the communities it serves and can fill the gap between pure pediatric care and full-blown adult care for young women].

• Pricing and billing : Medical pricing is complex, especially if you plan to work with insurance companies. Practice Builders says that “a 10 percent increase in pricing can result in a much better return than a 10 percent reduction in costs—or even a 10 percent increase in patient volume.”

Make sure you price your services at what they are worth and explain your pricing to your patients. Consider the demographics your practice serves when you choose your pricing. Research other practices in the area and learn more   about how you can choose the best prices for your patients and your practice.Also, consider how you will get patients to keep coming back to your practice. Sometimes you can increase sales by upselling and cross-selling , or offering complementary services.

If you accept insurance, the contracts you set up with insurance companies for reimbursement will probably dictate your pricing, so this is a good place to talk about your negotiation strategy as well.

• Update your website and social media frequently and ensure your website is mobile-friendly and share-friendly with credible links added.
• Make sure all communications with and about patients are HIPAA-compliant . Download a HIPAA Compliance Guide to ensure you are following regulations.
• Maintain a positive online reputation for your practice as a key management technique. You can do this by claiming your profile on any third-party sites that list it. Encourage your patients to review you online, too.
• Strategic alliances : List any people or organizations with whom you are working. You will most likely need to partner with a regional lab for medical testing. Opening an on-site lab can be costly for a smaller practice. You will most likely need to partner with a nearby hospital as part of a referral system or to share select services and equipment.

The operations section of your business plan covers how your business works, from the logistics to the technology.

• Technology: Describe how your technology works, but do not go into too much detail. Investors can ask for more information if they want to. Will you rent or buy equipment ? The technology you need ranges from simple items like thermometers to more complex items like centrifuges.
• Billing and information storage: Provide a brief overview of how you will manage information technology and patient records to promote safety, efficiency, and compliance with HIPPA  regulations and industry standards. Explain your usage of Electronic Medical Record (EMR) software in this section.
• Payment types you accept: Consider payment types such as private pay, private insurance, Medicaid/Medicare, etc. What kind of referrals can you offer to the uninsured or those who cannot afford your services?
• Milestones and metrics

In this part of your plan, you set measurable, achievable milestones, such as the number of new patients added per month in the first year of operations. Milestones can be about any aspect of your medical practice as long as they emphasize growth. For metrics , decide which numbers to check regularly to track your company’s health. This area should also include information about traction (past successes) and risks:

• Traction: Look back at major milestones you have achieved. Hopefully, they demonstrate that your business model works and that you are filling a need for your market. If you’re looking to attract private funders, this section is important since it shows your initial success .
• Key assumptions and risks : Acknowledge the assumptions you are basing your business on. Set out to prove them right if you can. Also, discuss risks so that investors know you have considered what could go wrong and that you have a plan for dealing with challenges. Malpractice suits and changing healthcare regulations are risks specific to the healthcare field. Malpractice insurance is a must for addressing the former. Changing healthcare regulations can affect the volume of patients who are able to afford your services.

Your team can be more important than your product or service. Describe your team here, even if it is just you and a receptionist who answers the phone in your office building.

• Management team and qualifications: Address who works for you, what do they do, and how much you pay them. Compile the details of their relevant experience and education.
• Hiring plans : Outline who, if anyone, you need to hire to fill skills gaps in your management team and how much you plan to pay them.
• Company overview

The company overview tells about who you and your staff are and appeals to potential investors. Keep it short—it should be the shortest chapter of your business plan but is still very important.

It needs to include these elements:

• Mission statement : Your mission statement articulates your goals for what your company does for its customers, employees, and owners. It will read something like this: “Our mission is to provide X (services) for Y (customers) by Z (methods).” For instance, Ocean Lane Outpatient Care is dedicated to providing quality care for all the inhabitants of coastal Lane County by providing affordable and versatile services.”
• Intellectual property : List any patents you have or have pending, and mention any core technology you are licensing from another company.
• Legal structure and ownership : Explain your business structure and who owns how much of it. More on considerations for physicians and legal structure here.
• Business location : Describe the company’s location and any facilities it owns.
• Company history if it’s an existing company

Having a solid financial plan is critical, whether you’re seeking funding or not.  A typical financial plan includes projections by month for the first year and annual projection for the next three to five.

Include these key elements:

• Profit and loss statement : this explains how your business made a profit or incurred a loss in a given amount of time (typically three months) by listing all revenue and expenses, then documenting the total amount of net profit or loss.
• Cash flow statement: documentation of how much cash the business brought in, how much it paid out, and the amount of its ending cash balance (on a monthly basis).
• Balance sheet : snapshots how your company is performing at a given moment by including how much money you have in the bank, how much your customers owe you, and how much you owe your vendors.
• Sales forecast : projections of what you think you will sell in a given timeframe (one to three years).
• Business ratios : Comparisons of your company’s financials with numbers from the industry profile.
• Keep it brief. For example, Dr. Gardner will employ administrative aides and nurses.
• Use of funds : Needed if you’re seeking investment or a loan. This section explains how you will use investors’ money.
• Exit strategy : You only need this if you’re seeking outside investment. An exit strategy is a method by which entrepreneurs and investors, especially those that have invested large sums of money, transfer ownership of their business to a third party to recoup money invested in the business. Common exit strategies include being acquired by another company, the sale of equity, or a management or employee buyout.

When writing your financial plan, make sure to consider startup costs . For a medical practice, average startup costs can include initial fees, malpractice insurance, cost of renting or leasing office space, and the cost of any legal or tax advisors.

Consider submitting your plan to at least five to 10 banks if you need help financing your startup costs. Many banks have divisions designated to providing loans to new dental and medical practices , so submit your plan to that division if you can. Startup costs can be high in the medical field, so make sure not to underestimate them.

Finally, your appendix is the holder for any supporting information such as charts, images, graphs, and more. If you need to include large sets of data or pages of information, put it here. That way, it is available but does not distract from the plan’s most important pieces.

For instance, you can expand on your personnel plan with charts of each employee’s annual insurance costs. You can also include versions of your profit and loss statements and other financials that extend further into the future.

Don’t forget to go back to your executive summary! Remember to keep it brief and write it based on what you have written already.

When you’re ready to write your business plan, there are an array of resources available to you. Download our free business startup checklist to think about the next steps. Also, check out our free business plan template . Reviewing sample business plans in the medical field can help you get a better sense of the process and information you’ll provide. Downloading this plan for a family medicine clinic will probably be most helpful if you’re setting up a primary care practice.

Remember that this plan is a living document. Schedule a regular business plan review meeting. You should review your trajectory and compare your financial projections to your actuals frequently to keep your practice on track.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Position your practice’s business opportunity

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Medical Billing Business Plan Template

Document description.

This medical billing business plan template has 34 pages and is a MS Word file type listed under our business plan kit documents.

Sample of our medical billing business plan template:

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3,000+ templates & tools to help you start, run & grow your business, all the templates you need to plan, start, organize, manage, finance & grow your business, in one place., templates and tools to manage every aspect of your business., 8 business management modules, in 1 place., document types included.

Medical Device Business Plan Template

Written by Dave Lavinsky

Medical Device 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 device companies.

If you’re unfamiliar with creating a medical device 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 device 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 device 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 device business or grow your existing medical device company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your medical device business to improve your chances of success. Your medical device business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Medical Device Businesses

With regards to funding, the main sources of funding for a medical device 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 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 device companies.

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How to write a business plan for a medical device business.

If you want to start a medical device business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your medical device business plan.

Executive Summary

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 device business you are running and the status. For example, are you a startup, do you have a medical device business that you would like to grow, or are you operating an established medical device business that you would like to sell?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the medical device industry.
• Discuss the type of medical device 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.

Company Overview

In your company overview, you will detail the type of medical device business you are operating.

For example, you might specialize in one of the following types of medical device businesses:

• Class 1 medical device: This type of medical device is one that poses low risk to end-users and does not have too many regulatory controls. Stethoscopes and tongue depressors are some examples of Class 1 medical devices.
• Class 2 medical device: This type of medical device could pose higher risk to end-users than Class 1, thus requiring the company to submit a Premarket Notification 510(k) form to the FDA before the product can be sold. Examples of Class 2 medical devices include catheters and surgical tools.
• Class 3 medical device: This type of medical device poses more of a risk to the end-user than Class 1 or Class 2 devices. For this reason, companies selling Class 3 devices must go through a more stringent FDA approval before the product can be sold. Examples of Class 3 devices include cochlear implants and pacemakers.

In addition to explaining the type of medical device 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 customers served, the number of products sold, or reaching $X amount in revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the medical device industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the medical device 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 device business plan:

• How big is the medical device 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 device 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.

Customer Analysis

The customer analysis section of your medical device 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 device 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.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other medical device businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes alternative medical devices and other types of medical device retailers. You need to mention such competition as well.

For each such 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 device 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 make it easier for customers to acquire your product?
• 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.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a medical device business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of medical device company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide surgical instruments, implants, or test kits?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products you offer and their prices.

Place : Place refers to the site of your medical device company. Document where your company is situated and mention how the site will impact your success. For example, is your medical device business located in a busy retail district, a business district, a standalone building, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your medical device 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

Operations Plan

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 device business, including answering calls, meeting with potential customers, scheduling shipments, billing customers and collecting payments, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your medical device business to a new city.  

Management Team

To demonstrate your medical device 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 device 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 device business.  

Financial Plan

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 sheet, and cash flow statements.

Income Statement

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 keep 300 devices on-hand and will sell and restock your inventory every 3 months? 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

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 device 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 device 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 business location lease or a list of medical devices in your inventory.  

Writing a business plan for your medical device 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 device 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 device business.  

Medical Device Business Plan FAQs

What is the easiest way to complete my medical device business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your medical device business plan.

Where Can I Download a Medical Device Business Plan PDF?

You can download our medical device business plan PDF here. This is a business plan template you can use in PDF format.

How Do You Start a Medical Device Business?

Starting a medical device business is easy with these 14 steps:

• Choose the Name for Your Medical Device Business
• Create Your Medical Device Business Plan
• Choose the Legal Structure for Your Medical Device Business
• Secure Startup Funding for Medical Device Business (If Needed)
• Secure a Location for Your Business
• Register Your Medical Device 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 Device Business
• Buy or Lease the Right Medical Device Business Equipment
• Develop Your Medical Device Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Medical Device Business
• Open for Business

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Coming Up with a Home Business Plan for Medical Coding

As the healthcare industry continues to grow at a rapid pace, more doctors and medical facilities are outsourcing billing services to at-home medical coding professionals. If you’re looking for an in-demand at-home job that allows you to take part in the booming healthcare sector, consider becoming a medical coder. Keep reading for tips for getting your medical billing and coding NYC business up and running.

• Choose a Specialty

The medical billing industry offers many options. You could choose to work for a nursing home, a cardiologist office, or even a family/general practitioner. Before starting your home-based medical coding business, you’ll want to choose a medical area of focus. Think about any previous experience or awareness you have a specific area in the medical industry. Choosing to work in a field that you’re knowledgeable about can help you determine where to find your first client.

The area of focus you choose will also influence your volume of work. If you’re looking for a high volume of work, you’ll want to work with doctors who generally have smaller copays. For a steady flow of coding and billing work, choose these areas:

• Family practitioner
• General practitioner
• Nursing homes

As a new business owner, you want a steady volume of work, but don’t overload yourself. Otherwise, your speed and accuracy could be impacted.

• Use the Right Software

You’ll, of course, need a reliable computer, as well as a high-speed internet connection to be successful as a medical billing and coding specialist, but you’ll also need billing software. Some software can be hundreds of dollars, so you’ll want to choose wisely. Read reviews of program options, as well as the available features. Remember, this will be one of your biggest upfront costs and will drive your business’s success, so choose wisely!

• Get Training & Experience

Before you can sell your services as a medical coder, you’ll want to ensure you have the necessary training and experience. There are all sorts of medical billing and coding classes in NYC that allow you to learn the skills needed to excel as a medical coder. It may also be useful to take a part-time job in a medical office so that you can gain hands-on experience. Having worked in a medical environment will give you the one-up on your competition.

Trusted Medical Billing & Coding Education

Looking to earn your medical billing and coding certification NYC before starting your business? If so, look no further than ABC Training Center. Our facility is licensed by the New York State Department of Education so you can assure you’re getting the latest and greatest training. We offer morning and evening classes that teach everything you need to know to be successful in the industry. Once you’ve completed training, we also assist with job placement to ensure you’re able to kickstart your career.

Get started today by calling our office at (718) 618 5589. We look forward to helping become successful in the medical industry.