ClaimTek - Medical Billing (800) 224-7450

Detailed Income Calculator

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Service pricing method:
Medical billers usually choose one method of pricing their services: a percentage of all fees collected or a flat fee. The flat fee may be $2.00-$10.00 per claim and $2.00 - $3.00 per patient statement. The percentage method may range from 3% to 12% of all fees collected, with an average of 7% or 8%.

Number of doctors:
Many billing services have between 1 and 7 doctors, but some grow to manage larger operations with many providers. We recommend that you remain conservative in your estimates. You might project 0 or 1 provider in Q1 & Q2, then increase your clients in Q3 and Q4; then do a projection for your ultimate goal.

Average monthly claims per doctor:
Chiropractors and many specialists (e.g., internal medicine, pediatric, dermatology) may see several hundred patients per month while surgeons may see around 100. Use an average for each quarter. Tip: this is an average per doctor per month, so it will not fluctuate greatly per quarter (except if you intend to steer your business toward lower or higher volume specialists).

Percentage collected:
This can range from 3% for high value claims to 12% for standard claims, with an average of 7-8%. It can go higher if you are collecting on old unpaid claims. Tip: Your percentage can increase as you build your business and offer more services.

Average dollar amount for each claim :
Claim values will vary, depending on medical specialty, number of services performed, approved insurance rates, and other factors. Commonly, you may collect an average of $50 to $300 per claim from the insurer and patient. Some claims can reach as high as $1000 or $5000 if you are billing for specialists. Use an average here. Tip: Your average dollar amount might increase as you build your business or bill for higher claim value providers.

Gross Monthly Income:
This is your estimated average gross monthly income for each month in that quarter. For your Goal, it represents the average monthly income over one year.

Monthly Marketing Expense:
This will fluctuate over time. In the early phases of your business, you might estimate higher amounts ($250 - $500 or more) per month for postage, promotional items, ads, meals, etc. As your business grows, your marketing costs should stabilize or decrease. Remember that ClaimTek provides you with many marketing and advertising items, reducing your marketing expenses.

Administrative Expense:
This includes your business and cell phones, office supplies, answering service if you use one, and other general office expenses. These expenses might increase proportionately over time as you get more clients. If you grow your business, you’ll need to account for employee payroll, business insurance, more computers…etc.

Clearinghouse Expense:
Your monthly clearinghouse fees are either fixed or proportional to the number of claims filed. Enter $50-$75 per provider if you intend to use a fixed monthly fee, or use 35 cents per claim.

Total Monthly Expenses
This is your estimated average monthly expense for each month in that quarter. For your Goal, it represents the average monthly expense over one year.

Projected Net Monthly Income:
This total shows your net monthly income, which is equal to your Gross Monthly Income minus your monthly expenses.

Projected Cash Flow:
This total shows you accumulated cash flow on a quarterly basis. Your cash flow is the sum of your net monthly incomes added together. The last amount is the same as your projected annual income in Year 1.

Projected Yearly Income:
This total projects your estimated annual income in Year 1 and also your estimated annual income for your Goal.

To Use The Detailed Income Calculator:

  1. Choose the method of pricing you will use in your business: flat fee or percentage.
  2. Then for both Projected Revenues and Expenses, fill in the quarterly grid using estimated monthly average for Q1, Q2, Q3, and Q4. In the fifth box in each row, fill in your estimated monthly average reflecting your Goals. (Use the Tab key to move quickly through the fields.)
  3. Upon completion, you will see the following estimated totals:
    • Projected monthly income in each quarter
    • Accumulated cash flow over 4 quarters (1 year)
    • Projected annual income over 4 quarters (1 year)
    • Projected annual income based on your goal.
     
   Service pricing method [choose one]:     
   Years to reach your goal:
Q1 Q2 Q3 Q4 Goal Help
Projected Revenue
   Number of doctors:
   Average monthly claims per doctor:
   
   
   Projected Monthly Gross Income:
Projected Expenses
   Marketing expense per month:
   Administrative expense per month:
   Clearinghouse expense per month:
   Projected Monthly Total Expenses:
Totals
   Projected monthly net income:
   Projected quarterly cash flow:
   Projected yearly income: