Are you about starting a medical billing and coding company? If YES, here is a complete sample medical billing and coding business plan template & feasibility report you can use for FREE.
Medical billing and coding business owners process and administer medical insurance policies and claims. They help doctors and other healthcare providers collect payments from insurance companies and Medicare. Starting a medical billing and coding business is not too expensive except for the money required to rent, furnish an office space and purchase the applicable software apps.
Running this type of business requires that you should be trained and it is indeed a very lucrative business in the United States, Canada, Australia and the United Kingdom because of the desire for continuous engagement between clients and key stakeholders in the healthcare industry.
A Sample Medical Billing and Coding Business Plan Template
1. Industry Overview
A report published by IBISWorld shows that the medical billing industry is worth $3 billion annually with an 8.8 percent growth between a five – year period (2011 to 2016). There are more than 2,300 medical billing businesses in the united states of America employing over 7,000 people.
The industry is valued that high due to the rising demand for medical billing services which has led to more operators entering into the industry. Demand in this industry has risen due to the growing population of the baby boomers who require medical billing services after visits to the doctors.
Over the next five years (2016 to 2022), the industry is predicted to experience steady growth as there will be more senior citizens who will make their demands via Medicare.
Also within this period, the number of people with insurance is expected to rise in line with healthcare reforms which will then allow those with pre-existing conditions to be able to receive insurance. This growing demand will help the industry not only have huge demands which will be taken care of by operators but this will also boost revenue for the industry.
It should be noted however that regardless of the huge demands experienced in this industry, the market share concentration is still quite low especially as only one operator accounts for more than 14 percent of the total industry revenue, while the remaining operators in the industry generate less than 5 percent each in revenue for the industry.
Most of the operators in this industry operate on a large scale and therefore provide a variety of services such as claims adjustment, risk and consulting. According to IBISWorld, the largest player in the industry caused market share concentration to increase with its acquisition streak and a growing pace that has outpaced industry’s growth.
A recent researched published by Grand View Research, Inc. in 2015, shows that the medical billing outsourcing market was worth over $6 billion and has been predicted to reach $17 billion by 2024.
This is largely due to the fact that medical billing has become an intricate part of medical practice, especially as there have been several challenges from in-house billing processes especially with untrained staff, lack of proper financial policy, improper IT structure, as well as billing errors.
These challenges are why most hospitals and doctors’ offices prefer to outsource their medical billing processes; 95 percent of most independent physicians have stated that they prefer outsourcing their medical billing processes to running one in house.
Globally, North America has the highest revenue growth in this industry. The United States has had rapid changes in its healthcare structure and with rising healthcare costs have been the major driver in the North American region. In the industry, consolidation has been one of the major factors helping the growth of the market.
Hospitals are one of the largest clients of medical billing companies and provide the highest revenue especially with the rising healthcare costs which has caused profits to decline for hospitals and which has seen them turning to medical billing businesses to help them manage their revenue.
The medical billing market is segmented into in-house and outsourced billing according to Grand View Research, Inc. As at 2014, the total costs that were incurred by providers for in-house operations amounted to $252 billion. These costs were inclusive of running costs such as IT costs and maintenance cost for in-house billing team as well as administrative team.
This is in comparison to outsourcing which saw a significant reduction in costs for hospitals including fewer errors. Also, outsourcing meant that doctors and physicians could now concentrate on their primary duty which is to provide the best possible care to patients without having to worry about managing billings and recovering claims.
Even though hospitals had the highest market share as at 2015, the positive trend was held in check by increasing demands for medical billing outsourcing services by physician offices and private clinics. However, hospitals are still expected to lead in generating the highest revenue for this industry as they had more claim volumes compared to independent physicians and private clinics.
Globally, the medical billing outsourcing market is broken down into North America, Europe, Asia Pacific, Latin America as well as the Middle East Africa, with North America providing the most revenue for the market.
2. Executive Summary
Jeff Cole® Medical Billing and Coding Company, Inc. is a registered and licensed healthcare consulting firm that specializes in medical billing and coding services. The business will be based in Saint Paul – Minnesota and we have been able to secure a standard office facility.
We are aware that to run a standard medical billing and coding business can be demanding which is why we are well trained, certified and equipped to perform excellently well in our chosen line of business.
Jeff Cole® Medical Billing & Coding Company, Inc. is a client – focused and result driven medical billing and coding services firm that provides broad – based services at an affordable fee that won’t in any way put a hole in the pocket of our clients. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they hire our services.
At Jeff Cole® Medical Billing & Coding Company, Inc., our client’s best interest would always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hire professionals who are well experienced in the medical billing and coding services industry.
Jeff Cole® Medical Billing & Coding Company, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Our plan is to position the business to become the leading brand in the medical billing and coding services line of business in the whole of Saint Paul – Minnesota, and also to be amongst the top 10 medical billing and coding services businesses in the United States of America within the first 10 years of operation.
We are optimistic that this will surely be realized because we have done our research and feasibility studies and we are enthusiastic and confident that Saint Paul – Minnesota is the right place to launch our medical billing and coding services business before sourcing for clients from other cities in The United States of America.
Jeff Cole® Medical Billing & Coding Company, Inc. is founded by Jeff Cole. Jeff Cole has over 15 years of experience working at various capacities within the healthcare services industry in the United States of America. Mr. Jeff Cole graduated from both Minnesota State University with a Degree in Accounting, and Yale University and he is a chartered accountant with background in medical billing and coding.
3. Our Products and Services
Jeff Cole® Medical Billing & Coding Company, Inc. is in the medical billing and coding services industry to service a wide range of clients and of course to make profit, which is why we will go all the way to ensure we follow international best practices when executing our jobs. Our service offerings are listed below;
- Medical insurance claims submissions
- Medical insurance billing and coding
- Medical insurance claims adjustment
- Back-office, administrative support and consulting
- Claims processing
4. Our Mission and Vision Statement
- Our vision is to become the number one choice as far as medical billing and coding is concerned in the United States of America.
- Our mission is to establish a world – class medical billing and coding company that will become a standard for running medical billing and coding business not just in the United States of America, but also other parts of the world.
Our Business Structure
Ordinarily we would have settled for two or three staff members, but as part of our plan to build a standard medical billing and coding company in Saint Paul – Minnesota, we have perfected plans to get it right from the beginning which is why we are going the extra mile to ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.
The picture of the kind of medical billing and coding business we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands available in and around Saint Paul – Minnesota as long as they are willing and ready to work with us to achieve our business goals and objectives.
We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer
- Billing and Coding Administrator (Consultant)
- Admin and HR Manager
- Marketing and Sales Executive
- Accountant
- Customer Care Executive/Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Office:
- Upturns management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Generates, interconnects, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Medical Billing and Coding Administrator (Consultant)
- Responsible for handling medical insurance claims submissions
- In charge of medical insurance billing and coding
- In charge of medical insurance claims adjustment
- Handles back-office, administrative support and consulting
- Controls claims processing
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations
- Oversees the smooth running of the daily office activities
Marketing and Sales Executive
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of relevant projects
- Writes winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Accountant
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- create reports from the information concerning the financial transactions recorded by the bookkeeper
- Prepares the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risk analysis
- Performs cash management, general ledger accounting, and financial reporting for one or more properties
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Client Service Executive/Front Desk Officer
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels / documents for the company
- Distribute mails in the organization
- Handles any other duties as assigned by the line manager
6. SWOT Analysis
Jeff Cole® Medical Billing & Coding Company, Inc. is in business to become one of the leading medical billing and coding companies in the United States of America and we are fully aware that it will take the right business concept, management and organizational structure to achieve our goal.
We are quite aware that there are several medical billing and coding companies all over the United States of America and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well equipped to confront our threats.
Jeff Cole® Medical Billing & Coding Company, Inc. employed the services of an expert HR and Business Analyst with bias in consulting to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Jeff Cole® Medical Billing & Coding Company, Inc.
- Strength:
Our strength lies in the power of our team. We have a team that can go all the way to give our clients value for their money; a team that is trained and equipped to pay attention to details and to deliver excellent medical billing and coding jobs. Aside from the synergy that exists in our carefully selected workforce, we have a very strong online presence, we are well positioned and we know we will attract loads of clients from the first day we open our doors for business.
- Weakness:
As a new medical billing and coding company, it might take some time for our organization to break into the market and gain acceptance especially from corporate clients in the already saturated medical billing and coding services industry; that is perhaps our major weakness. So also, we may not have the required cash to give our business the kind of publicity we would have loved to.
- Opportunities:
The opportunities in the medical billing and coding services industry is massive considering the number of hospitals and medical insurance related businesses who can’t do without the services of medical billing and coding service providers.
As a matter of fact, rising demand for medical claims processing services has attracted new entrants to the industry and growth in the senior population will boost the number of doctors’ visits, spurring demand for the services of medical billing and coding. As a standard medical billing and coding business, we are ready to take advantage of any opportunity that comes our way.
- Threat:
Some of the threats that we are likely going to face as a medical billing and coding business operating in the United States are unfavorable government policies, the arrival of a competitor within our location of operation and global economic downturn. There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
Experts project that the trend in the medical billing and coding industry will experience steady growth over the next five years, as the growing senior population creates demand via Medicare. Also, the number of insured people will rise in line with healthcare reforms, as people with pre-existing conditions are able to receive insurance.
The growing senior population will keep driving demand for the industry’s services over the next five years, helping revenue blossom for medical billing and coding companies.
Another notable trend in the medical billing and coding services industry is that operators have cut employment to retain margins. Meanwhile, capital investments have accounted for a rising portion of revenue as technological advancements have been adopted to streamline operations and increase efficiency.
8. Our Target Market
We have positioned our medical billing and coding company to service businesses in the healthcare industry and the medical insurance industry in and around Saint Paul – Minnesota and all over key cities in the United States of America.
We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to service the following customers;
- Hospitals
- Independent Physicians
- Health centers
- Medical laboratories
- Medical insurance companies
- Private clinics
Our competitive advantage
Jeff Cole® Medical Billing & Coding Company, Inc. is launching a standard medical billing and coding company that will indeed become the preferred choice for hospitals and other healthcare facilities in the United States of America.
One thing is certain; we will ensure that we offer a wide range of medical billing and coding related services that are in high demand in the healthcare industry. We will also go all the way to ensure that we give out discount as at when due and deliver excellent services devoid of errors.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Jeff Cole® Medical Billing & Coding Company, Inc. is in business to offer a wide range of medical billing and coding related services and also to
- Medical insurance claims submissions
- Medical insurance billing and coding
- Medical insurance claims adjustment
- Back-office, administrative support and consulting
- Claims processing
10. Sales Forecast
We have put plans in place that will help us always attract customers that will translate to increased revenue generation for the business.
We are well positioned to take on the available market in the United States of America and we are quite optimistic that we will meet our target of generating enough income from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the medical billing and coding services industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Saint Paul – Minnesota.
- First Fiscal Year: $250,000
- Second Fiscal Year: $500,000
- Third Fiscal Year: $950,000
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location for Jeff Cole® Medical Billing & Coding Company, Inc. we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for hospitals and medical insurance companies in and around Saint Paul – Minnesota. We have detailed information and data that we were able to utilize to attract the number of customer we want.
We hired experts who have good understanding of the medical billing and coding industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the United States of America.
In summary, Jeff Cole® Medical Billing & Coding Company, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters alongside our brochure to hospitals, dental clinics, optical centers and key stakeholders in the United States of America
- Make use of attractive hand bills to create awareness and market our services
- Position our signage/flexi banners at strategic places around Saint Paul – Minnesota
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage on roadshows within targeted neighborhood to create awareness for our services
- List our business and products on yellow pages ad (local directories)
- Leverage on the internet to promote our business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
- Join local chambers of commerce and industries to network and market our products
11. Publicity and Advertising Strategy
Despite the fact that our office is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our company. We have been able to work with our publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the hearts of our target market.
We are set to take the medical billing and coding services industry by storm which is why we have made provisions for effective publicity and advertisement of our company. Here are the platforms we intend leveraging on to promote and advertise Jeff Cole® Medical Billing & Coding Company, Inc.;
- Place adverts on community based newspapers, radio and TV stations
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business
- Ensure that our we position our banners and billboards in strategic positions all around Saint Paul – Minnesota
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Contact hospitals, dental clinics, optical center, medical laboratories, medical insurance companies and other health facilities by calling them up and informing them of Jeff Cole® Medical Billing & Coding Company, Inc.
- Advertise our business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and vans and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals
12. Our Pricing Strategy
Hourly billing for consulting related services is a long – time tradition in the industry. However, for some types of medical billing and coding services, flat fees make more sense because they allow clients to better predict consultancy costs.
As a result of this, Jeff Cole® Medical Billing & Coding Company, Inc. will charge our clients a flat fee for many basic services. At Jeff Cole® Medical Billing & Coding Company, Inc. we will keep our fees below the average market rate by keeping our overhead low and by collecting payment in advance.
In addition, we will also offer special discounted rates to startups. We are aware that some clients would need regular access to medical billing and coding consultancy and advisory services, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.
- Payment Options
The payment policy adopted by Jeff Cole® Medical Billing & Coding Company, Inc. is all inclusive and we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Jeff Cole® Medical Billing & Coding Company, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for all our services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a medical device development and manufacturing business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our startup capital on;
- The total fee for registering the business in the United States of America – $750
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
- Marketing promotion expenses for the grand opening of Jeff Cole® Medical Billing & Coding Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
- The total cost for hiring Business Consultant – $2,500
- The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
- The total cost for long – term leasing of a standard office facility – $150,000
- Other start-up expenses including stationery ($500) and phone and utility deposits – ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The total cost for the purchase and installation of CCTVs – $10,000
- The cost for the purchase of office furniture and gadgets (Computers, Software Apps, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The total cost of launching a Website – $600
- The total cost for our opening party – $7,000
- Miscellaneous – $10,000
We would need an estimate of $200,000 to successfully set up our medical billing and coding company in Saint Paul – Minnesota.
Generating Startup Capital for Jeff Cole® Medical Billing & Coding Company, Inc.
Jeff Cole® Medical Billing & Coding Company, Inc. is a private registered business that is solely owned and financed by Mr. Jeff Cole and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start up capital to 3 major sources.
- Generate part of the start – up capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $50,000 (Personal savings $35,000 and soft loan from family members $15,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Jeff Cole® Medical Billing & Coding Company, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to offer our services a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while. Jeff Cole® Medical Billing & Coding Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.
Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of office facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed software apps, tools, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with key stake holders in the healthcare industry and medical insurance industry: In Progress