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How to Start a Medical Claims Processing Business


Medical claims processing business is an important part of the health industry. Insurance companies, HMOs and other health organizations make it difficult for doctors to get paid for services rendered, and time spent trying to collect debts is less time doctors spend caring for patients. Medical claims processing business allow doctors to receive payment without having the extra burden. So how does a WAHM take advantage of this? Let this guide help you start a medical claims processing business.

What Do You Need to Get Started?

Startup costs for a medical claims processing business are surprisingly low. Working from home, there's no worry about leasing office space. There's virtually no inventory. Most expenses are office equipment and software, and many of these you may already have access to or can buy used to save money.

Here's a list of what you'll need to get started:

  • Computer system with printer and internet connection
  • Fax machine
  • Software or business opportunity
  • Clearinghouse
  • Reference material
  • HCFA 1500 forms
  • Telephone
  • Voice mail or answering machine
  • Office supplies
  • Postage

Reference materials should include coding books such as ICD-10, CPT, HCPCS Expert 2000 and CDT-3 (if billing for dentists).

Special care should be taken when selecting your software and clearinghouse. These will be your most useful tools and can be the most expensive.

Software and Business Opportunities

Software bundles cost anywhere from $500 to $10,000. Different packages come with different features--ranging from bare-bones minimum to complete business opportunities that will hold your hand and provide training. Research fully before making a decision. Pay only for features and services you want.

Look into the company that provides your software or business opportunity. Get references and check with them. Ask the following questions:

  • How long has the company been in business?
  • How large is their customer base?
  • Is the software easy to use?
  • How helpful is their technical support?
  • Is the company known for scams?


The clearinghouse is the company that will receive your claims, checks them for errors, and transmits them for you. Choose this company carefully, as you will be working with them for awhile. Costs range from $0 to $300 startup fees and $0 to $50 per doctor signup fees.

How Do You Find Work?

Having a good network of contacts is the best method of finding work in this field. Start by talking to people you know. Your friends and family will all have doctors, and they may have a good idea if any of them may be in need of your services. If nothing else, they may talk to their doctors about it, or mention you in passing to some of their friends, thereby spreading the words of your business. It may bring people to you!

Secondly, go to every doctor you know. Your primary physician, your dentist or your children's pediatrician all may be able to refer you to other doctors or may be able to refer doctors to you.

Finally, other professionals such as lawyers, accountants, real estate agents and insurance agents often have contacts in the medical field. If you are customers with them, these professionals have it in their best interest to keep you happy. They might be more than happy to pass your name along.

How Do I Get Paid?

Medical claim processors generally use one of three methods to bill their client:

  • Percentage of amount collected - This method is used most by medical claims processors who provide full-practice management or who process both patient billing and claims billing. Note that you claim a percentage of the total amount collected not the total amount billed.
  • Per claim basis - This method works best for medical claims processors who just do claims with no other practice management tasks.
  • Hourly rate - This method is used mostly when the billing of a client is so low that neither percentage nor per-claim methods are profitable.

With high demand and low costs, a medical claims processing business can be a profitable endeavor.

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