Dividing billing expenses

September 1, 2006

We have 10 primary-care physicians and five full-time billers. The billers do everything from entering charges to sending delinquent accounts to collection agencies. We are trying to determine a fair way to allocate our physicians’ expenses. Currently, we base it on each physician’s percentage of total reimbursements. Obviously, the higher earners do not appreciate this, but the lower earners do. Do you know of any better or more common model for dealing with this expense allocation concern?

Question: We have 10 primary-care physicians and five full-time billers. The billers do everything from entering charges to sending delinquent accounts to collection agencies. We are trying to determine a fair way to allocate our physicians' expenses. Currently, we base it on each physician's percentage of total reimbursements. Obviously, the higher earners do not appreciate this, but the lower earners do. Do you know of any better or more common model for dealing with this expense allocation concern?

Answer: Coding and billing consultant and educator Bill Dacey, MHA, CPC, points out that billing costs are generated on a per-line basis, that is, the number of codes or charges each biller deals with. For optimum accuracy, you could capture a line item count off the CMS-1500 per provider -- possibly excluding labs -- and divvy up costs based on the percentage of the total number of lines each provider bills. That may be more onerous than practical. It's not necessary to be accurate, but you do need to find a method everyone can live with.