What’s the True Cost of Medical Billing Software?

Today’s uncertain economy is presenting healthcare practices across the US with a whole host of challenges. These include inactive patients, increased competition, the pressures from managed care and declining reimbursements, each of which can negatively affect your bottom line. Because of this, you need to find ways to cut costs and improve efficiency, and web-based medical billing software allows you to do both. Web-based medical billing software is cost-effective and offers many benefits over traditional billing methods that require an expensive computer server and software program.

What you can expect to pay

The most basic computer server for a small healthcare practice can cost well into the thousands, and so can medical billing software. Adding a server and medical billing software to your practice is a big commitment, and it involves much more than you might realize. Here is a sample cost breakdown for a dedicated server and billing software for two computer workstations, which is the typical setup for a small practice:

* Computer server — $ 3,500 to $ 5,000

* Ethernet switch/wires — $ 250

* Backup hard drive — $ 500 to $ 750

* Software training — $ 1,000 to $ 3,000

* Software license — $ 1,500 to $ 3,500 per user

* Software upgrade — $ 1,500 to $ 3,500 annually

* Information technology (IT) support — $ 200/hour

More costs that you will incur

Once your computer server and medical billing software are installed, be prepared to pay for a whole host of other things, such as medical clearinghouse service fees, printed forms and envelopes, postage, phone calls to insurance companies and patients, and insurance coding and billing manuals. How much, you ask? Let’s assume your staff includes two medical billing specialists who are making $ 8,000 per month combined. These additional expenses can add anywhere from 5% to 10% to your labor cost each month ($ 400 to $ 800).

With web-based billing, no expensive servers or software are needed-ever

With web-based medical billing software, you won’t need to buy expensive computer servers, which require ongoing backups and maintenance, or costly medical billing software programs that need annual upgrades. All you need is a computer with Internet access and your staff is ready to start billing. Web-based medical billing software is affordable for healthcare practices of all sizes, and in every specialty. Some software companies, like Kareo, offer a variety of plans with low monthly subscription fees and don’t require any up-front costs or contracts. Kareo’s plans start at just $ 69 a month, not including electronic claim fees, and there is no extra cost for setup and staff training.

Easy to use

Your employees will enjoy working with web-based medical billing software because it makes their lives easier. They don’t need to worry about doing anything technical; they just do their jobs with greater efficiency and accuracy online. Web-based billing software programs look just like a webpage and were designed for easy navigation and data entry. Depending on the needs of your office and your staff, you might want to consider web-based billing software that can be used anytime, anywhere with a secure Internet connection. This is the perfect option if you have a staff member who needs to work from home, or if you want to check on the status of your practice when you’re not in the office.


Web-based medical billing software is hassle-free. You won’t have to buy and install software, and you won’t have to deal with manual software upgrades each year. When web-based software companies make updates or add new features to their software, they take effect immediately. While most web-based software companies upgrade their software on an annual basis, others do so more frequently to provide their customers with the very latest industry changes. Kareo, for example, upgrades their software every eight weeks. This is a great benefit because your software will improve every two months without you having to do anything–or pay anything additional. With Kareo, there is no charge for updates. What’s more, web-based billing software systems offer automatic backups, which means your employees won’t have to spend their valuable time backing up your important patient data each day.

Say “goodbye” to common billing errors

Another key benefit of web-based medical billing software is the elimination of human error through automated methods. Web-based software catches mistakes in real-time so they can be corrected immediately. This greatly reduces the chances of claims being rejected and speeds up the payment cycle. Of course, this also saves your office the time and expense of re-submitting claims. The efficiency and accuracy of web-based billing software can help prevent these problems from occurring:

* Incorrect codes

* Large percentage of denied claims

* Slow turnaround of claim payments

* Claims that are submitted with errors or inconsistencies

* “No response” claims

* Underpaid claims

To put this into perspective, let’s say you are a solo practitioner who files 20 claims per day at an average of $ 200 per claim. That’s 5,000 claims totaling $ 1,000,000 per year. If your office currently collects 70% of what is billed, that’s $ 700,000 in reimbursements. Not bad, right? Well, now imagine your staff working smarter — and faster — with web-based medical billing software that simplifies the entire process and addresses the errors mentioned above. A mere 10% increase in collections (to 80%) would add $ 100,000 to your bottom line. And it only goes up from there.

Save money. Make money

As you can see, the true cost of medical billing software with a dedicated server is quite high compared to today’s advanced web-based medical billing software. Plus, web-based billing software can make you and your office staff more productive and increase the speed with which your providers pay you, and we all know that fast, accurate collections are vital to the success of any practice.

Trusted by thousands of doctors, Kareo is the web-based practice management and medical billing software with integrated electronic claims processing that’s the most user-friendly, easy-to-buy, and easy-to-set-up solution on the market (

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